As filed with the Securities and Exchange Commission on February 4, 1999     
 
                                                     Registration No. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                --------------
                                   FORM S-4
                            REGISTRATION STATEMENT
                                     Under
                          The Securities Act of 1933
                                --------------
                                  NEWELL CO.
            (Exact name of registrant as specified in its charter)
                                --------------
         Delaware                    3469                    36-3514169
     (State or Other          (Primary Standard           (I.R.S. Employer
     Jurisdiction of              Industrial            Identification No.)
     Incorporation or        Classification Code
      Organization)                Number)
                                --------------
                                  Newell Co.
                           29 East Stephenson Street
                           Freeport, Illinois 61032
                                1-815-235-4171
              (Address, including zip code, and telephone number,
       including area code, of registrant's principal executive offices)
                                --------------
                              Dale L. Matschullat
                        Vice President--General Counsel
                         6833 Stalter Drive, Suite 101
                           Rockford, Illinois 61108
                                1-815-381-8110
           (Name, address, including zip code, and telephone number,
                  including area code, of agent for service)
                                --------------
                                  Copies to:
  Frederick L. Hartmann        James A. Morgan             Lyle G. Ganske
     Andrea L. Horne        Senior Vice President,        
  Schiff Hardin & Waite            General             Patrick J. Leddy     
                                                        Jones, Day, Reavis &
     6600 Sears Tower       Counsel and Secretary              Pogue
 Chicago, Illinois 60606   Rubbermaid Incorporated          North Point
      1-312-258-5500           1147 Akron Road          901 Lakeside Avenue
                             Wooster, Ohio 44691       Cleveland, Ohio 44114
                                1-330-264-6464             1-216-586-7642
                                --------------
 
  Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after the effective date of this Registration
Statement.
  If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
  If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
  If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
                        CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

   

                                                           Proposed
                                            Proposed       Maximum
 Title of Each Class Of       Amount        Maximum       Aggregate      Amount of
    Securities to be          to be      Offering Price    Offering     Registration
       Registered         Registered (1) Per Share (2)    Price (2)       Fee (3)
- ------------------------------------------------------------------------------------
                                                           
Common Stock, par value    121,721,850
 $1.00 per share.......       shares         $39.13     $4,762,600,925   $1,324,004
- ------------------------------------------------------------------------------------
Preferred Stock Purchase   121,721,850
 Rights................       rights          (4)            (4)            (4)

    
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Represents the maximum number of shares of common stock and related
    preferred stock purchase rights of Newell Co., the registrant, estimated
    to be issuable upon (a) the consummation of the merger of a wholly owned
    subsidiary of Newell with and into Rubbermaid Incorporated based on an
    exchange ratio of 0.7883 of a share of Newell common stock to be exchanged
    for each outstanding share of Rubbermaid common stock, and (b) the
    exercise of options to purchase Newell common stock to be issued upon the
    conversion of all options to purchase Rubbermaid common stock that may be
    outstanding when the merger is effective.
   
(2) Estimated solely for the purpose of calculating the registration fee
    pursuant to Rule 457(f)(1) under the Securities Act of 1933 based on the
    product of (a) $30.84375, the average of the high and low sales prices of
    Rubbermaid common stock on the New York Stock Exchange Composite Tape on
    January 28, 1999 and (b) 154,410,567, the number of shares of Rubbermaid
    common stock outstanding at the close of business on February 3, 1999,
    assuming the exercise of all options to purchase Rubbermaid common stock
    that may be outstanding when the merger is effective. The proposed maximum
    offering price per share is based upon the proposed maximum aggregate
    offering price divided by the amount of shares to be registered.     
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------


 
(3) The registration fee for the securities registered hereby has been
    calculated pursuant to Section 6(b) of the Securities Act of 1933 as the
    product of .000278 and the proposed maximum aggregate offering price. A
    fee of $1,020,340 was paid on November 16, 1998 pursuant to Rule 14a-6 and
    Rule 0-11 promulgated under the Securities Exchange Act of 1934 in respect
    of the merger upon filing by Newell and Rubbermaid of a preliminary joint
    proxy statement/prospectus relating thereto. Pursuant to Rule 457(b)
    promulgated under the Securities Act of 1933 and Section 14(g)(1)(B) of
    the Securities Exchange Act of 1934 and Rule 0-11 promulgated thereunder,
    the amount of such previously paid fee has been credited against the
    registration fee payable in connection with this filing.
(4) No additional consideration will be paid for, and no registration fee is
    required in connection with the registration of, the preferred stock
    purchase rights.
                                --------------
  The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this registration
statement shall become effective on such date as the Securities and Exchange
Commission, acting pursuant to said Section 8(a), may determine.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------


 
       
[LOGO OF NEWELL]                                            [LOGO OF RUBBERMAID]
 
                  MERGER PROPOSED--YOUR VOTE IS VERY IMPORTANT
   
  The Boards of Directors of Newell Co. and Rubbermaid Incorporated have
approved a merger agreement that would result in Rubbermaid becoming owned by
Newell. If we complete the merger, Rubbermaid stockholders will receive 0.7883
of a share of Newell common stock for each share of Rubbermaid common stock
that they own. Newell stockholders will continue to own their existing shares
after the merger. We estimate that Newell will issue approximately 118 million
shares of its common stock to Rubbermaid stockholders in the merger. Those
shares will represent approximately 40% of the common stock of Newell after the
merger.     
 
  The merger will bring together Newell's strengths in operations, customer
service, and in acquiring and integrating businesses with Rubbermaid's well-
known consumer brands and new product development focus. We believe that this
combination will enable us to provide our customers with better service and a
broader range of products. After the merger, Newell will change its name to
"Newell Rubbermaid Inc."
 
  We cannot complete this merger unless Newell stockholders approve the
issuance of Newell shares in the merger and Rubbermaid stockholders approve the
merger agreement. We have each scheduled special meetings for our stockholders
to vote on these important matters.
   
  Your vote is very important. Please take the time to vote by completing the
enclosed proxy card and returning it in the return envelope provided, even if
you plan to attend your stockholders' meeting. You should note that if you
sign, date and mail your proxy card without indicating how you wish to vote,
your proxy will be counted as a vote in favor of the proposal(s) submitted at
your meeting. Newell stockholders may also vote their shares by telephone or
over the Internet by following the instructions on the proxy card. If you hold
your shares in the name of a bank or broker, you should follow the instructions
on the form you receive from your bank or broker.     
 
  The dates, times and places of the meetings are:
 
        For Newell Stockholders:              For Rubbermaid Stockholders:
                                         
 March 11, 1999, 10:00 a.m., local time  March 11, 1999, 11:00 a.m., local time
    
       The Northern Trust Company                   BankBoston N.A.
        50 South LaSalle Street                    100 Federal Street
        Chicago, Illinois 60675               Boston, Massachusetts 02110
 
  This document provides you with detailed information about the meetings and
the proposed merger. We encourage you to read this entire document carefully.
In particular, you should read the "Risk Factors" section beginning on page 14
for a description of certain risks that you should consider in evaluating the
merger. You may also obtain information about our companies from publicly
available documents that we have filed with the Securities and Exchange
Commission.
 
 
  /s/ John J. McDonough                       /s/ Wolfgang R. Schmitt

  John J. McDonough                           Wolfgang R. Schmitt
  Vice Chairman and Chief Executive Officer   Chairman and Chief Executive
  Newell Co.                                   Officer
                                              Rubbermaid Incorporated
 
 Neither the Securities and Exchange Commission nor any state securities
 commission has approved the Newell common stock to be issued under this
 joint proxy statement/prospectus or determined if this joint proxy
 statement/prospectus is accurate or adequate. Any representation to the
 contrary is a criminal offense.
   
  The date of this joint proxy statement/prospectus is February 5, 1999, and
       it is first being mailed to stockholders on February 8, 1999.     


 
                 [LOGO OF NEWELL(R)] & [LOGO OF RUBBERMAID(R)]

                            A POWERFUL COMBINATION

[LOGO OF ACE(R)]                                     [LOGO OF ANCHOR HOCKING(R)]

[LOGO OF BERNZOMATIC(R)]       [LOGO OF BURNES(R)]       [LOGO OF AIRBAKE
                                                      INSULATED BAKEWARE(R)] 

[LOGO OF AMEROCK(R)]         [LOGO OF ANCHOR                 [LOGO OF BEROL(R)]
                        HOCKING(R) SPECIALTY GLASS(TM)]

[LOGO OF BULLDOG HARDWARE(R)]    [LOGO OF ACRIMO(TM)]       [LOGO OF EZ PAINTR
                                                            QUALITY PAINTING
                                                               MADE EZ(R)] 

[LOGO OF CURVER BY RUBBERMAID(R)]  [LOGO OF CALPHALON(R)]  [LOGO OF CENTURY
                                                       DEDICATED TO QUALITY(R)] 

[LOGO OF DEL MAR(R)]     [LOGO OF EF EBERHARD FABER(R)]  [LOGO OF ELDON(R)]   

[LOGO OF GARDINIA(TM)] [LOGO OF GOODY(R)] [LOGO OF GRACO(R)] [LOGO OF HOLSON(R)]

[LOGO OF INTERCRAFT     [LOGO OF KIRSCH(R)]     [LOGO OF LITTLE TIKES(R)]  
THE FRAME PEOPLE(R)] 

[LOGO OF LR LEE ROWAN(R)]      [LOGO OF MIRRO(R)]       [LOGO OF LEVOLOR(R)]

[LOGO OF LOUVERDRAPE(R)]      [LOGO OF NEWELL(R)]       [LOGO OF PYREX(R)](1)   

[LOGO OF PANEX(TM)]         [LOGO OF ROGERS(R)]          [LOGO OF ROTRING(R)]

[LOGO OF SHARPIE(R)]         [LOGO OF SWISH(TM)]          [LOGO OF ROLODEX(R)]  

[LOGO OF SANFORD(R)]       [LOGO OF SYSTEM WORKS         [LOGO OF WILHOLD(R)]
                       WALL TO WALL ORGANIZATION (R)] 

[LOGO OF WEAREVER(R) AIR(TM)]   [LOGO OF UNI-BALL(R)](2)


(1) Marketed under exclusive license in Europe, the Middle East and Africa only
(2) Marketed under exclusive license from Mitsubishi Pencil Co. Ltd. and its 
    subsidiaries



 
                                 [NEWELL LOGO]
                                ---------------
 
                   NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
                           
                        To Be Held March 11, 1999     
 
                                ---------------
 
To the Stockholders of NEWELL CO.:
   
  A special meeting of the stockholders of Newell Co. will be held at The
Northern Trust Company, 50 South LaSalle Street, Chicago, Illinois on
Thursday, March 11, 1999 at 10:00 a.m., local time, for the following
purposes:     
 
  1. To consider and vote on a proposal to approve the issuance of shares of
     Newell common stock in connection with Newell's acquisition of
     Rubbermaid Incorporated.
 
  2. To consider and vote on a proposal to amend Newell's certificate of
     incorporation to change Newell's name at the time of the merger to
     "Newell Rubbermaid Inc."
 
  3. To act on any other matters that may properly come before the special
     meeting and any adjournment or postponement of the special meeting.
 
  The Board of Directors of Newell has unanimously approved the merger and the
proposals described above, and unanimously recommends that you vote FOR these
proposals at the special meeting.
 
  Stockholders of record at the close of business on February 8, 1999 are
entitled to notice of the special meeting and to vote at the special meeting
or any adjournment or postponement of the special meeting.
 
  You are cordially invited to attend the special meeting. Whether or not you
plan to attend, please act promptly to vote your shares with respect to the
proposals described above. You may vote your shares by marking, signing and
dating the enclosed proxy and returning it in the return envelope provided,
which requires no postage if mailed in the United States. You may also vote
your shares by telephone or through the Internet by following the instructions
set forth on the enclosed proxy card. If you attend the special meeting, you
may vote your shares in person, even if you have previously submitted a proxy
in writing, by telephone or through the Internet.
 
                                       By order of the Board of Directors,
                                       
                                       /s/ RICHARD H. WOLFF
 
                                       Richard H. Wolff
                                       Corporate Secretary
   
February 5, 1999     


 
                               [RUBBERMAID LOGO]
                               ----------------
 
                   NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
                            
                         To Be Held March 11, 1999     
 
                               ----------------
 
To the Stockholders of RUBBERMAID INCORPORATED:
   
  A special meeting of the stockholders of Rubbermaid Incorporated will be held
at BankBoston N.A., 100 Federal Street, Boston, Massachusetts on Thursday,
March 11, 1999 at 11:00 a.m., local time, for the following purposes:     
 
  1. To consider and vote on a proposal to adopt the Agreement and Plan of
     Merger, dated October 20, 1998, between Rubbermaid, Newell Co. and a
     subsidiary of Newell, under which Newell's subsidiary will merge into
     Rubbermaid, with Rubbermaid surviving as a wholly owned subsidiary of
     Newell. A copy of the merger agreement is attached to the joint proxy
     statement/prospectus as Annex A.
 
  2. To act on any other matters that may properly come before the special
     meeting and any adjournment or postponement of the special meeting.
 
  The Board of Directors of Rubbermaid unanimously recommends that Rubbermaid
stockholders vote FOR adoption of the merger agreement.
 
  Stockholders of record at the close of business on February 8, 1999 are
entitled to notice of and to vote at the special meeting and any adjournment or
postponement of the special meeting.
 
  Adoption of the merger agreement is a condition of the merger. We will not
complete the merger unless the merger agreement is adopted by Rubbermaid
stockholders.
 
  All stockholders are cordially invited to attend the special meeting. It is
important that your shares be represented at the special meeting, whether or
not you plan to attend in person. Accordingly, please complete, sign, date and
return the enclosed proxy card in the enclosed envelope, which requires no
postage if mailed in the United States. You may revoke your proxy in the manner
described in the accompanying joint proxy statement/prospectus at any time
before the proxy has been voted at the special meeting.
 
                                          By order of the Board of Directors,
 
                                          /s/ JAMES A. MORGAN
 
                                          James A. Morgan
                                          Corporate Secretary
   
February 5, 1999     


 
  To find any one of the principal sections identified
below, simply bend the document slightly to expose the
black tabs and open the document to the tab which
corresponds to the title of the section you wish to read.
 
                                            Table of Contents
 
                       Questions and Answers about the Merger
 
                                                      Summary
 
                                                 Risk Factors
 
                                                   The Merger
 
                  Material Provisions of the Merger Agreement
 
                                         The Special Meetings
 
                                        Financial Information
 
                              Information About Our Companies
 
                             Comparison of Stockholder Rights
 
                                            Other Information
 
                                                      Annexes


 
                               TABLE OF CONTENTS
 



                                                                           Page
                                                                           ----
                                                                        
QUESTIONS AND ANSWERS ABOUT THE MERGER....................................   1
WHO CAN HELP ANSWER YOUR QUESTIONS........................................   1
SUMMARY...................................................................   3
  The Companies...........................................................   3
  Our Reasons for the Merger..............................................   4
  Our Recommendations to Stockholders.....................................   4
  The Special Meetings....................................................   4
    Record Date; Voting Power.............................................   4
    Votes Required........................................................   4
  What Stockholders Will Receive in the Merger............................   5
  Tax Consequences of the Merger..........................................   5
  Dividends...............................................................   5
  Appraisal and Dissenters' Rights........................................   5
  Opinions of Financial Advisors..........................................   6
  Material Provisions of the Merger Agreement.............................   6
    Conditions to the Merger..............................................   6
    Termination of the Merger Agreement...................................   6
    Termination Fees......................................................   7
    Accounting Treatment..................................................   7
    Regulatory Matters....................................................   7
    Listing of Newell Common Stock........................................   7
    Book-entry Ownership..................................................   7
  Directors and Executive Officers of Newell after the Merger.............   8
  Interests of Certain Persons in the Merger..............................   8
  Comparative Market Prices...............................................   9
  Recent Newell Financial Results.........................................   9
  Selected Pro Forma and Historical Financial Data........................  10
  Newell Summary Historical Financial Data................................  12
  Rubbermaid Summary Historical Financial Data............................  13
RISK FACTORS..............................................................  14
THE MERGER................................................................  17
  General.................................................................  17
  Background of the Merger................................................  17
  Recommendation of the Newell Board; Newell's Reasons for the Merger.....  21
  Recommendation of the Rubbermaid Board; Rubbermaid's Reasons for the
   Merger.................................................................  25
  Accounting Treatment....................................................  26
  Material Federal Income Tax Consequences................................  26
  Regulatory Matters......................................................  28
  Appraisal and Dissenters' Rights........................................  29
  Federal Securities Laws Consequences; Stock Transfer Restriction
   Agreements.............................................................  30
OPINIONS OF FINANCIAL ADVISORS............................................  32
  Opinion of Financial Advisor to Newell..................................  32
  Opinion of Financial Advisor to Rubbermaid..............................  40
MATERIAL PROVISIONS OF THE MERGER AGREEMENT...............................  47
  General.................................................................  47
  Closing; Effective Time.................................................  47


 
                                      (i)
 
                                                               TABLE OF CONTENTS


 



                                                                           Page
                                                                           ----
                                                                        
  Directors and Officers of Rubbermaid after the Merger...................  47
  Consideration to be Received in the Merger..............................  47
  Conversion of Shares; Procedures for Surrender of Certificates; Book-
   Entry Registration; Fractional Shares..................................  48
  Representations and Warranties..........................................  49
  Covenants...............................................................  50
  Additional Agreements...................................................  52
  Conditions to the Consummation of the Merger............................  55
  Termination, Amendment and Waiver.......................................  57
THE SPECIAL MEETINGS......................................................  59
  Date, Times and Places..................................................  59
  Matters to be Considered at the Special Meetings........................  59
  Record Date; Stock Entitled to Vote; Quorum.............................  59
  Votes Required..........................................................  59
  Share Ownership of Management...........................................  60
  Voting of Proxies.......................................................  60
FINANCIAL INFORMATION.....................................................  63
INFORMATION ABOUT OUR COMPANIES...........................................  72
  Newell..................................................................  72
  Rubbermaid..............................................................  73
COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION...............  74
DIRECTORS AND EXECUTIVE OFFICERS OF NEWELL AFTER THE MERGER...............  75
  Directors...............................................................  75
  Executive Officers......................................................  78
INTERESTS OF CERTAIN PERSONS IN THE MERGER................................  79
COMPARISON OF STOCKHOLDER RIGHTS..........................................  82
  Cumulative Voting.......................................................  82
  Appraisal and Dissenters' Rights........................................  82
  Stockholder Action by Written Consent...................................  83
  Control Share Acquisitions..............................................  83
  Constituencies Provisions...............................................  83
  Amendment of Charter Documents..........................................  84
  Business Combinations with Certain Persons..............................  84
  Director Liability And Indemnification..................................  85
  Removal of Directors....................................................  87
  Special Meetings of Stockholders........................................  87
  Certain Business Combinations...........................................  87
  Authorized Capital......................................................  88
  Number of Directors.....................................................  88
  Newly Created Directorships and Vacancies...............................  89
  Committees of the Board of Directors....................................  89
  Share Purchase Rights Plans.............................................  89
  Dividends...............................................................  90


 
                                      (ii)
 
TABLE OF CONTENTS


 



                                                                            Page
                                                                            ----
                                                                         
WHERE YOU CAN FIND MORE INFORMATION........................................  91
EXPERTS....................................................................  93
LEGAL MATTERS..............................................................  93
INDEPENDENT PUBLIC ACCOUNTANTS.............................................  94
FUTURE STOCKHOLDER PROPOSALS...............................................  94
FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE............................  94
LIST OF ANNEXES




         
    Annex A Agreement and Plan of Merger
            Form of Certificate of Amendment to Newell's Restated Certificate
    Annex B of Incorporation
    Annex C Opinion of Robert W. Baird & Co. Incorporated
    Annex D Opinion of Goldman, Sachs & Co.
    Annex E Section 1701.85 of the Ohio Revised Code


 
  This document incorporates important business and financial information about
our companies that is not included in or delivered with this document. Newell
will provide you with copies of this information relating to Newell, without
charge, upon written or oral request to:
 
           Newell Co.
           6833 Stalter Drive, Suite 101
           Rockford, Illinois 61108
           Attention: Office of Investor Relations
           Toll-free telephone number: 1-800-424-1941
 
Rubbermaid will provide you with copies of this information relating to
Rubbermaid, without charge, upon written or oral request to:
 
           Rubbermaid Incorporated
           1147 Akron Road
           Wooster, Ohio 44691
           Attention: Office of Investor Relations
           Telephone number: 1-330-264-6464 ext. 5342
   
In order to receive timely delivery of the documents in advance of our special
stockholders' meetings, you should make your request no later than February 26,
1999.     
 
                                     (iii)
 
                                                               TABLE OF CONTENTS


 
                     QUESTIONS AND ANSWERS ABOUT THE MERGER
 
Q1: What should I do now?
 
A1: You should vote your shares by completing, signing and dating your proxy
    card and mailing it to us in the enclosed return envelope. You may also
    vote by attending your stockholders' meeting and voting in person. Newell
    stockholders may also vote by calling toll-free: 1-800-OK2-VOTE (1-800-652-
    8683), or over the Internet by signing on to the web site at
    "http://www.vote-by-net.com".
 
  If you are a Rubbermaid stockholder and you do not vote your shares, the
  effect will be the same as a vote by you against the merger agreement.
 
Q2: What do I do if I want to change my vote?
 
A2: You may change your vote by:
 
  . sending a written notice to the Corporate Secretary of your company prior
    to your stockholders' meeting;
 
  . signing another proxy card and returning it by mail prior to your
    stockholders' meeting; or
 
  . attending your stockholders' meeting and voting in person.
 
  Newell stockholders may also change their votes by telephone by calling the
  number listed in Answer 1 or over the Internet by signing on to the web site
  listed in Answer 1.
 
Q3: As a Rubbermaid stockholder, should I send in my stock certificates now?
 
A3: No. After the merger is completed, we will send you written instructions
    regarding the surrender of your stock certificates.
 
Q4: When do you expect the merger to be completed?
 
A4: We are working to complete the merger as soon as possible. We hope to
    complete the merger no later than the 15th day following the special
    stockholder meetings.
                       WHO CAN HELP ANSWER YOUR QUESTIONS
 
     If you have additional questions about the merger you should contact:
 
                            Newell Co. Stockholders
                                   Newell Co.
                         6833 Stalter Drive, Suite 101
                            Rockford, Illinois 61108
                    Attention: Office of Investor Relations
                          Phone Number: 1-800-424-1941
 
                      Rubbermaid Incorporated Stockholders
                            Rubbermaid Incorporated
                                1147 Akron Road
                              Wooster, Ohio 44691
                    Attention: Office of Investor Relations
                     Phone Number: 1-330-264-6464 ext. 5342
 
 
 
 If you would like additional copies of this joint proxy statement/prospectus,
         or if you have questions about the merger, you should contact:
 
                               Morrow & Co., Inc.
                           445 Park Avenue, 5th Floor
                            New York, New York 10022
                          Phone Number: 1-800-566-9061
 
              Banks & Brokerage Firms please call: 1-800-662-5200
 
                                       1
 
                                          QUESTIONS AND ANSWERS ABOUT THE MERGER


 
 
                                       2


 
                                    SUMMARY
 
  This summary highlights selected information from this joint proxy
statement/prospectus and does not contain all of the information that is
important to you. To understand the merger fully and for a more complete
description of the legal terms of the merger, you should read carefully this
entire document and the documents we have referred you to. See "Where You Can
Find More Information" (page 91). We have included page references
parenthetically to direct you to a more complete description of each topic
presented in this Summary.
The Companies (page 72)
 
Newell Co.
29 East Stephenson Street
Freeport, Illinois 61032
1-815-235-4171
 
  Newell, with 1997 sales of $3.3 billion, is an international manufacturer and
marketer of everyday consumer products. We sell these products to a variety of
large retailers and wholesalers under numerous well-known brand names,
including:
 



  Product Categories            Principal Brands
  ------------------            ----------------
                      
Hardware and Home
 Furnishings
 . Window Treatments      Newell(R), Kirsch(R),Levolor(R)
 . Picture Frames         Intercraft(R),
                         Burnes of Boston(R)
 . Hardware and Tools     Amerock(R), EZPaintr(R),
                         BernzOmatic(R), Bulldog(R)
 . Home Storage Products  Lee Rowan(R)
Office Products
 . Writing Instruments    Sanford(R), Berol(R)
 . Office Storage and     Rolodex(R), Eldon(R)
  Organization Products
Housewares
 . Aluminum Cookware      Mirro(R), Calphalon(R)
  and Bakeware
 . Glassware              Anchor Hocking(R)
 . Hair Accessories       Goody(R)


 
  Newell's major customers include:
 
 . Discount stores and warehouse clubs;
 
 . Home centers and hardware stores;
 
 . Office superstores and contract stationers;
 
 . Department and specialty stores; and
 
 . Drug and grocery stores.
 
  Newell has approximately 32,000 employees.
 
Rubbermaid Incorporated
1147 Akron Road
Wooster, Ohio 44691
1-330-264-6464
 
  Rubbermaid, with 1997 sales of $2.4 billion, is also an international
manufacturer and marketer of consumer products. Like Newell, Rubbermaid sells
its products to a variety of retailers and wholesalers under numerous well-
known brand names, including:
 



               Product Categories                     Principal Brands
               ------------------                     ----------------
                                               
Home Products                                     Rubbermaid(R), Curver(R)
 (Housewares, Hardware, Storage & Organization,
 Leisure and Recreational Products)
Juvenile Products                                 Little Tikes(R)
 (Children's Toys and Recreational Products)
Infant Products                                   Graco(R), Century(R)
 (Car Seats, Strollers and Portable Playpens)
Commercial Products                               Rubbermaid(R),
 (Commercial, Industrial & Sanitary Maintenance,  Little Tikes(R)
 Playground Equipment, Home Health Care and Food
 Service Products)


 
  Rubbermaid's major customers include:
 
 . Discount stores and warehouse clubs;
 
 . Toy stores;
 
 . Home centers and hardware stores;
 
 . Drug and grocery stores;
 
 . Catalog showrooms; and
 
 . Distributors serving institutional markets.
 
  Rubbermaid has approximately 12,000 employees.
 
                                       3
 
                                                                         SUMMARY


 
 
Our Reasons for the Merger (page 21)
 
  We believe the merger will join Rubbermaid's well-known consumer brands and
new product development focus with Newell's numerous strengths, including:
 
 . outstanding customer service;
 
 . an efficient corporate structure that combines independent operating
  divisions with centralized administrative functions; and
 
 . a long history of successfully acquiring and integrating compatible
  businesses.
 
  As a result of this combination, we expect the merger to provide
opportunities for significant operating profit improvements through the
integration of Rubbermaid into Newell.
 
  You should recognize, however, that we may not achieve these operating profit
improvements because of the risks and uncertainties discussed in the section
"Risk Factors" on pages 14-16 and the section "Forward-Looking Statements May
Prove Inaccurate" on pages 94-95.
 
Our Recommendations to Stockholders (page 21)
 
  Newell Stockholders. The Newell Board believes that the merger is fair to and
in the best interests of Newell and its stockholders and unanimously recommends
that you vote FOR the proposal to approve the issuance of shares of Newell
common stock in connection with the merger and FOR the proposal to change
Newell's name at the time of the merger to "Newell Rubbermaid Inc."
 
  Rubbermaid Stockholders.  Rubbermaid's Board of Directors believes that the
merger is fair to and in the best interests of Rubbermaid's stockholders and
unanimously recommends that you vote FOR the proposal to adopt the merger
agreement.
 
The Special Meetings (page 59)
   
  Newell Stockholders. We will hold the Newell special meeting on Thursday,
March 11, 1999 at 10:00 a.m., local time, at The Northern Trust Company, 50
South LaSalle Street, Chicago, Illinois. At the Newell special meeting, we will
ask you to approve:     
 
 .  the issuance of Newell common stock to Rubbermaid stockholders in connection
   with the merger; and
 
 .  an amendment to Newell's certificate of incorporation to change Newell's
   name to "Newell Rubbermaid Inc." at the time of the merger.
   
  Rubbermaid Stockholders. We will hold the Rubbermaid special meeting on
Thursday, March 11, 1999 at 11:00 a.m., local time, at BankBoston N.A., 100
Federal Street, Boston, Massachusetts. At Rubbermaid's special meeting, we will
ask you to adopt the merger agreement.     
 
Record Date; Voting Power (page 59)
 
  You may vote at your stockholders' meeting if you owned shares of common
stock at the close of business on February 8, 1999.
   
  On February 8, 1999, approximately 162,726,921 shares of Newell common stock
were outstanding. For each share of common stock that they owned on that date,
Newell stockholders will have one vote at the Newell special meeting on each of
the proposals to be presented at the meeting.     
   
  On February 8, 1999, approximately 150,357,520 shares of Rubbermaid common
stock were outstanding. For each share of Rubbermaid common stock that they
owned on that date, Rubbermaid stockholders will have one vote at the
Rubbermaid special meeting on the proposal to adopt the merger agreement.     
 
Votes Required (page 59)
 
  Newell. The approval of the proposal to issue shares of Newell common stock
requires the favorable vote of more than 50% of the
 
                                       4
 
SUMMARY


 
votes cast by Newell stockholders on the proposal, provided that the total
number of votes cast on the proposal represents at least 50% of the total
number of outstanding shares of Newell common stock. Approval of the proposal
to change Newell's name at the time of the merger to "Newell Rubbermaid Inc."
requires the favorable vote of more than 50% of the outstanding shares of
Newell common stock. Approval of the share issuance proposal is a condition to
completion of the merger. Approval of the proposal to change Newell's name is
not a condition to completion of the merger.
 
  Rubbermaid. Adoption of the merger agreement requires the favorable vote of
at least two-thirds of the outstanding shares of Rubbermaid common stock.
 
What Stockholders Will Receive in the Merger (page 47)
   
  Rubbermaid Stockholders. If we complete the merger, you will receive 0.7883
of a share of Newell common stock for each share of Rubbermaid common stock.
This exchange ratio will not change even if the market price of Newell or
Rubbermaid common stock increases or decreases between now and the date of the
merger.     
 
  Newell will not issue any fractional shares in the merger. Instead, you will
receive cash for any fractional share of Newell common stock owed to you.
 
  Newell Stockholders. You will not receive any shares in the merger. If you
currently own shares of Newell common stock, you will continue to hold those
shares after the merger.
 
Tax Consequences of the Merger (page 26)
 
  The exchange of shares by Rubbermaid stockholders will be tax-free to
Rubbermaid stockholders for federal income tax purposes, except for taxes on
cash received for a fractional share or by Rubbermaid stockholders who properly
exercise appraisal rights. The merger will have no tax consequences for Newell
stockholders.
 
  Tax matters are very complicated, and the tax consequences of the merger to
each Rubbermaid stockholder will depend on the facts of that stockholder's
situation. Each Rubbermaid stockholder is urged to consult his or her tax
advisor for a full understanding of the tax consequences of the merger to that
stockholder.
 
Dividends (page 74)
 
  Before the merger, we expect no changes in the dividend policies of Newell or
Rubbermaid. After the merger, we expect the initial dividend rate to be $0.18
per share of Newell common stock per quarter, or $0.72 per share per year.
These amounts are equal to the dividends paid by Newell in 1998. In its
decision to declare future dividends, the Newell Board will consider business
conditions and the earnings and financial conditions of Newell. Newell has been
paying dividends since 1947.
 
Appraisal and Dissenters' Rights (page 29)
 
  Rubbermaid is organized under Ohio law. Under Ohio law, any Rubbermaid
stockholder who does not vote in favor of the adoption of the merger agreement
will be entitled to dissent and receive from Rubbermaid the fair cash value of
his or her shares of Rubbermaid stock. In order to receive the fair cash value
for their stock, dissenting Rubbermaid stockholders must deliver a written
demand for a cash payment no later than ten days after Rubbermaid's special
meeting and in the manner provided under Section 1701.85 of the Ohio Revised
Code, a copy of which is attached as Annex E to this joint proxy
statement/prospectus. Any Rubbermaid stockholder who wishes to follow this
procedure should deliver a written demand to: Rubbermaid Incorporated, 1147
Akron Road, Wooster, Ohio 44691, Attention: Corporate Secretary.
 
  Newell is organized under Delaware law. Under Delaware law, Newell
stockholders do not have a right to dissent and receive the appraised value of
their shares in connection with the merger.
 
                                       5
 
                                                                         SUMMARY


 
 
Opinions of Financial Advisors (page 32)
 
  In deciding to approve the merger, our Boards considered opinions from our
respective financial advisors as to the fairness of the merger exchange ratio
of 0.7883 from a financial point of view. Newell received an opinion from
Robert W. Baird & Co. Incorporated, and Rubbermaid received an opinion from
Goldman, Sachs & Co. These opinions are attached as Annexes C and D to this
joint proxy statement/prospectus.
 
Material Provisions of the Merger Agreement (page 47)
 
  The merger agreement is attached as Annex A to this joint proxy
statement/prospectus. We encourage you to read the merger agreement because it
is the legal document that governs the merger.
 
Conditions to the Merger (page 55)
 
  We will complete the merger only if a number of conditions are satisfied or
waived, including:
 
 . Newell stockholders approve the issuance of Newell common stock in the
  merger;
 
 . Rubbermaid stockholders adopt the merger agreement;
 
 . no law or court order prohibits the merger;
 
 . our independent accountants issue letters stating that the merger will
  qualify for pooling of interests accounting treatment;
 
 . holders of no more than 9% of Rubbermaid's outstanding common stock exercise
  appraisal rights; and
 
 . attorneys for Newell and Rubbermaid issue opinions that the merger will be
  tax-free to Rubbermaid and its stockholders.
 
Termination of the Merger Agreement (page 57)
 
  Newell and Rubbermaid can jointly agree to terminate the merger agreement at
any time without completing the merger. Either company can terminate the merger
agreement if:
   
(1) we do not complete the merger by June 30, 1999;     
 
(2) the stockholders of Newell fail to approve the issuance of Newell common
    stock in the merger;
 
(3) the stockholders of Rubbermaid fail to adopt the merger agreement; or
 
(4) a governmental authority or other legal action permanently prohibits the
    merger.
 
  Rubbermaid can also terminate the merger agreement if:
 
(1) Newell's representations in the merger agreement were untrue, or Newell
    does not do the things it agreed to do in the merger agreement to complete
    the merger, and, in either case, the unresolved problem is so significant
    that it is materially adverse to Newell's business, financial condition or
    results of operations; or
 
(2) Rubbermaid receives an unsolicited proposal to acquire in a tender offer,
    merger or otherwise, more than 50% of Rubbermaid's common stock or
    substantially all of its assets, and:
 
  . Rubbermaid believes that the new proposal must be considered by it;
 
  . after considering the new proposal, Rubbermaid concludes that the new
    proposal is superior to our proposed merger;
 
  . after giving Newell an opportunity to respond to the new proposal,
    Rubbermaid approves or enters into an agreement relating to the new
    proposal; and
 
  . Rubbermaid pays Newell a termination fee of $140 million.
 
  In addition, Newell can terminate the merger agreement if:
 
(1) Rubbermaid's representations in the merger agreement were untrue, or
    Rubbermaid does not do the things it
 
                                       6
 
SUMMARY


 
  agreed to do in the merger agreement to complete the merger, and, in either
  case, the unresolved problem is so significant that it is materially adverse
  to Rubbermaid's business, financial condition or results of operations; or
 
(2) Newell receives an unsolicited proposal to acquire in a tender offer,
    merger or otherwise, more than 50% of Newell's common stock or
    substantially all of its assets, and:
 
  . Newell believes that the new proposal must be considered by it;
 
  . after considering the new proposal, Newell concludes that the new proposal
    is superior to our proposed merger;
 
  . after giving Rubbermaid an opportunity to respond to the new proposal,
    Newell approves or enters into an agreement relating to the new proposal;
    and
 
  . Newell pays Rubbermaid a termination fee of $140 million.
 
Termination Fees (page 53)
 
  Rubbermaid must also pay Newell a termination fee of $140 million if:
 
(1) Rubbermaid receives a proposal from another company to buy more than 35% of
    Rubbermaid's business or stock or to merge or combine with Rubbermaid;
   
(2) Rubbermaid or Newell terminates the merger agreement because the
    stockholders of Rubbermaid fail to adopt the merger agreement; and     
 
(3) Rubbermaid enters into an agreement with respect to, or completes, a
    takeover transaction within 18 months of the termination.
 
  In addition, Newell must pay Rubbermaid a termination fee of $140 million if:
 
(1) Newell receives a proposal from another company to buy more than 35% of
    Newell's business or stock or to merge or combine with Newell;
   
(2) Newell or Rubbermaid terminates the merger agreement because the
    stockholders of Newell fail to approve the issuance of shares in the
    merger; and     
 
(3) Newell enters into an agreement with respect to, or completes, a takeover
    transaction within 18 months of the termination.
 
Accounting Treatment (page 26)
 
  We expect that the merger will be accounted for as a pooling of interests,
which means that we will treat our companies as if they had always been
combined for accounting and financial reporting purposes.
 
Regulatory Matters (page 28)
 
  All regulatory waiting periods relating to the merger have expired, and we
have received all regulatory approvals that we need to complete the merger.
 
Listing of Newell Common Stock (page 54)
 
  It is a condition to the merger that the New York Stock Exchange approve for
listing the shares of Newell common stock to be issued to Rubbermaid
stockholders in the merger. Newell expects that the New York Stock Exchange
will grant this approval. The Newell common stock will continue to trade under
Newell's current symbol "NWL" after the merger. When the merger is completed,
we will delist the Rubbermaid common stock from the New York Stock Exchange and
deregister it under the Securities Exchange Act of 1934. Consequently,
Rubbermaid stockholders will no longer be able to trade Rubbermaid stock on any
exchange.
 
Book-entry Ownership (page 48)
 
  After the merger, Newell will issue shares of common stock to Rubbermaid
stockholders in book-entry form. After you submit your Rubbermaid stock
certificate, Newell will mail you an account statement reflecting your
ownership of the newly issued shares of Newell
 
                                       7
 
                                                                         SUMMARY


 
common stock. If you prefer, you may request to have a physical stock
certificate for your new shares issued to you after you receive your account
statement. We will include instructions for requesting a stock certificate with
your account statement. You may also request a stock certificate to be issued
to you by calling toll-free: 1-800-935-9330.
 
Directors and Executive Officers of Newell after the Merger (page 75)
 
  Upon completion of the merger, the Newell Board will increase its size from
11 members to 15 members. Nine members of the current Newell Board will
continue to serve on the Newell Board after the merger. The Newell Board will
appoint six members of the current Rubbermaid Board to serve on the Newell
Board after the merger. William P. Sovey and John J. McDonough will continue to
serve in their respective positions as Chairman and Vice Chairman of the Newell
Board after the merger, and Wolfgang R. Schmitt, currently Rubbermaid's
Chairman and Chief Executive Officer, will become a Vice Chairman of the Newell
Board after the merger.
 
  John J. McDonough, Newell's Chief Executive Officer, and Newell's other
current executive officers will continue to serve in their same capacities with
Newell following the merger.
 
Interests of Certain Persons in the Merger (page 79)
   
  In evaluating the merger, you should recognize that a number of directors and
executive officers of Rubbermaid may have interests in the merger that are
different from, or in addition to, the interests of Rubbermaid stockholders.
After the merger, six directors of Rubbermaid will become members of the Newell
Board. Several of Rubbermaid's directors and executive officers also have stock
options that automatically became exercisable as a result of the announcement
of the signing of the merger agreement. Rubbermaid may pay those directors and
officers significant additional compensation as a result of their exercise of
those options prior to the time that the options otherwise would have become
exercisable. In addition, Rubbermaid has severance agreements with several of
its executive officers and key employees. As a result of our announcement of
the merger, Rubbermaid may be obligated to pay those officers and employees
significant cash severance payments and provide them with other severance
benefits if they or Rubbermaid terminate their employment with Rubbermaid.
Newell has also agreed to provide or to continue indemnification arrangements
for existing directors and officers of Rubbermaid.     
 
                                       8
 
SUMMARY


 
                           Comparative Market Prices
   
  The following table presents trading information for Newell common stock and
Rubbermaid common stock on October 20, 1998 and February 3, 1999. October 20,
1998 was the last full trading day prior to our announcement of the signing of
the merger agreement. February 3, 1999 was the last practicable trading day for
which information was available prior to the date of this joint proxy
statement/prospectus. You should read the information presented below in
conjunction with "Comparative Per Share Market Price and Dividend Information"
on page 74.     
 

   

                                    Newell Common Stock  Rubbermaid Common Stock
                                    -------------------- ------------------------
                                     High   Low    Last   High     Low    Last
                                    ------ ------ ------ --------------- --------
                                                       
October 20, 1998................... $50.13 $48.88 $49.06  $26.31  $25.69  $25.88
February 3, 1999...................  41.63  40.38  41.00   32.00   31.00   31.56

    
 
  The market prices of shares of Newell common stock and Rubbermaid common
stock fluctuate. As a result, you should obtain current market quotations.
   
  The market value of 0.7883 shares of Newell common stock would be $38.67
based on the closing price of Newell common stock on October 20, 1998 and
$32.32 based on the closing price of Newell common stock on February 3, 1999.
    
                        Recent Newell Financial Results
   
  On January 28, 1999, Newell reported its financial results for the fourth
quarter and twelve months ended December 31, 1998. For the 1998 fourth quarter,
net sales were $1,069.7 million, compared to $941.2 million in the fourth
quarter of 1997. Newell recorded $56.5 million of pre-tax charges in the fourth
quarter of 1998, related to its 1998 Calphalon acquisition and realignment of
other operations. Net income for the 1998 fourth quarter, including the
Calphalon and realignment charges, was $59.4 million, compared to $91.2 million
in the fourth quarter of 1997. Diluted earnings per share for the 1998 fourth
quarter, calculated on the same basis, were $0.36, compared to $0.56 in the
fourth quarter of 1997.     
   
  For the full year 1998, net sales were $3,720.0 million, compared to $3,336.2
million in 1997. In the first quarter of 1998, Newell recorded a net pre-tax
gain of approximately $191.5 million on the sale of its stake in Black &
Decker. Newell also recorded one-time pre-tax charges of approximately $11.4
million in the first quarter of 1998, as well as the $56.5 million pre-tax
charges in the fourth quarter of 1998. Newell also recorded net pre-tax gains
in the third quarter of 1998 totaling $36.8 million on the divestitures of the
Stuart Hall and Newell Plastic businesses. Net income for 1998, including the
gains and charges, was $396.2 million, compared to $293.1 million in 1997.
Diluted earnings per share, calculated on the same basis, were $2.38, compared
to $1.80 in 1997.     
 
                                       9
 
                                                                         SUMMARY


 
                Selected Pro Forma and Historical Financial Data
 
  We expect that the merger will be accounted for as a pooling of interests,
which means that for accounting and financial reporting purposes, we will treat
our companies as if they had always been combined.
 
  We have presented below unaudited pro forma financial information that
reflects the pooling of interests method of accounting. We have included this
information to give you a better picture of what the combined results of
operations and financial position of Newell and Rubbermaid might have been had
the merger occurred on an earlier date. The unaudited pro forma statement of
income data combine information from the historical consolidated statements of
income of Newell and Rubbermaid giving effect to the merger as of January 1,
1995. The unaudited pro forma balance sheet data combine information from the
historical consolidated balance sheets of Newell and Rubbermaid giving effect
to the merger as if we had completed the merger on September 30, 1998.
 
  We derived the basic and diluted pro forma combined earnings per share data
from the pro forma information presented under "Financial Information." We
calculated the information in the "Rubbermaid Pro Forma Equivalent" rows by
multiplying the information in the "Newell Pro Forma Combined" row by 0.7883,
the exchange ratio of Newell common stock for each share of Rubbermaid common
stock in the merger. We based the book value per share in the "Newell
Historical," the "Rubbermaid Historical" and the "Newell Pro Forma Combined"
rows upon outstanding shares of common stock as of the dates indicated. The
numbers of outstanding shares reflected in the "Newell Pro Forma Combined" row
have been adjusted to include the shares of Newell common stock to be issued in
the merger.
 
  We are providing this information for illustrative purposes only. It does not
necessarily reflect what the results of operations or financial position of the
combined company would have been if the merger had actually occurred at the
beginning of the earliest period presented. This information also does not
necessarily indicate what the combined company's future operating results or
consolidated financial position will be. This information does not reflect (1)
the effect of any operating income improvements that we may achieve by
combining our companies, and (2) costs associated with the combining of our
companies that we cannot presently estimate.
 
  Please see "Financial Information" on pages 63 through 71 for a more detailed
explanation of this analysis.
 
                                       10
 
SUMMARY


 
                Selected Pro Forma and Historical Financial Data
                      (In millions, except per share data)
 
Statement of Income Data:



                                  Nine Months Ended
                                    September 30,     Year Ended December 31,
                                  ------------------ --------------------------
                                    1998      1997     1997     1996     1995
                                  --------  -------- -------- -------- --------
                                                        
Net sales........................ $4,515.8  $4,151.3 $5,641.4 $5,233.9 $4,838.0
Cost of products sold............  3,170.2   2,968.2  4,016.9  3,669.6  3,433.1
                                  --------  -------- -------- -------- --------
   Gross income..................  1,345.6   1,183.1  1,624.5  1,564.3  1,404.9
Selling, general and
 administrative expenses.........    684.1     609.8    819.0    800.2    708.9
Trade names and goodwill
 amortization and other..........     45.5     110.5    120.9     30.5     24.0
Restructuring costs..............     73.7      37.2     37.2      --     158.0
                                  --------  -------- -------- -------- --------
   Operating income..............    542.3     425.6    647.4    733.6    514.0
Net non-operating expenses
 (income)........................   (168.6)     69.2     94.1     60.3     41.1
                                  --------  -------- -------- -------- --------
   Income before income taxes....    710.9     356.4    553.3    673.3    472.9
Income taxes.....................    294.0     142.4    216.1    261.9    186.6
                                  --------  -------- -------- -------- --------
   Net income.................... $  416.9  $  214.0 $  337.2 $  411.4 $  286.3
                                  ========  ======== ======== ======== ========
Earnings per share:
 Basic........................... $   1.49  $   0.76 $   1.20 $   1.46 $   1.00
 Diluted.........................     1.47      0.76     1.20     1.46     1.00
Weighted average shares
 outstanding:
 Basic...........................    280.7     280.3    280.4    280.9    286.5
 Diluted.........................    291.6     281.0    281.5    281.3    286.8
Per Share Data:
 Basic:
 Newell Historical............... $   2.07  $   1.25 $   1.81 $   1.60 $   1.40
 Rubbermaid Historical...........     0.53      0.74     0.95     1.01     0.38
 Newell Pro Forma Combined.......     1.49      0.76     1.20     1.46     1.00
 Rubbermaid Pro Forma Equivalent
  (1)............................     1.17      0.60     0.95     1.15     0.79
 Diluted:
 Newell Historical............... $   2.02  $   1.24 $   1.80 $   1.60 $   1.40
 Rubbermaid Historical...........     0.53      0.74     0.95     1.01     0.38
 Newell Pro Forma Combined.......     1.47      0.76     1.20     1.46     1.00
 Rubbermaid Pro Forma Equivalent
  (1)............................     1.16      0.60     0.95     1.15     0.79
 Dividends:
 Newell Historical............... $   0.54  $   0.48 $   0.64 $   0.56 $   0.46
 Rubbermaid Historical...........     0.48      0.45     0.61     0.57     0.52
 Newell Pro Forma Combined.......     0.54      0.48     0.64     0.56     0.46
 Rubbermaid Pro Forma Equivalent
  (1)............................     0.43      0.38     0.50     0.44     0.36
 Book Value:
 Newell Historical............... $  11.60           $  10.63
 Rubbermaid Historical...........     7.05               7.02
 Newell Pro Forma Combined.......    10.01               9.43
 Rubbermaid Pro Forma Equivalent
  (1)............................     7.89               7.43
- ------
(1) The Rubbermaid Pro Forma Equivalent per share amounts are calculated by
    multiplying the Newell Pro Forma Combined amounts by the merger exchange
    ratio of 0.7883.
 
Balance Sheet Data As of September 30, 1998:
 Total assets.................... $6,689.4
 Working capital.................    820.5
 Total debt......................  1,542.2
 Total stockholders' equity......  2,810.0


 
  See the Notes to Unaudited Pro Forma Condensed Combined Financial Statements
                    included under "Financial Information."
 
                                       11
 
                                                                         SUMMARY


 
                    Newell Summary Historical Financial Data
 
  The following table shows Newell's summary consolidated financial data as of
and for each of the periods indicated. We derived the consolidated financial
data for each of the years in the five year period ended December 31, 1997 from
Newell's audited consolidated financial statements. We derived the consolidated
financial data for the nine month periods ended September 30, 1998 and 1997
from Newell's unaudited consolidated financial statements. The unaudited
consolidated financial data reflect, in the opinion of Newell's management, all
normal recurring adjustments considered necessary by Newell for a fair
presentation of these results. Newell's results of operations for the nine
month period ended September 30, 1998 are not necessarily indicative of the
results which may be expected for the full year 1998. We incorporate into this
joint proxy statement/prospectus by reference the audited consolidated
financial statements of Newell for the period ended December 31, 1997 included
in Newell's Current Report on Form 8-K, dated November 17, 1998, which reflect
Newell's 1998 acquisition of Calphalon Corporation as a pooling of interests
and (2) the unaudited consolidated financial statements of Newell included in
Newell's Form 10-Q for the period ended September 30, 1998. See "Where You Can
Find More Information."
 



                           Nine Months Ended or as of        Year Ended or as of December 31,
                           --------------------------- ------------------------------------------------
                           September 30, September 30,
                               1998          1997        1997      1996      1995      1994      1993
                           ------------- ------------- --------  --------  --------  --------  --------
                                   (unaudited)
Statement of Income Data:
- -------------------------            (In millions, except percentages and per share data)
                                                                          
Net sales...............     $2,650.3      $2,395.0    $3,336.2  $2,972.8  $2,580.3  $2,141.6  $1,694.7
Cost of products sold...      1,786.7       1,631.2     2,259.5   2,020.1   1,759.9   1,437.5   1,127.2
                             --------      --------    --------  --------  --------  --------  --------
 Gross income...........        863.6         763.8     1,076.7     952.7     820.4     704.1     567.5
Selling, general and
 administrative
 expenses...............        404.9         365.1       497.7     461.8     392.9     335.6     274.4
Trade names and goodwill
 amortization and other.         40.5          22.9        31.9      23.6      19.3      15.4      10.1
                             --------      --------    --------  --------  --------  --------  --------
 Operating income.......        418.2         375.8       547.1     467.3     408.2     353.1     283.0
Net non-operating
 expenses (income)......       (169.3)         41.5        61.8      39.0      31.0      14.7       1.9
                             --------      --------    --------  --------  --------  --------  --------
 Income before income
  taxes.................        587.5         334.3       485.3     428.3     377.2     338.4     281.1
Income taxes............        250.7         132.4       192.2     169.3     150.7     137.1     112.4
                             --------      --------    --------  --------  --------  --------  --------
 Net income.............     $  336.8      $  201.9    $  293.1  $  259.0  $  226.5  $  201.3  $  168.7
                             ========      ========    ========  ========  ========  ========  ========
Earnings per share:
 Basic..................     $   2.07      $   1.25    $   1.81  $   1.60  $   1.40  $   1.25  $   1.05
 Diluted................         2.02          1.24        1.80      1.60      1.40      1.25      1.05
Weighted average shares
 outstanding:
 Basic..................        162.5         162.1       162.2     161.9     161.3     160.9     160.4
 Diluted................        173.1         162.8       163.3     162.3     161.6     161.1     160.8
As a % of net sales:
 Gross income...........         32.6%         31.9%       32.3%     32.0%     31.8%     32.9%     33.5%
 Operating income.......         15.8%         15.7%       16.4%     15.7%     15.8%     16.5%     16.7%
 Income before income
  taxes.................         22.2%         14.0%       14.5%     14.4%     14.6%     15.8%     16.6%
 Net income.............         12.7%          8.4%        8.8%      8.7%      8.8%      9.4%     10.0%
Balance Sheet Data:
- -------------------
Total assets............     $4,603.7      $4,055.6    $4,011.7  $3,058.4  $2,965.2  $2,517.8  $1,975.7
Working capital.........        705.7         746.3       719.2     482.6     462.7     141.2      84.8
Total debt..............        955.3       1,483.0       870.7     794.5     941.6     734.8     482.4
Total stockholders'
 equity.................      1,885.5       1,659.8     1,725.2   1,500.0   1,301.6   1,126.9     975.0
Comprehensive Income:
- ---------------------
Net Income..............     $  336.8      $  201.9    $  293.1  $  259.0  $  226.5  $  201.3  $  168.7
 Foreign currency
  translation
  adjustments...........        (11.0)         (9.2)      (15.0)      0.3      (1.5)     (2.4)     (1.9)
 Net unrealized gain on
  securities available
  for sale..............        (78.8)         33.6        42.3      20.7       6.0       9.9       --
                             --------      --------    --------  --------  --------  --------  --------
Comprehensive income,
 net of tax.............     $  247.0      $  226.3    $  320.4  $  280.0  $  231.0  $  208.8  $  166.8
                             ========      ========    ========  ========  ========  ========  ========


 
                                       12
 
SUMMARY


 
                  Rubbermaid Summary Historical Financial Data
   
  The following table shows Rubbermaid's summary consolidated financial data as
of and for each of the periods indicated. We derived the consolidated financial
data for each of the years in the five year period ended December 31, 1997 from
Rubbermaid's audited consolidated financial statements. We derived the
consolidated financial data for the nine month periods ended October 2, 1998
and September 30, 1997 from Rubbermaid's unaudited consolidated financial
statements. The unaudited consolidated financial data reflect, in the opinion
of Rubbermaid's management, all normal recurring adjustments considered
necessary by Rubbermaid for a fair presentation of these results. Rubbermaid's
results of operations for the nine month period ended October 2, 1998 are not
necessarily indicative of the results which may be expected for the full year
1998. We incorporate into this joint proxy statement/prospectus by reference
the audited consolidated financial statements of Rubbermaid included in
Rubbermaid's Annual Report on Form 10-K for the fiscal year ended December 31,
1997 and the unaudited consolidated financial statements of Rubbermaid included
in Rubbermaid's Form 10-Q and Form 10-Q/A for the period ended October 2, 1998.
See "Where You Can Find More Information."     
 



                           Nine Months Ended or as of              Year Ended or as of December 31,
                           ------------------------------    ------------------------------------------------
                           October 2,      September 30,
                              1998              1997           1997      1996      1995      1994      1993
                           -------------   --------------    --------  --------  --------  --------  --------
                                  (unaudited)
Statement of Income Data:
- -------------------------           (In millions, except percentages and per share data)
                                                                                
Net sales...............    $     1,936.8    $     1,825.4   $2,399.7  $2,355.0  $2,344.2  $2,169.4  $1,960.2
Cost of products sold...          1,383.5          1,328.0    1,748.4   1,649.5   1,673.2   1,465.6   1,285.9
                            -------------    -------------   --------  --------  --------  --------  --------
 Gross income...........            553.3            497.4      651.3     705.5     671.0     703.8     674.3
Selling, general, and
 administrative
 expenses...............            353.8            314.2      416.7     432.1     402.6     347.9     328.8
Restructuring costs.....             73.7             16.0       16.0       --      158.0       --        --
                            -------------    -------------   --------  --------  --------  --------  --------
 Operating income.......            125.8            167.2      218.6     273.4     110.4     355.9     345.5
Net non-operating
 expenses                             4.1            (21.3)     (15.3)     28.4      14.7     (11.3)      3.6
                            -------------    -------------   --------  --------  --------  --------  --------
 Income before income
  taxes.................            121.7            188.5      233.9     245.0      95.7     367.2     341.9
Income taxes............             42.6             77.7       91.4      92.6      35.9     139.1     130.5
                            -------------    -------------   --------  --------  --------  --------  --------
 Net income.............    $        79.1    $       110.8   $  142.5  $  152.4  $   59.8  $  228.1  $  211.4
                            =============    =============   ========  ========  ========  ========  ========
Earnings per share:
 Basic..................    $        0.53    $        0.74   $   0.95  $   1.01  $   0.38  $   1.42  $   1.32
 Diluted................    $        0.53    $        0.74   $   0.95  $   1.01  $   0.38  $   1.42  $   1.32
Weighted average shares
 outstanding:
 Basic..................            149.9            149.9      149.9     151.0     158.8     160.9     160.3
 Diluted................            150.3            150.0      149.9     151.0     158.8     160.9     160.3
As a % of net sales:
 Gross income...........             28.6%            27.2%      27.1%     30.0%     28.6%     32.4%     34.4%
 Operating income.......              6.5%             9.2%       9.1%     11.6%      4.7%     16.4%     17.6%
 Income before income
  taxes.................              6.3%            10.3%       9.7%     10.4%      4.1%     16.9%     17.4%
 Net income.............              4.1%             6.1%       5.9%      6.5%      2.5%     10.5%     10.8%
Balance Sheet Data:
- -------------------
Total assets............    $     2,183.1    $     1,914.6   $1,923.9  $2,054.0  $1,691.5  $1,709.2  $1,513.1
Working capital.........            150.6            268.8      249.1     113.9     436.5     631.1     570.4
Total debt..............            586.9            390.2      377.2     557.6     128.7      33.7      34.7
Total stockholders'
 equity.................          1,056.9          1,052.0    1,050.3   1,013.7   1,135.4   1,285.8   1,130.5
Comprehensive Income:
- ---------------------
Net income..............    $        79.1    $       110.8   $  142.5  $  152.4  $   59.8  $  228.1  $  211.4
 Foreign currency
  translation
  adjustments...........             (3.9)            (2.9)     (11.3)     (6.9)     (1.8)    (12.0)     (6.6)
                            -------------    -------------   --------  --------  --------  --------  --------
Comprehensive income,
 net of tax.............    $        75.2    $       107.9   $  131.2  $  145.5  $   58.0  $  216.1  $  204.8
                            =============    =============   ========  ========  ========  ========  ========


 
                                       13
 
                                                                         SUMMARY


 
                                 RISK FACTORS
 
  In addition to the other information included and incorporated by reference
in this joint proxy statement/prospectus, you should carefully consider the
following factors in evaluating the proposals to be voted on at your special
stockholders' meeting.
 
We may not achieve the significant increases in operating income we expect to
result from the integration of Rubbermaid into Newell.
 
  We expect the integration of Rubbermaid into Newell to result in significant
increases in operating income. Over the last 30 years, Newell has successfully
acquired and integrated almost 100 companies. The Rubbermaid acquisition,
however, is substantially larger than any previous acquisition by Newell.
There can be no assurance that we will realize the operating income
improvements that we anticipate from integrating our operations as fully or as
quickly as we expect.
 
Rubbermaid stockholders will receive lower market value for their shares in
the merger if the market price of Newell common stock declines.
 
  Because the number of shares of Newell common stock that Rubbermaid's
stockholders will receive in the merger is fixed, the market value of these
shares will depend on the market price of Newell common stock when the merger
becomes effective. If the Newell common stock price declines, the market value
of the Newell common stock to be received by Rubbermaid stockholders in the
merger will correspondingly decline. The price of Newell common stock may vary
from its price at the date of this joint proxy statement/prospectus because of
various factors, including:
 
  . general market, industry and economic conditions;
 
  . changes in the business, operations or prospects of Newell;
 
  . market assessments of the likelihood the merger will be completed; and
 
  . market assessments of the timing of integration savings after the merger.
 
  Neither Newell nor Rubbermaid will have the right to terminate the merger
agreement as a result of changes in Newell's common stock price. You should
obtain current market quotations for Newell common stock.
 
Newell expects to incur a significant one-time charge relating to its
integration plan that could materially and adversely affect its results of
operations in 1999.
 
  Newell is developing a plan to integrate the operations of Rubbermaid after
the merger. Newell anticipates that a one-time charge will be incurred in
connection with this integration. Newell cannot identify the timing during
1999, the nature or the amount of this charge at the date of this joint proxy
statement/prospectus. The amount of this charge may be significant. This
charge would affect Newell's results of operations in the period in which the
charge is recorded.
 
                                      14
 
RISK FACTORS


 
 
Computer system failures or miscalculations resulting from an inability to
interpret dates beyond 1999 could materially and adversely affect our
operations.
 
  Any computer equipment that uses two digits instead of four to specify the
year will be unable to interpret dates beyond the year 1999. This "Year 2000"
issue could result in system failures or miscalculations causing disruptions of
operations. The three major areas that could be affected critically are
financial and operating systems, manufacturing systems and equipment, and
third-party relationships with suppliers and customers. Each of us has
developed plans to address this exposure.
 
  The three critical areas affected and our accomplishments to date are shown
below:
 



               Area                                   Accomplished to Date
               ----                                   --------------------
                                  
Financial and operating systems      . Systems assessed
                                     . Detailed plans have been or continue to be developed
                                     . Conversion commenced
Manufacturing systems and equipment  . Systems assessed
                                     . Detailed plans have been or continue to be developed
                                     . Conversion commenced
Third-party relationship with        . Communicating with critical suppliers and
 suppliers and customers               customers to ascertain whether they are addressing
                                       potential Year 2000 issues


 
  Although we cannot give you any assurance, we believe that our internal
systems will be Year 2000 compliant. The failure of major suppliers and
customers to achieve Year 2000 compliance could materially and adversely affect
Newell's and Rubbermaid's results of operations.
 
Newell stockholders will experience dilution in their current interest in the
earnings, book value and voting power of Newell as a result of the merger.
 
  As a result of the merger, Newell common stockholders will experience
dilution in earnings, book value and voting power, as shown below:
 



                                                          Before After
                                                          Merger Merger Dilution
                                                          ------ ------ --------
                                                               
   Newell Diluted Earnings Per Share:
   1995.................................................. $ 1.40 $ 1.00  $0.40
   1996..................................................   1.60   1.46   0.14
   1997..................................................   1.80   1.20   0.60
   Newell Book Value Per Share:
   December 31, 1997..................................... $10.63 $ 9.43  $1.20
   September 30, 1998....................................  11.60  10.01   1.59
   Approximate Voting Power..............................   100%  60%     40%


 
  We do not expect earnings per share for the combined company to exceed that
which could have been achieved by Newell alone until 2000, as anticipated
increases in operating income resulting from Rubbermaid's integration into
Newell are realized. Because we anticipate that it will take two years to
realize the full amount of integration savings and synergies, earnings per
share for the combined company in 1999 are expected to be less than Newell
could have achieved by itself in 1999.
 
                                       15
 
                                                                    RISK FACTORS


 
 
We have made statements concerning future financial results of the companies
that are subject to risks and uncertainties, which may cause these results to
differ materially from those expressed in our statements.
 
  We have each made forward-looking statements in this document that are
subject to risks and uncertainties. Forward-looking statements include
information concerning future financial results of Newell, Rubbermaid or the
combined company. Also, when we use words such as "intend," "anticipate,"
"believe," "expect" or similar expressions, we are making forward-looking
statements. You should note that many factors may affect the future financial
results of Newell, Rubbermaid or the combined company. In addition, these
factors could cause those results to differ materially from those expressed in
our forward-looking statements. These factors include:
 
 . the strength or weakness of retail economies, which are affected by consumer
  demand, conditions of the consumer products retail industry and weather
  conditions;
 
 . the risk that Rubbermaid's businesses may not be successfully integrated
  with Newell's businesses;
 
 . the risk that we may not fully realize the benefits expected to result from
  the merger, including operating income improvements;
 
 . the intensely competitive retail environment. Our principal customers
  continually evaluate which product suppliers to use, resulting in (1)
  pricing pressures, (2) the continual need for ongoing improvements in
  customer service, and (3) the potential for substantial raw material cost
  increases that may not be recovered through higher selling prices;
 
 . our ability to continue to make sufficient strategic acquisitions at
  reasonable prices;
 
 . our ability to integrate the acquired businesses within a reasonable period
  of time;
 
 . the effect on our foreign operations of (1) currency fluctuations, (2)
  tariffs, (3) nationalization, (4) exchange controls, (5) limitations on
  foreign investment in local businesses, and (6) other political, economic
  and regulatory risks; and
 
 . the risk that our analyses of these factors and their risks could be
  incorrect or that the strategies developed to address them could be
  unsuccessful.
 
                                      16
 
RISK FACTORS


 
                                   THE MERGER
 
General
 
  We are furnishing this joint proxy statement/prospectus to stockholders of
Newell and Rubbermaid in connection with the solicitation of proxies by the
Newell Board and the Rubbermaid Board for use at their special stockholders'
meetings.
   
  At Newell's special meeting, which will be held on March 11, 1999, Newell
stockholders will be asked to vote on two separate proposals. The first
proposal seeks approval of the issuance of shares of Newell common stock to
Rubbermaid stockholders in the merger. The approval will also cover Newell
shares to be issued upon exercise of Rubbermaid stock options which will be
converted into Newell stock options in the merger. The second proposal seeks
approval of an amendment to Newell's certificate of incorporation to change
Newell's name at the time of the merger to "Newell Rubbermaid Inc."     
   
  At Rubbermaid's special meeting, which will also be held on March 11, 1999,
Rubbermaid stockholders will be asked to adopt the merger agreement. The merger
agreement provides for the merger of a wholly owned subsidiary of Newell into
Rubbermaid, with Rubbermaid surviving the merger as a wholly owned subsidiary
of Newell.     
 
  Copies of the merger agreement and the proposed amendment to Newell's
certificate of incorporation are attached to this document as Annex A and Annex
B.
 
Background of the Merger
 
  In 1996, Newell and Rubbermaid engaged in exploratory discussions regarding
the strategic benefits of a possible combination of the two companies. In
connection with these discussions, Newell and Rubbermaid entered into a
confidentiality agreement containing provisions prohibiting each party from
attempting to acquire the other party or significant assets of the other party
without the other party's prior consent. Newell and Rubbermaid could not reach
agreement regarding a business combination, and discussions were terminated
while still at the exploratory stage.
 
  In early 1997, Rubbermaid decided to sell its office products business in
order to continue its strategy of divesting non-core businesses and focusing
its competitive strengths on its home, commercial, juvenile and infant products
businesses. In March 1997, Rubbermaid contacted several strategic buyers,
including Newell, regarding the possibility of purchasing Rubbermaid's office
products business. Upon completion of the auction process, Newell and
Rubbermaid entered into a definitive agreement for the purchase of the office
products business in May 1997. Newell's acquisition of this business was
consummated in June 1997.
 
  In the fall of 1997, Newell decided to sell its Newell Plastics division,
consisting of the Plastics, Inc. business and the Anchor Hocking Plastics
business, and Newell contacted Rubbermaid as a prospective purchaser. Although
Newell and Rubbermaid executed a letter of intent in October 1997 for the sale
of the Anchor Hocking Plastics business, discussions terminated in November
1997 because they were not able to agree on a purchase price. (Newell
subsequently sold the Newell Plastics businesses to an unrelated purchaser.)
 
  Newell subsequently made several informal inquiries of Rubbermaid. However,
Rubbermaid did not express an interest in a business combination with Newell.
 
  In light of Rubbermaid's 1997 financial performance, Rubbermaid's management
was requested to review strategic alternatives at the January 1998 meeting of
the Rubbermaid Board. Management's
 
                                       17
 
                                                                      THE MERGER


 
presentation was taken under consideration and subsequently a special meeting
of the Rubbermaid Board was held in April 1998 during which Rubbermaid's
financial and legal advisors made presentations on Rubbermaid's strategic
alternatives. At the conclusion of the meeting, Rubbermaid's management was
directed to continue with the execution of its operating plans and
restructuring actions that were developed to achieve Rubbermaid's financial
objectives as an independent company.
 
  By late summer 1998, Rubbermaid's management had become increasingly
concerned about the impact of the accelerating trend of customer and supplier
consolidation on Rubbermaid's ability to achieve superior financial
performance as an independent company. As a result of these concerns,
Rubbermaid's management requested a meeting with the Rubbermaid Board.
Management thereafter engaged Goldman, Sachs & Co. and Jones, Day, Reavis &
Pogue to act as Rubbermaid's financial and legal advisors, respectively, in
connection with the meeting and any actions or transactions resulting from the
meeting.
 
  On September 28, 1998, Rubbermaid's management and the Rubbermaid Board met
via teleconference and discussed the trends facing Rubbermaid and the options
available to Rubbermaid, including a possible strategic merger or sale
involving Rubbermaid. The Rubbermaid Board decided to further pursue the
internal discussions at a meeting the following day.
 
  On September 29, 1998, Rubbermaid's management and the Rubbermaid Board met
to discuss management's concerns regarding Rubbermaid's future and certain
potential strategic alternatives. During this meeting, the Rubbermaid Board
and management engaged in extensive discussions about Rubbermaid's business
and future prospects, particularly its prospects as an independent company.
Goldman Sachs reviewed certain financial and strategic alternatives available
to Rubbermaid, including maintaining Rubbermaid's current course as an
independent company and the prospects of a potential strategic merger. Goldman
Sachs then reviewed the alternatives available to Rubbermaid, the relative
attractiveness of those alternatives and potential merger partners. In the
course of these discussions, management indicated that Newell was an
attractive merger partner in part because of the great synergy potential
between the companies and because Newell had previously expressed interest in
pursuing a strategic merger with Rubbermaid. The Rubbermaid Board engaged in
extensive discussions regarding Newell, the complementary strengths of
Newell's and Rubbermaid's businesses, the developing consolidation trends in
the consumer products industry and the ability of a combined company to
compete more effectively in the face of industry trends. During this meeting,
the Rubbermaid Board carefully considered the benefits and risks to Rubbermaid
and its stockholders of a transaction with Newell. As a result of these
discussions, the Rubbermaid Board determined that Newell was the most
attractive potential merger partner, providing the best opportunity to achieve
significant synergies and, because of the companies' relative market
capitalizations, enabling Rubbermaid's stockholders to own a substantial
portion of the combined company after the merger was completed. As a result,
the Rubbermaid Board authorized management to explore a possible strategic
merger with Newell and initiate discussions to that end.
 
  On September 29, following the meeting, Rubbermaid, through Goldman Sachs,
initiated contact with Newell and commenced preliminary discussions regarding
a possible strategic merger. On October 1, 1998, Newell's management informed
the Newell Board of these discussions, and Newell engaged Robert W. Baird &
Co. Incorporated and Schiff Hardin & Waite to act as Newell's financial and
legal advisors, respectively, in connection with this possible transaction. On
October 2, 1998, Newell and Rubbermaid executed a confidentiality agreement.
After that time, Newell and Rubbermaid provided each other with information
relating to business, financial, legal, tax and accounting matters. Legal and
accounting advisors of Newell and Rubbermaid began reviewing and analyzing
that information.
 
  In connection with the due diligence investigations conducted by Newell and
Rubbermaid in October 1998 prior to signing the merger agreement, Newell and
Rubbermaid each provided to the
 
                                      18
 
THE MERGER


 
other confidential financial projections for 1998 and 1999. These projections
had been prepared earlier for the internal use of management and not with a
view toward public disclosure. There can be no certainty that results reflected
in the projections will be achieved, and actual results may vary materially
from these projections. See "Forward-Looking Statements May Prove Inaccurate."
 
  The Newell internal projections that Newell provided to Rubbermaid did not
differ materially from research analysts' October 1998 consensus estimates for
Newell's 1998 and 1999 results. (Subsequently, on December 10, 1998, Newell
reported publicly that, principally due to lower than expected sales in October
and November 1998, it was unlikely that Newell would reach the fourth quarter
1998 analysts' consensus earnings estimate of $.67 per share and that earnings
for the fourth quarter, exclusive of one-time charges, were more likely to be
in the range of $.56-$.61 per share, compared to $.56 in the fourth quarter of
1997. See "Summary--Recent Newell Financial Results.")
 
  Rubbermaid provided Newell with summary projections for 1998 and 1999. The
Rubbermaid projections for 1999 did not differ materially from research
analysts' October 1998 consensus estimate for Rubbermaid's 1999 results. The
Rubbermaid internal forecast for 1998 reflected earnings per share, excluding
non-recurring items, which were less than the consensus estimate at that time.
Rubbermaid anticipates releasing its actual results for 1998 in February 1999.
Rubbermaid also provided Newell with sales information from Rubbermaid's
strategic plan for 1999-2001, which reflected increases in net sales from
approximately $2.5 billion in 1998 to approximately $3.6 billion in 2001.
 
  On October 7, 1998, the Rubbermaid Board met telephonically to review the
status of discussions with Newell. During this meeting, Rubbermaid's management
updated the Rubbermaid Board on the nature of the discussions with Newell.
Following these discussions, the Rubbermaid Board authorized management to
continue to pursue a strategic merger with Newell.
 
  On October 10, 1998, Newell made an initial stock-for-stock acquisition
proposal to Rubbermaid valued at $30 to $32 per share of Rubbermaid common
stock, based on the then current price of Newell common stock. That proposal
was not accepted. After that time, representatives of Newell and Rubbermaid
continued to negotiate to seek an acceptable exchange ratio. On October 12,
1998, the Rubbermaid Board again met telephonically for an update of the
discussions with Newell. Following these discussions, the Rubbermaid Board
authorized management to continue discussions with Newell, and authorized
Goldman Sachs to contact other possibly interested companies should the
discussions with Newell be unsuccessful. Rubbermaid's position was that the
exchange ratio should value Rubbermaid at not less than $40 per share based on
the pre-announcement price of the Newell common stock. On October 15, 1998,
after Newell indicated that it was not willing to base the exchange ratio on a
value above $36 per share, Rubbermaid terminated negotiations.
 
  On October 16, 1998, in light of the termination of discussions with Newell,
Rubbermaid, through Goldman Sachs, began to contact other companies that might
be interested in pursuing a business combination with Rubbermaid.
 
  Also on October 16, the Newell Board met telephonically to review the
possibility of a transaction with Rubbermaid. At this meeting, Newell's
management discussed the negotiations to date and the business terms of a
possible transaction. Baird reviewed with the Newell Board the status of
negotiations, a business and financial overview of Rubbermaid and a financial
analysis of possible terms of a business combination with Rubbermaid. After
further discussion, the Newell Board authorized management to continue
negotiations with Rubbermaid and decided to meet again to discuss further
developments.
 
  On October 17, 1998, Newell and Rubbermaid reopened negotiations. After
extensive discussions, Newell and Rubbermaid reached a tentative agreement,
subject to negotiation of definitive documentation and requisite board
approvals, on a preliminary exchange ratio of 0.7883 shares of Newell common
stock for each share of Rubbermaid common stock. The merger exchange ratio was
calculated
 
                                       19
 
                                                                      THE MERGER


 
so that it would provide a value of $37 per share of Rubbermaid common stock
based on the $46 15/16 closing price per share of Newell common stock on
October 16, 1998, the last available trading date. On this basis, the merger
exchange ratio represented a premium of 46.5% for Rubbermaid's stockholders.
Newell's offer at this exchange ratio was conditioned upon, among other
things, the right, under certain circumstances, to receive a termination fee
of $140 million, rather than the $125 million termination fee previously
proposed. The exchange ratio was negotiated in a series of conversations
between the chief executive officers of Newell and Rubbermaid with the
assistance of their financial advisors, Baird and Goldman Sachs. The two chief
executive officers also discussed the composition of the Newell Board after
the merger, the name of the combined company and the composition of its senior
management.
 
  On October 18, 1998, Newell and Rubbermaid representatives and their legal
advisors met to complete due diligence and to negotiate the merger agreement.
Extensive negotiations took place with respect to a number of issues,
particularly those relating to Rubbermaid's employees and the communities in
which Rubbermaid operates and restrictions on the conduct of the companies'
businesses prior to completion of the merger. In addition, Newell requested a
circumstance requiring payment of the termination fee which was in addition to
the circumstances initially discussed by the parties. After negotiations,
Rubbermaid agreed to accept the $140 million termination fee, and Newell
agreed to drop its request for the additional termination fee payment
circumstance. On October 19, 1998, the respective legal advisors of Newell and
Rubbermaid continued to negotiate the terms of a merger agreement.
 
  On October 19, 1998, the Rubbermaid Board held a meeting to review the
proposed terms of the merger and the conditions of the merger agreement.
During this meeting, Goldman Sachs reviewed the status of the negotiations and
Rubbermaid's outside legal counsel reviewed the terms and conditions of the
merger agreement, as currently negotiated, and the legal duties and
responsibilities of the Rubbermaid Board in connection with the proposed
transaction. Goldman Sachs presented an analysis of the financial terms of the
merger, including a discussion of valuation methodologies and analyses used in
evaluating the proposed transaction. After its presentation, Goldman Sachs
provided an oral opinion to the effect that, on the date of its opinion and
based upon and subject to the various considerations set forth in its opinion,
the merger exchange ratio was fair from a financial point of view to
Rubbermaid's stockholders. Following a thorough discussion, the Rubbermaid
Board unanimously determined that the merger was in the best interests of the
stockholders of Rubbermaid and, subject to Newell's approval, approved the
merger and the merger agreement, unanimously resolved to recommend that
stockholders of Rubbermaid vote to adopt the merger agreement and authorized
its executive officers to execute the merger agreement. See "Opinions of
Financial Advisors--Opinion of Financial Advisor to Rubbermaid."
 
  On October 20, 1998, the Newell Board met to review the proposed terms and
conditions of the merger agreement. During this meeting, Newell's management
reviewed the status of the negotiations. Newell's general counsel reviewed the
terms and conditions of the merger agreement, as currently negotiated, and the
legal duties and responsibilities of the Newell Board in connection with the
proposed transaction. Baird presented an analysis of the financial terms of
the merger, including a discussion of financial data and analyses used in
evaluating the proposed transaction. After its presentation, Baird provided an
oral opinion to the effect that, on the date of its opinion and based upon and
subject to the various considerations set forth in its opinion, the merger
exchange ratio of 0.7883 was fair, from a financial point of view, to Newell.
Following substantial discussion, the Newell Board unanimously determined that
the merger, the related issuance of Newell common stock in connection with the
merger and the conversion of Rubbermaid options to Newell options were fair to
and in the best interests of Newell and its stockholders. The Newell Board
approved these matters, as well as the change of Newell's name, all as
provided in the merger agreement. The Newell Board also resolved to recommend
that the stockholders of Newell vote to approve the issuance of Newell common
stock in connection with the merger and authorized its officers to execute the
merger
 
                                      20
 
THE MERGER


 
agreement and take other steps to complete the merger. See "Opinions of
Financial Advisors--Opinion of Financial Advisor to Newell."
 
  On the evening of October 20, 1998, after approval of the Newell Board, the
parties executed the merger agreement. Prior to the commencement of trading on
October 21, 1998, Newell and Rubbermaid issued a joint press release announcing
the execution of the merger agreement.
 
Recommendation of the Newell Board; Newell's Reasons for the Merger
 
  The Newell Board believes that the terms of the merger are fair to and in the
best interests of Newell and its stockholders. The Newell Board has unanimously
approved proposals relating to Newell's share issuance and name change in
connection with the merger and unanimously recommends to its stockholders that
they vote FOR those proposals.
 
  The Newell Board believes that the merger will combine Newell's strengths in
customer service, operating efficiency and acquiring and integrating businesses
with Rubbermaid's well-known consumer brands and new product development focus.
The Newell Board sees the combination of Newell and Rubbermaid as an
exceptional strategic fit. The businesses are complementary, selling similar
categories of products through similar distribution channels, but with
virtually no product overlap. The Newell Board believes that the broader multi-
product offering of the combined company will enhance its importance to its
customers and permit it to serve them better. It also expects that the addition
of Rubbermaid's widely recognized brands to Newell's widely recognized family
of brands will create a broad range of leading brands that will be attractive
to customers.
 
  The Newell Board views the Rubbermaid transaction as a major development in
Newell's long-term strategy of growth through key acquisitions. Newell has
grown primarily by acquiring complementary businesses and product lines. Since
1990, it has completed more than 20 major acquisitions with aggregate annual
sales of more than $3 billion in the year prior to acquisition. Newell's
acquisition strategy focuses on businesses with a strategic fit, recognized
brands and leading positions in their markets, a low technology level, a long
product life cycle and the potential to meet Newell's standards of
profitability.
 
  In recent years, Rubbermaid has not been able to achieve its profit
objectives and has announced substantial internal restructuring programs
designed to reduce costs, streamline manufacturing and distribution operations
and accelerate growth. The Newell Board believes that Rubbermaid's operating
efficiency and customer service can be significantly improved by implementing
Newell's established profit improvement and productivity enhancement process.
The Newell Board further believes that, as described below under "Anticipated
Operating Income Improvements," the merger provides opportunities for
significant operating income improvements. The Newell Board believes that, as
part of Newell, the Rubbermaid businesses have the potential to meet or exceed
Newell's standards of profitability.
 
  The Newell Board expects that the broader range of product categories and
brands and the enhanced international presence of the combined company should
afford increased acquisition and internal growth opportunities. The Newell
Board also believes that Rubbermaid's demonstrated record of new product
development should foster increased internal growth of Newell's product lines.
 
  In reaching its decision to approve and recommend the share issuance and the
name change proposals, the Newell Board also considered a number of additional
factors, including those described below:
 
  . The views of Newell's management regarding the proposed transaction and
    the anticipated operating income improvements;
 
                                       21
 
                                                                      THE MERGER


 
 
  . The enhanced strategic and market position of the combined entity beyond
    that achievable by Newell alone;
 
  . The financial strength of the combined company and the increased
    flexibility that this strength should provide;
 
  . Information concerning the business, assets, liabilities, capital
    structure, financial performance and condition and prospects of Newell
    and Rubbermaid;
 
  . The opinion of Baird to the Newell Board to the effect that, on the date
    of its opinion and based upon and subject to the various considerations
    set forth in its opinion, the merger exchange ratio was fair, from a
    financial point of view, to Newell (see "Opinions of Financial Advisors--
    Opinion of Financial Advisor to Newell");
 
  . Current and historical market prices and trading information with respect
    to the common stocks of Newell and Rubbermaid;
 
  . The merger exchange ratio and the historical market prices for Newell and
    Rubbermaid common stock;
 
  . The expectation that, after realization of anticipated operating income
    improvements, the transaction would be accretive to Newell's earnings per
    share beginning with the year 2000;
 
  . The composition and strength of the management of the combined company
    and the agreement to change the composition of the Newell Board when the
    merger is completed;
 
  . The potential effect of the public announcement of the merger on
    customers;
 
  . The terms and structure of the transaction and the terms and conditions
    of the merger agreement, including the fixed nature of the exchange
    ratio, the size of the termination fees and the circumstances in which
    they are payable;
 
  . The ability to consummate the merger as a tax-free reorganization for
    federal income tax purposes; and
 
  . The ability to treat the merger for accounting purposes as a pooling of
    interests.
 
  The Newell Board also considered certain countervailing factors in its
deliberations concerning the merger, including:
 
  . The expectation that the merger would initially be dilutive to Newell's
    earnings per share;
 
  . The premium being paid for Rubbermaid, based on historical market prices,
    and the potential effect of the public announcement of the merger on the
    market price of Newell common stock in the short term;
 
  . The risk that some key employees of Rubbermaid would depart;
 
  . The challenges of integrating Rubbermaid, given the size of the company;
 
  . The risk that Rubbermaid could, under the terms of the merger agreement,
    negotiate with third parties that make takeover proposals and accept
    superior proposals; and
 
  . The risk that the merger would not be consummated.
 
In the view of the Newell Board, these considerations were not sufficient,
individually or in the aggregate, to outweigh the advantages of the merger.
 
  The Newell Board considered Baird's opinion and underlying analyses as a
whole and did not separately evaluate each analysis performed by Baird. In
particular, the Newell Board did not make any judgment that any analysis
performed by Baird supported or did not support Baird's opinion. The Newell
Board recognized that the implied value of the merger consideration was within
the range of theoretical values for Rubbermaid determined using a number of
the analyses on which Baird's opinion
 
                                      22
 
THE MERGER


 
was based. Based on the $46 15/16 closing price of Newell common stock on
October 16, 1998, the implied value of the merger consideration at that time
was $37 per share of Rubbermaid common stock. The Newell Board also recognized,
however, that $37 per share was higher than the range of theoretical values for
Rubbermaid determined using other analyses on which Baird's opinion was based
that were part of its "Analysis of Selected Publicly Traded Rubbermaid
Comparable Companies." In this regard, however, the Newell Board recognized
that those other analyses did not take into account the operating income
improvements expected to result from the merger. The Newell Board also
recognized that $37 per share was higher than the range of theoretical values
for Rubbermaid determined using mean and median data, in contrast to high and
low data, in the "Analysis of Selected Comparable Acquisition Transactions" on
which Baird's opinion was based. In this regard, however, the Newell Board
recognized that $37 per share was within the ranges of theoretical values for
Rubbermaid based on high and low data, in contrast to mean and median data,
that were part of the "Analysis of Selected Comparable Acquisition
Transactions." It also recognized that those analyses did not take into account
the operating income improvements expected to result from the merger. See
"Opinions of Financial Advisors--Opinion of Financial Advisor to Newell" and
"--Anticipated Operating Income Improvements."
 
  The foregoing discussion of the information and factors considered by the
Newell Board includes all material factors considered by the Newell Board. In
light of the wide variety of factors considered in its evaluation of the merger
and the complexity of these matters, the Newell Board did not find it
practicable to and did not attempt to quantify, rank or otherwise assign
relative weights to these factors. The Newell Board conducted an overall
analysis of the factors described above, including discussions with Newell's
management and legal, financial and accounting advisors. In considering the
factors described above, individual members of the Newell Board may have given
different weight to different factors. The Newell Board considered all these
factors as a whole and considered the factors overall to be favorable to and to
support its determination.
 
  After considering all of the factors described above as of the date of this
joint proxy statement/prospectus, the Newell Board continues to believe that
the merger is in the best interests of Newell and its stockholders and
continues to recommend that Newell stockholders vote FOR the share issuance and
the name change proposals.
 
 Anticipated Operating Income Improvements.
 
  The Newell Board believes that the combined company will be well-positioned
to realize significant increases in operating income. That belief is based on:
 
  . Past experience. Newell has successfully acquired and integrated almost
    100 companies in the past 30 years, including Anchor Hocking which, at the
    time of acquisition, was substantially larger than Newell;
 
  . The compatible nature of Newell and Rubbermaid. Both sell high-volume
    consumer products to the same basic customers;
 
  . The complementary strengths of the two companies; and
 
  . Newell management's review of Rubbermaid's operations and opportunities
    expected to be created through the merger.
   
  Newell management's review of Rubbermaid and analysis of the proposed merger
identified $300- $350 million of expected annual operating income improvements
to be made by the year 2000: $115- $130 million in 1999 and an additional $185-
$220 million in the year 2000. These expected 1999 improvements are in excess
of estimated 1998 results for Rubbermaid on a stand-alone basis. The expected
2000 improvements are in excess of the expected 1999 results for the combined
company, including the expected $115- $130 million in 1999 operating income
improvements.     
 
 
                                       23
 
                                                                      THE MERGER


 
  We expect these operating income improvements to be realized as a result of
four major initiatives:
 
    (1) Improvement of Rubbermaid's customer service. Newell is known for its
  outstanding customer service. Today, 98% of Newell's orders are shipped on-
  time and complete to its customers, usually within 2-3 days. Rubbermaid's
  service levels are not consistently at that level. In Newell's experience,
  low service levels adversely affect customer relations leading to higher
  returns and allowances and promotional requirements. Thus, as service
  levels at Rubbermaid improve to Newell's standards, returns and allowances
  and promotional requirements should be reduced and net sales should
  increase.
 
    Operating Income Improvement Expected: 1999: $5-$10 million
                                          2000: $25-$30 million
 
    (2) Restructuring and integration of Rubbermaid's operations, resulting
  from:
 
     . improvements in raw material purchasing;
 
     . productivity enhancements through the purchase of more efficient
       equipment;
 
     . improvements in logistics; and
 
     . integration of U.S. facilities and European facilities.
 
    Operating Income Improvement Expected: 1999: $80-$85 million
                                          2000: $40-$45 million
 
    (3) Restructuring and integration of Rubbermaid's administrative support
  functions into Newell, resulting from:
 
     . reduction in corporate overhead; and
 
     . centralization of support functions, including:
 
        (a) credit and collection;
 
        (b) computer information services; and
 
        (c) accounts payable.
 
    Operating Income Improvement Expected: 1999: $30-$35 million
                                          2000: $50-$55 million
 
    (4) Other anticipated synergies, including:
 
     . new market opportunities;
 
     . internal growth opportunities;
 
     . international growth opportunities;
 
     . acquisition opportunities; and
 
     . incremental cost savings from the combination.
 
    Operating Income Improvement Expected: 1999: $0
                                          2000: $70-$90 million
 
  Newell anticipates that a one-time charge will be incurred in connection
with the integration. Newell cannot identify when this charge will be incurred
in 1999 or the nature or amount of the charge as of the date of this joint
proxy statement/prospectus. However, this charge could materially affect
Newell's results of operations in the period it is recorded.
 
  No assurance can be given that the operating income improvements described
above will be achieved, or, for that matter, achieved on the timetable
discussed above. See "Forward-Looking Statements May Prove Inaccurate" and
"Risk Factors."
 
                                      24
 
THE MERGER


 
 
Recommendation of the Rubbermaid Board; Rubbermaid's Reasons for the Merger
 
  The Rubbermaid Board has determined that the merger is fair to and in the
best interests of the stockholders of Rubbermaid, has unanimously approved the
merger agreement, and unanimously recommends that the stockholders of
Rubbermaid vote FOR adoption of the merger agreement.
 
  At its October 19, 1998 meeting, the Rubbermaid Board determined that the
merger was fair to and in the best interests of Rubbermaid and its stockholders
and approved the merger agreement. The Rubbermaid Board believes that the
merger presents a unique opportunity to create a premier supplier in the
consumer products industry.
 
  In reaching its decision to approve the merger agreement, the Rubbermaid
Board consulted with Rubbermaid management, as well as with its financial and
legal advisors, and considered a variety of factors, including the following:
 
  . The strategic and financial alternatives, including recapitalizations,
    share repurchases and dispositions of underperforming operations,
    available to Rubbermaid on a stand-alone basis in the competitive arena of
    global retailers, the strong strategic fit between Rubbermaid and Newell
    and the potential for significant near term and long term synergies
    expected to result from the merger;
 
  . Newell's proven track record in integrating acquired companies and
    improving operating efficiency and gross margins of acquired companies;
 
  . Synergies available upon combining the two companies, which are estimated
    to be an aggregate of $250-300 million over Rubbermaid's previously
    announced restructuring savings;
 
  . The course of the discussions and negotiations with representatives of
    Newell relating to the merger, including the discussions on October 17,
    1998 at which representatives of Newell informed representatives of
    Rubbermaid that the merger exchange ratio of 0.7883 represented Newell's
    best and final offer;
 
  . The merger exchange ratio and the historical market prices for Rubbermaid
    and Newell stock, including the increases in the market price for Newell
    stock during 1998;
 
  . Historical and forecasted financial information relating to Rubbermaid and
    Newell, the results of Rubbermaid's due diligence investigation of Newell
    and the other information exchanges with Newell;
 
  . The fact that the merger agreement would, subject to certain limitations,
    permit Rubbermaid to terminate the merger agreement at the same time it
    enters into an agreement with a third party that has made a proposal to
    acquire Rubbermaid on terms that are more favorable to Rubbermaid's
    stockholders than the proposed merger with Newell upon payment of a $140
    million termination fee to Newell;
 
  . The interests of Rubbermaid's associates and the communities in which
    Rubbermaid operates;
 
  . The oral opinion of Goldman Sachs to the Rubbermaid Board to the effect
    that, on the date of its opinion, and based upon and subject to the
    various considerations set forth in its opinion, the merger exchange ratio
    was fair from a financial point of view to Rubbermaid stockholders (see
    "Opinions of Financial Advisors--Opinion of Financial Advisor to
    Rubbermaid");
 
  . The expectation that the merger would be accounted for as a pooling of
    interests transaction and accomplished on a tax-free basis for federal
    income tax purposes, except for tax payable on cash received by Rubbermaid
    stockholders for fractional shares or pursuant to the exercise of
    dissenters' rights; and
 
                                       25
 
                                                                      THE MERGER


 
 
  . The proposed arrangements with members of management of Rubbermaid and
    Newell, including that Mr. Schmitt would serve as a Vice Chairman of
    Newell after the merger, and that five additional persons designated by
    the Rubbermaid Board and reasonably acceptable to the Newell Board would
    be members of the fifteen-person board of directors of Newell following
    the merger.
 
  The Rubbermaid Board also considered certain countervailing factors in its
deliberations concerning the merger, including:
 
  . The potential disruption of Rubbermaid's business that might result from
    the announcement of the merger;
 
  . The possible difficulties of integrating the two companies' managements
    and corporate cultures;
 
  . The uncertainty regarding stockholders', customers' and employees'
    perceptions of the merger;
 
  . The fact that the merger exchange ratio was fixed and therefore would not
    change as a result of fluctuations in the market price for Rubbermaid
    common stock or Newell common stock or otherwise; and
 
  . The possibility that the merger may not be completed.
 
  In the view of the Rubbermaid Board, these considerations were not
sufficient, individually or in the aggregate, to outweigh the advantages of
the merger.
 
  The foregoing discussion of the information and factors considered by the
Rubbermaid Board includes all material factors considered by the Rubbermaid
Board. In view of the wide variety of factors, both positive and negative,
considered by the Rubbermaid Board, the Rubbermaid Board did not find it
practical to, and did not, quantify or otherwise seek to assign relative
weights to the specific factors considered. After taking into consideration
all of the factors set forth above as of the date of this joint proxy
statement/prospectus, the Rubbermaid Board continues to believe that the
merger is in the best interests of Rubbermaid and its stockholders and
continues to recommend adoption of the merger agreement.
 
Accounting Treatment
 
  The merger is expected to qualify as a pooling of interests for accounting
and financial reporting purposes. Under this method of accounting, the
recorded assets and liabilities of Newell and Rubbermaid will be carried
forward to Newell at their historical recorded amounts, subject to any
adjustments required to conform the accounting policies of the two companies.
In addition, net income of the combined company will include income of Newell
and Rubbermaid for the entire fiscal year in which the merger occurs. The
historical reported net income of Newell and Rubbermaid for prior periods will
be combined and restated as net income of Newell after addressing any
accounting conformity issues and eliminating the accounting effects of the
sale of Rubbermaid's office products business to Newell in June 1997.
 
Material Federal Income Tax Consequences
 
  The following discussion is a summary of the material U.S. federal income
tax consequences of the merger to a stockholder of Rubbermaid that holds
shares of Rubbermaid common stock as a capital asset at the time of the
merger. The discussion is based on laws, regulations, rulings and decisions in
effect on the date of this joint proxy statement/prospectus, all of which are
subject to change, possibly with retroactive effect, and to differing
interpretations. This discussion does not address all aspects of federal
taxation that may be relevant to particular Rubbermaid stockholders in light
of their personal circumstances or to Rubbermaid stockholders subject to
special treatment under the Internal Revenue Code of 1986, including:
 
  .  banks;
 
                                      26
 
THE MERGER


 
 
  . tax-exempt organizations;
 
  . insurance companies;
 
  . dealers in securities or foreign currency;
 
  . Rubbermaid stockholders who received their Rubbermaid stock through the
    exercise of employee stock options or otherwise as compensation;
 
  . Rubbermaid stockholders who are not U.S. persons; and
 
  . Rubbermaid stockholders who hold Rubbermaid stock as part of a hedge,
    straddle or conversion transaction.
 
In addition, the discussion does not address any state, local or foreign tax
consequences of the merger.
 
  Rubbermaid stockholders are urged to consult their tax advisors with respect
to the particular tax consequences of the merger to them.
 
  Tax Opinions.  In the opinion of Schiff Hardin & Waite, counsel to Newell,
and Jones, Day, Reavis & Pogue, counsel to Rubbermaid, subject to the
considerations described below under "--Certain Considerations with Respect to
Opinions," the merger will constitute a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code, and Newell, Newell's merger
subsidiary and Rubbermaid will each be a party to the "reorganization" within
the meaning of Section 368(b) of the Internal Revenue Code.
 
  Completion of the merger is conditioned upon counsel to both Newell and
Rubbermaid delivering tax opinions at the time of the merger to the same effect
and subject to substantially the same considerations.
 
  Tax Consequences of the Merger. In accordance with the conclusion of Schiff
Hardin & Waite's and Jones, Day, Reavis & Pogue's tax opinions that the merger
will constitute a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code, and subject to the considerations described below under
"--Certain Considerations with Respect to Opinions," (1) in the opinion of
Schiff Hardin & Waite and Jones, Day, Reavis & Pogue, no gain or loss will be
recognized by Newell, Newell's merger subsidiary or Rubbermaid as a result of
the merger and (2) in the opinion of Jones, Day, Reavis & Pogue:
 
  . no gain or loss will be recognized by a holder of Rubbermaid common stock
    upon the exchange of its shares solely for shares of Newell common stock
    in the merger, except with respect to cash, if any, received by a holder
    of Rubbermaid common stock in lieu of a fractional share of Newell common
    stock or upon the exercise of appraisal rights;
 
  . the aggregate tax basis of the shares of Newell common stock received
    solely in exchange for shares of Rubbermaid common stock in the merger,
    including a fractional share of Newell common stock for which cash is
    received, will be the same as the aggregate tax basis of the shares of
    Rubbermaid common stock surrendered for Newell shares in the merger;
 
  . the holding period for shares of Newell common stock received in exchange
    for shares of Rubbermaid common stock in the merger, including a
    fractional share of Newell common stock, will include the holding period
    of the shares of Rubbermaid common stock surrendered for Newell shares in
    the merger; and
 
  . cash received by a holder of Rubbermaid common stock in lieu of a
    fractional share of Newell common stock or upon the exercise of appraisal
    rights will be treated as received in exchange for shares of Rubbermaid
    common stock and capital gain or loss will be recognized in an amount
    equal to the difference between the amount of cash received and the tax
    basis of the exchanged Rubbermaid shares.
 
                                       27
 
                                                                      THE MERGER


 
 
  Certain Considerations with Respect to Opinions. Schiff Hardin & Waite's and
Jones, Day, Reavis & Pogue's tax opinions are subject to certain assumptions,
limitations and qualifications. The opinions are based on current laws that
may change, possibly with retroactive effect. In issuing their opinions,
Schiff Hardin & Waite and Jones, Day, Reavis & Pogue relied on certain
representations made by Rubbermaid and Newell and their respective
managements. We refer you to the full text of Schiff Hardin & Waite's and
Jones, Day, Reavis & Pogue's tax opinions, which set forth the assumptions
made and matters considered in connection with those opinions. Copies of the
opinions are filed as exhibits to Newell's S-4 registration statement filed
with the Securities and Exchange Commission, of which this joint proxy
statement/prospectus forms a part. Opinions of counsel are not binding on the
Internal Revenue Service and do not preclude the Internal Revenue Service from
adopting a contrary position. In addition, if any of these representations or
assumptions are inconsistent with the actual facts, the U.S. federal income
tax consequences of the merger could be adversely affected.
 
Regulatory Matters
 
  All regulatory waiting periods relating to the merger have expired. In
addition, all regulatory approvals required to complete the merger have been
received from the applicable U.S. and foreign regulatory authorities,
including the antitrust authorities in the United States, Canada and Poland
and for the European Union.
 
  Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, Newell and
Rubbermaid were prohibited from completing the merger until:
 
    (1) notifications were given to the Federal Trade Commission and the
  Antitrust Division of the United States Department of Justice;
 
    (2) certain information was furnished to the Federal Trade Commission and
  the Antitrust Division; and
 
    (3) specified waiting period requirements were satisfied or terminated.
 
In October 1998, Newell and Rubbermaid each filed in connection with the
merger a Notification and Report Form under the Hart-Scott-Rodino Act with the
Federal Trade Commission and the Antitrust Division. The waiting period under
the Hart-Scott-Rodino Act relating to the merger expired on November 29, 1998.
 
  Even though the waiting period under the Hart-Scott-Rodino Act expired, at
any time before or after the merger, the Antitrust Division or the Federal
Trade Commission could, among other things, seek to enjoin the completion of
the merger or seek the divestiture of substantial assets of Newell or
Rubbermaid. Although Newell and Rubbermaid believe that the merger is legal
under the U.S. antitrust laws, there can be no assurance that a challenge to
the merger on antitrust grounds will not be made or, if a challenge is made,
that it would not be successful.
 
  On December 3, 1998, Newell filed a notification under Council Regulation
No. 4064/89 of the European Community and accompanying regulations. Under the
Council Regulation, Newell and Rubbermaid were prohibited from completing the
merger until the European Commission approved the merger. The European
Commission approved the merger on January 13, 1999.
 
  Under Part IX of the Canadian Competition Act, Newell and Rubbermaid were
prohibited from completing the merger until notification was given to the
Director of Investigation and Research. In December 1998, Newell and
Rubbermaid each made, in connection with the merger, a short-form filing under
the Act. The waiting period under the Canadian Competition Act relating to the
merger expired on December 28, 1998.
 
                                      28
 
THE MERGER


 
 
  On November 24, 1998, Newell and Rubbermaid each filed a notification in
Poland under the Counteracting Monopolistic Practices Act and the related
Ordinance of the Council of Ministers. Under the Act, Newell and Rubbermaid
were not permitted to complete the merger until the Competition and Consumers
Protection Office approved the merger, or until the waiting period relating to
the merger expired. The Competition and Consumers Protection Office approved
the merger on December 18, 1998.
 
Appraisal and Dissenters' Rights
 
  Newell stockholders are not entitled to appraisal or dissenters' rights under
Delaware law in connection with the merger.
 
  Rubbermaid stockholders who so desire are entitled to relief as dissenting
stockholders under Ohio Revised Code Section 1701.85. A Rubbermaid stockholder
will be entitled to this relief, however, only if he or she complies strictly
with all of the procedural and other requirements of Section 1701.85. The
following summary is not a complete statement of the method of compliance with
Section 1701.85 and is qualified in its entirety by reference to the copy of
Section 1701.85 attached to this document as Annex E.
 
  A Rubbermaid stockholder who wishes to perfect his or her rights as a
dissenting stockholder in the event the merger is approved:
 
  . must have been a record holder of the Rubbermaid common stock as to which
    that stockholder seeks relief on the record date for the Rubbermaid
    special stockholders' meeting;
 
  . must not have voted his or her shares of Rubbermaid common stock in favor
    of the adoption of the merger agreement; and
 
  . must deliver to Rubbermaid, not later than ten days after Rubbermaid's
    special meeting, a written demand for payment of the fair cash value of
    the shares of Rubbermaid common stock as to which that stockholder seeks
    relief. The written demand must state the stockholder's name, address,
    number of shares of Rubbermaid common stock as to which that stockholder
    seeks relief and the amount claimed as the fair cash value of those shares
    of stock.
 
  A vote against the adoption of the merger agreement will not satisfy the
requirements of a written demand for payment. Any written demand for payment
should be mailed or delivered to:
 
    Rubbermaid Incorporated
    1147 Akron Road
    Wooster, Ohio 44691
    Attention: Corporate Secretary
 
Because the written demand must be delivered to Rubbermaid within the ten-day
period following Rubbermaid's special meeting, it is recommended, although not
required, that a stockholder using the mails should use certified or registered
mail, return receipt requested, to confirm that the stockholder has made a
timely delivery. This joint proxy statement/prospectus and Rubbermaid's
accompanying notice of special meeting will constitute the only notice of the
date of Rubbermaid's special meeting.
 
  If Rubbermaid sends the dissenting stockholder, at the address specified in
his or her demand, a request for the certificate(s) representing his or her
shares, the dissenting stockholder must deliver the certificate(s) to
Rubbermaid within 15 days of the sending of Rubbermaid's request. Rubbermaid
may endorse the certificate(s) with a legend to the effect that the stockholder
has demanded the fair cash value of the shares represented by the
certificate(s). Failure to deliver the certificate(s) within 15 days of the
request terminates the stockholder's rights as a dissenting stockholder.
Rubbermaid must
 
                                       29
 
                                                                      THE MERGER


 
notify the stockholder of its election to terminate the stockholder's rights
as a dissenting stockholder within 20 days after the lapse of the 15 day
period.
 
  Unless the dissenting stockholder and Rubbermaid agree on the fair cash
value per share of the Rubbermaid common stock, the stockholder may, within
three months after the service of the written demand by the stockholder, file
a petition in the Court of Common Pleas of Wayne County, Ohio. If the court
finds that the stockholder is entitled to be paid the fair cash value of
Rubbermaid common stock, the court may appoint one or more appraisers to
receive evidence and to recommend a decision on the amount of the fair cash
value. Fair cash value:
 
  . will be determined as of the day prior to Rubbermaid's special meeting;
 
  . will be the amount a willing seller and willing buyer would accept or pay
    with neither being under compulsion to sell or buy;
 
  . will not exceed the amount specified in the stockholder's written demand;
    and
 
  . will exclude any appreciation or depreciation in market value resulting
    from the merger.
 
The court will make a finding as to the fair cash value of a share of
Rubbermaid common stock and render judgment against Rubbermaid for its payment
with interest at a rate and from a date the court considers equitable. The
costs of proceedings shall be assessed or apportioned as the court considers
equitable.
 
  The rights of any dissenting stockholder will terminate if:
 
  . the dissenting stockholder has not complied with Section 1701.85, unless
    Rubbermaid, by its Board of Directors, waives such failure;
 
  . Rubbermaid abandons or is finally enjoined or prevented from carrying
    out, or the stockholders of Rubbermaid rescind their adoption of, the
    merger agreement;
 
  . the dissenting stockholder withdraws his or her written demand, with the
    consent of Rubbermaid, by its Board of Directors; or
 
  . Rubbermaid and the dissenting stockholder have not agreed upon the fair
   cash value per share of the Rubbermaid common stock and neither has timely
   filed or joined in a petition in an appropriate court for a determination
   of the fair cash value of the Rubbermaid common stock.
 
  For a discussion of the tax consequences to a Rubbermaid stockholder who
exercises dissenters' rights, see "--Material Federal Income Tax
Consequences."
 
  Because a proxy card that does not contain voting instructions will be voted
for adoption of the merger agreement, a Rubbermaid stockholder who wishes to
exercise dissenters' rights must either (1) not sign and return his or her
proxy card or (2) if he or she signs and returns his or her proxy card, check
the appropriate box on the proxy card to either vote against or to abstain
from voting on the adoption of the merger agreement.
 
Federal Securities Laws Consequences; Stock Transfer Restriction Agreements
 
  This joint proxy statement/prospectus does not cover any resales of the
Newell common stock to be received by Rubbermaid stockholders in the merger,
and no person is authorized to make any use of this joint proxy
statement/prospectus in connection with any such resale.
 
  All shares of Newell common stock received by Rubbermaid stockholders in the
merger will be freely transferable, except that shares of Newell common stock
received by persons who are deemed to be "affiliates" of Rubbermaid under the
Securities Act of 1933 at the time of Rubbermaid's special meeting may be
resold by them only in transactions permitted by Rule 145 under the Act or as
 
                                      30
 
THE MERGER


 
otherwise permitted under the Act. Persons who may be affiliates of Rubbermaid
for those purposes generally include individuals or entities that control, are
controlled by, or are under common control with, Rubbermaid, and would not
include stockholders who are not officers, directors or principal stockholders
of Rubbermaid.
 
  The merger agreement requires Rubbermaid to deliver to Newell, at least 30
days prior to the merger, an executed letter agreement from each affiliate to
the effect that that affiliate will not offer, sell or otherwise dispose of any
of the shares of Newell common stock issued to that affiliate in the merger or
otherwise owned or acquired by that affiliate:
 
    (1) for a period beginning 30 days prior to the merger and continuing
  until results covering at least 30 days of post-merger combined operations
  of Newell and Rubbermaid have been publicly filed or announced by Newell,
  except for sales and dispositions that are not expected to adversely affect
  the accounting treatment of the merger as a pooling of interests; or
 
    (2) in violation of the Securities Act of 1933.
 
The merger agreement also requires Newell to deliver to Rubbermaid, at least 30
days prior to the merger, an executed letter agreement from each affiliate of
Newell to the effect that that affiliate will not offer, sell or otherwise
dispose of any shares of Newell common stock owned or acquired by that
affiliate during the period described in, and except to the extent permitted
by, clause (1) of the prior sentence.
 
                                       31
 
                                                                      THE MERGER


 
                        OPINIONS OF FINANCIAL ADVISORS
 
Opinion of Financial Advisor to Newell
 
  Newell retained Baird to act as its financial advisor in connection with the
merger and to render Baird's opinion as to the fairness, from a financial
point of view, of the merger exchange ratio to Newell. On October 20, 1998,
Baird rendered its opinion to the Newell Board to the effect that, as of
October 20, 1998 and based upon and subject to the various considerations
described in the opinion, the merger exchange ratio of 0.7883 was fair, from a
financial point of view, to Newell. Newell and Rubbermaid determined the
merger exchange ratio in arms-length negotiations.
 
  The full text of Baird's opinion, dated October 20, 1998, which describes
the assumptions made, general procedures followed, matters considered and
limitations on the scope of review undertaken by Baird in rendering its
opinion, is attached as Annex C to this joint proxy statement/prospectus and
is incorporated in this document by reference. Baird's opinion is directed
only to the fairness, as of the date of the opinion and from a financial point
of view, of the merger exchange ratio to Newell and does not constitute a
recommendation to any Newell stockholder as to how that stockholder should
vote with respect to the issuance of Newell shares in connection with the
merger. The summary of Baird's opinion set forth below is qualified in its
entirety by reference to the full text of the opinion attached as Annex C.
Newell stockholders are urged to read the opinion carefully in its entirety.
 
  In conducting its investigation and analysis and in arriving at its opinion,
Baird reviewed information and took into account financial and economic
factors it deemed relevant under the circumstances. In that connection, Baird,
among other things:
 
  .  reviewed certain internal information, primarily financial in nature,
     including projections, concerning the business and operations of Newell
     and Rubbermaid furnished to Baird for purposes of its analysis;
 
  .  reviewed publicly available information including but not limited to
     Newell's and Rubbermaid's recent filings with the Securities and
     Exchange Commission and equity analyst research reports prepared by
     various investment banking firms including Baird;
 
  .  reviewed the merger agreement in the form presented to the Newell Board;
 
  .  compared the historical market prices and trading activity of Newell
     common stock and Rubbermaid common stock with those of certain other
     publicly traded companies Baird deemed relevant;
 
  .  compared the financial position and operating results of Newell and
     Rubbermaid with those of certain other publicly traded companies Baird
     deemed relevant;
 
  .  compared the proposed financial terms of the merger with the financial
     terms of certain other business combinations Baird deemed relevant; and
 
  .  reviewed certain potential pro forma effects of the merger on Newell.
 
  Baird held discussions with members of Newell's and Rubbermaid's respective
senior managements concerning Newell's and Rubbermaid's historical and current
financial condition and operating results, as well as the future prospects of
Newell and Rubbermaid on a stand-alone and combined basis. Baird also
considered other information, financial studies, analysis and investigations
and financial, economic and market data which Baird deemed relevant for the
preparation of its opinion. Newell did not place any limitation upon Baird
with respect to the procedures followed or factors considered by Baird in
rendering its opinion.
 
                                      32
 
THE MERGER


 
 
  In arriving at its opinion, Baird assumed and relied upon the accuracy and
completeness of all of the financial and other information that was publicly
available or provided to Baird by or on behalf of Newell and Rubbermaid. Baird
was not engaged to independently verify any of this information. Baird assumed,
with Newell's consent, that:
 
  . all material assets and liabilities, contingent or otherwise, known or
    unknown, of Newell and Rubbermaid are as set forth in their respective
    financial statements;
 
  . the merger will be accounted for under the pooling of interests method;
 
  . the cost savings and operating synergies resulting from the merger will be
    realized as contemplated by Newell's management; and
 
  . the merger will be consummated in accordance with the terms of the merger
    agreement in the form presented to the Newell Board, without any amendment
    and without waiver by Newell or Rubbermaid of any of the conditions to
    their respective obligations under the merger agreement.
 
  Baird also assumed that the projections and other financial forecasts
examined by it, including estimates of cost savings and operating synergies
resulting from the merger developed by Newell's management, were reasonably
prepared on bases reflecting the best available estimates and good faith
judgments of Newell's and Rubbermaid's senior managements as to future
performance of Newell and Rubbermaid. The types of cost savings and operating
synergies are further described under "Recommendation of the Newell Board;
Newell's Reasons for the Merger--Anticipated Operating Income Improvements" in
this joint proxy statement/prospectus. In conducting its review, Baird did not
undertake nor obtain an independent evaluation or appraisal of any of the
assets or liabilities, contingent or otherwise, of Newell or Rubbermaid nor did
it make a physical inspection of the properties or facilities of Newell or
Rubbermaid. Baird's opinion necessarily was based upon economic, monetary and
market conditions as they existed and could be evaluated on the date of its
opinion, and did not predict or take into account any changes which may occur,
or information which may become available, after the date of Baird's opinion.
Furthermore, Baird expressed no opinion as to the price or trading range at
which any of Newell's or Rubbermaid's securities, including, but not limited
to, Newell common stock and Rubbermaid common stock, will trade following the
date of Baird's opinion.
 
  The following is a summary of the material financial analyses performed by
Baird in connection with rendering its opinion. Each of the tables contained in
this "Opinion of Financial Advisor to Newell" section is qualified in its
entirety by reference to the other disclosure contained in this section and to
Baird's opinion attached as Annex C to this joint proxy statement/prospectus.
 
  Analysis of Rubbermaid Implied Merger Multiples. Baird calculated the
"implied equity value per share" reflected by the terms of the merger to be
$37.00 for each share of Rubbermaid common stock. The implied equity value per
share was obtained by multiplying the merger exchange ratio of 0.7883 by the
closing price per share of Newell common stock of $46.94 on October 16, 1998.
Baird calculated the "implied total equity value" and the "implied enterprise
value" of Rubbermaid as a result of the merger to be $5.6 billion and $6.1
billion, respectively. The implied total equity value was obtained by
multiplying the implied equity value per share by the total number of
outstanding shares of Rubbermaid common stock as of September 30, 1998, plus
shares issuable upon exercise of stock options as of August 31, 1998, less net
proceeds from the exercise of those stock options. The implied enterprise value
was obtained by adding Rubbermaid's outstanding total debt to, and subtracting
Rubbermaid's cash and cash equivalents balances (as of October 2, 1998, as
provided by Rubbermaid management) from, the implied total equity value.
 
  In performing its analysis, Baird used, among other items, operating
statistics for Rubbermaid's latest twelve months ended October 2, 1998. Baird
calculated price to earnings ratios by dividing the implied total equity value
by Rubbermaid's net income, including Rubbermaid's latest twelve months' net
income exclusive of non-recurring items, and estimated net income for calendar
year 1998 and
 
                                       33
 
                                                                      THE MERGER


 
   
projected net income for calendar year 1999 (based on Newell management's
estimates and exclusive of non-recurring items). In addition, Baird calculated
Rubbermaid's book value multiple by dividing the implied total equity value by
Rubbermaid's book value at October 2, 1998. Baird also calculated multiples of
Rubbermaid's implied enterprise value to its latest twelve months' net sales,
latest twelve months' earnings before interest, taxes, depreciation,
amortization and non-recurring items ("EBITDA") and latest twelve months'
earnings before interest, taxes and non-recurring items ("EBIT"). The table
below summarizes the results of this analysis:     
 



                                                                     Rubbermaid
                                                                      Implied
                                                                       Merger
                                                                     Multiples
                                                                     ----------
                                                                  
      Implied Enterprise Value to Latest Twelve Months' Net Sales...    2.4x
      Implied Enterprise Value to Latest Twelve Months' EBITDA......   17.0x
      Implied Enterprise Value to Latest Twelve Months' EBIT........   25.7x
      Latest Twelve Months' Price to Earnings Ratio.................   39.0x
      Calendar Year 1998 Price to Earnings Ratio....................   37.3x
      Calendar Year 1999 Price to Earnings Ratio....................   25.0x
      Book Value Multiple...........................................    5.3x


 
  Selected Publicly Traded Rubbermaid Comparable Company Operating
Performance. Baird reviewed certain publicly available financial information
as of the most recently reported period and stock market information as of
October 16, 1998, for eight publicly traded companies that Baird deemed
relevant. These "Rubbermaid comparable companies" consisted of the following
eight branded consumer products companies:
 
  . The Black & Decker Corporation        . The Gillette Company
 
 
  . The Clorox Company                    . Newell Co.
 
 
  . First Brands Corporation              . The Procter & Gamble Company
 
 
  . Fortune Brands, Inc.                  . Tupperware Corporation
 
  Baird compared the operating performance of Rubbermaid to the Rubbermaid
comparable companies with respect to gross profit margins, EBITDA margins,
EBIT margins and net income margins, in each case, for the latest twelve month
period. For Rubbermaid and each of the Rubbermaid comparable companies, Baird
also compared one-year and five-year projected earnings per share growth rates
based on Newell management's estimates and exclusive of non-recurring items
for Rubbermaid, and on First Call consensus estimates for the Rubbermaid
comparable companies. The table below summarizes the results of this analysis:
 



                                                     Rubbermaid Comparable
                                                     Companies Statistics
                                     Rubbermaid -------------------------------
                                     Statistics     Range      Median Mean
                                     ---------- -------------- ------ -----
                                                             
   Latest Twelve Months' Gross
    Profit Margin..................    28.2%    32.3% to 61.9% 52.5%  49.5%
   Latest Twelve Months' EBITDA
    Margin.........................    14.4%    13.8% to 28.5% 18.5%  19.0%
   Latest Twelve Months' EBIT
    Margin.........................     9.5%     8.8% to 24.0% 14.1%  14.6%
   Latest Twelve Months' Net Income
    Margin.........................     5.7%     4.5% to 14.8%  7.1%   8.1%
   Earnings Per Share Growth
    (Calendar 1998-1999)...........    49.1%    10.1% to 23.9% 14.2%  15.4%
   Earnings Per Share Growth
    (Calendar 1998-2003)...........    19.3%    12.0% to 17.0% 15.0%  14.5%


 
  In rendering its opinion, Baird noted that Rubbermaid's latest twelve
months' operating performance statistics were generally within the ranges of
corresponding statistics for the Rubbermaid comparable companies, but at or
near the low end of these ranges. Baird also noted,
 
                                      34
 
THE MERGER


 
however, that Rubbermaid's latest twelve months' operating performance
statistics did not take into account any of the cost savings and operating
synergies contemplated by Newell management to result from the merger. In
addition, Baird noted that the one-year and five-year projected earnings per
share growth rates for Rubbermaid were significantly above the ranges of
corresponding growth rates for the Rubbermaid comparable companies, and that
the projected earnings per share growth rates for Rubbermaid did not include
the Newell-related portion of the cost savings and operating synergies
contemplated by Newell management to result from the merger. See
"Recommendation of the Newell Board; Newell's Reasons for the Merger--
Anticipated Operating Income Improvements."
 
  Analysis of Selected Publicly Traded Rubbermaid Comparable Companies. For
each of the Rubbermaid comparable companies, Baird calculated enterprise value
by multiplying closing stock prices as of October 16, 1998 by the total number
of outstanding shares on a fully diluted basis as of the most recently reported
period, plus outstanding total debt and minus cash and cash equivalents
balances as of the most recently reported period, less net proceeds from the
exercise of outstanding stock options. Baird then calculated multiples as of
October 16, 1998 of enterprise value to net sales, EBITDA and EBIT, in each
case, for the latest twelve month period for each of the Rubbermaid comparable
companies. Baird then compared these multiples to the relevant Rubbermaid
multiples based on the implied equity value per share. For Rubbermaid and each
of the Rubbermaid comparable companies, Baird also calculated price to earnings
ratios and book value multiples based upon:
 
  . the implied total equity value for Rubbermaid;
 
  . closing stock prices as of October 16, 1998 for the Rubbermaid comparable
    companies;
 
  . net income statistics for the latest twelve months and for estimated
    calendar year 1998 and projected calendar year 1999 based on Newell
    management's estimates and exclusive of non-recurring items for
    Rubbermaid, and on First Call consensus estimates for the Rubbermaid
    comparable companies; and
 
  . book value statistics as of October 2, 1998 for Rubbermaid and as of the
    most recently reported period for the Rubbermaid comparable companies.
 
  The table below summarizes the results of this analysis:
 



                                                Rubbermaid Comparable
                                Rubbermaid       Companies Multiples
                              Implied Merger ---------------------------
                                Multiples        Range      Median Mean
                              -------------- -------------- ------ -----
                                                          
     Enterprise Value to
      Latest
      Twelve Months' Net
      Sales..................      2.4x       1.1x to  5.4x  2.0x   2.6x
     Enterprise Value to
      Latest
      Twelve Months' EBITDA..     17.0x       7.6x to 18.8x 11.0x  12.4x
     Enterprise Value to
      Latest
      Twelve Months' EBIT....     25.7x      10.9x to 23.6x 14.0x  16.2x
     Latest Twelve Months'
      Price to Earnings
      Ratio..................     39.0x      16.9x to 35.4x 22.7x  25.1x
     Calendar Year 1998
      Price to Earnings
      Ratio..................     37.3x      14.8x to 35.4x 21.5x  24.0x
     Calendar Year 1999
      Price to Earnings
      Ratio..................     25.0x      11.9x to 31.2x 18.3x  20.9x
     Book Value Multiple.....      5.3x       1.3x to 10.1x  8.2x   6.7x


 
  In rendering its opinion, Baird noted that the Rubbermaid implied merger
multiples and price to earnings ratios were generally within or above the range
of the corresponding multiples and price to earnings ratios of the Rubbermaid
comparable companies. To the extent that a Rubbermaid implied merger multiple
or price to earnings ratio is above the range of corresponding multiples and
price to earnings ratios of the Rubbermaid comparable companies, the
theoretical value of Rubbermaid calculated on the basis of this multiple or
ratio would be below the implied equity value per share. In
 
                                       35
 
                                                                      THE MERGER


 
addition, Baird noted that the Rubbermaid implied merger multiples and price
to earnings ratios were at or above the corresponding mean and median
multiples and price to earnings ratios for the Rubbermaid comparable companies
and that, accordingly, the ranges of Rubbermaid theoretical values calculated
based upon these mean and median multiples were generally below the implied
equity value per share. In this regard, however, Baird noted that the implied
equity value per share was within the ranges of theoretical values calculated
based upon the range of high and low multiples for the Rubbermaid comparable
companies. Baird also noted that, with the exception of the calendar year 1999
price to earnings ratio analysis, this analysis of Rubbermaid comparable
companies did not take into account any of the cost savings and operating
synergies contemplated by Newell management to result from the merger. See
"Recommendation of the Newell Board; Newell's Reasons for the Merger--
Anticipated Operating Income Improvements."
 
  Selected Publicly Traded Newell Comparable Company Operating Performance. In
order to assess the relative public market valuation of Newell common stock to
be used by Newell in exchange for Rubbermaid common stock, Baird reviewed
certain publicly available financial information as of the most recently
reported period and stock market information as of October 16, 1998, for eight
publicly traded companies that Baird deemed relevant. These "Newell comparable
companies" consisted of the following eight branded consumer products
companies:
 
  . The Black & Decker Corporation        . The Gillette Company
 
 
  . The Clorox Company                    . The Procter & Gamble Company
 
 
  . First Brands Corporation              . Rubbermaid Incorporated
 
 
  . Fortune Brands, Inc.                  . Tupperware Corporation
 
  Baird compared the operating performance of Newell to the Newell comparable
companies with respect to gross profit margins, EBITDA margins, EBIT margins
and net income margins, in each case, for the latest twelve month period. The
table below summarizes the results of this analysis:
 



                                                        Newell Comparable
                                                       Companies Statistics
                                           Newell   --------------------------
                                         Statistics     Range      Median Mean
                                         ---------- -------------- ------ ----
                                                              
   Latest Twelve Months' Gross Profit
    Margin.............................     32.7%   27.7% to 61.9%  52.5% 48.9%
   Latest Twelve Months' EBITDA Margin.     20.8%   13.8% to 28.5%  15.7% 18.3%
   Latest Twelve Months' EBIT Margin...     16.7%    8.8% to 24.0%  11.5% 13.7%
   Latest Twelve Months' Net Income
    Margin.............................      8.9%    4.5% to 14.8%   5.6%  7.7%


 
  In rendering its opinion, Baird noted that Newell's latest twelve months'
operating performance statistics were within the range of the corresponding
latest twelve months' operating performance statistics for the Newell
comparable companies. Baird also noted that Newell's latest twelve months'
operating performance statistics were generally above the mean and median of
corresponding latest twelve months' operating performance statistics for the
Newell comparable companies.
 
  Analysis of Selected Publicly Traded Newell Comparable Companies. For each
of the Newell comparable companies, Baird calculated multiples as of October
16, 1998 of enterprise value to net sales, EBITDA and EBIT, in each case, for
the latest twelve month period. Baird then compared these multiples to the
relevant Newell multiples based on Newell's closing share price of $46.94 on
October 16, 1998, and Newell's latest twelve months' operating performance
statistics for the period ended September 30, 1998, as provided by Newell
management.
 
  For Newell and each of the Newell comparable companies, Baird also
calculated price to earnings ratios and book value multiples based on:
 
  . closing stock prices as of October 16, 1998;
 
  . net income statistics for the latest twelve months and for estimated
    calendar year 1998 and projected calendar year 1999 based on Newell
    management's estimates and exclusive of non-
 
                                      36
 
THE MERGER


 
   recurring items for Newell, and on First Call consensus estimates for the
   Newell comparable companies; and
 
  . book value statistics as of September 30, 1998 for Newell and as of the
    most recently reported period for the Newell comparable companies.
 
  The table below summarizes the results of this analysis:
 



                                       Newell Comparable Companies Multiples
                             Newell   ----------------------------------------
                            Multiples      Range      Median   Mean
                            --------- --------------- ----------------
                                                        
   Enterprise Value to
    Latest
    Twelve Months' Net
    Sales..................    2.5x     1.1x to  5.4x   1.6x    2.5x
   Enterprise Value to
    Latest
    Twelve Months' EBITDA..   11.9x     7.6x to 18.8x  10.9x   12.4x
   Enterprise Value to
    Latest
    Twelve Months' EBIT....   14.9x    10.9x to 23.6x  15.7x   16.6x
   Latest Twelve Months'
    Price to Earnings
    Ratio..................   24.5x    16.9x to 35.4x  23.7x   25.4x
   Calendar Year 1998
    Price to Earnings
    Ratio..................   22.9x    14.8x to 35.4x  20.8x   23.8x
   Calendar Year 1999
    Price to Earnings
    Ratio..................   19.9x    11.9x to 31.2x  17.0x   20.6x
   Book Value Multiple.....    3.5x     1.3x to 10.1x   8.2x    6.7x


 
  In rendering its opinion, Baird noted that the Newell multiples and price to
earnings ratios were within the range of the corresponding multiples and price
to earnings ratios for the Newell comparable companies. In addition, Baird
noted that the Newell multiples and price to earnings ratios were generally
approximate to the corresponding mean and median multiples and price to
earnings ratios for the Newell comparable companies.
 
  Analysis of Selected Comparable Acquisition Transactions. Baird reviewed
eleven completed acquisition transactions which Baird deemed relevant. These
transactions were chosen based on a review of acquired companies that possessed
general business, operating and financial characteristics representative of
companies which manufacture and sell branded consumer products. These
"comparable transactions" consisted of the following eleven completed
acquisition transactions (acquiror/acquired company):
 
                                   . The Gillette Company/Duracell
  . Sunbeam Corporation/The          International Inc.
    Coleman Company, Inc.
 
 
                                   . An Affiliate of Kohlberg
  . The Procter & Gamble             Kravis Roberts & Co./Evenflo
    Company/ Tambrands Inc.          & Spalding Holdings
                                     Corporation
 
 
  . An Affiliate of Thomas H.
    Lee Company/Syratech           . Honeywell Inc./Duracraft
    Corporation                      Corp.
 
 
  . Mattel, Inc./Tyco Toys,        . Unilever N.V./Helene Curtis
    Inc.                             Industries, Inc.
 
 
  . The Clorox Company/Armor       . L'Oreal S.A./Maybelline, Inc.
    All Products Corporation
 
                                   . American Brands, Inc./Cobra
                                     Golf Incorporated
 
  Baird noted that none of the comparable transactions was identical to the
merger. Accordingly, Baird noted that the analysis of comparable transactions
necessarily involves complex considerations and judgments concerning
differences in financial and operating characteristics of Rubbermaid and other
factors that would affect the acquisition value of comparable transactions
including, among others, the general market conditions prevailing in the equity
capital markets at the time of that transaction. For each of the comparable
transactions, Baird calculated multiples of enterprise value
 
                                       37
 
                                                                      THE MERGER


 
to net sales, EBITDA and EBIT, in each case, for the latest twelve month
period; calculated price to earnings ratios based on latest twelve months' net
income; and calculated book value multiples based on book value statistics as
of the most recently reported period prior to announcement. Baird then
compared those multiples to the relevant Rubbermaid implied merger multiples.
The table below summarizes the results of this analysis:
 



                                         Rubbermaid   Comparable Transactions
                                          Implied            Multiples
                                           Merger   ---------------------------
                                         Multiples      Range      Median Mean
                                         ---------- -------------- ------ -----
                                                              
   Enterprise Value to
    Latest Twelve Months' Net Sales.....    2.4x     0.7x to  3.7x  1.9x   1.9x
   Enterprise Value to
    Latest Twelve Months' EBITDA........   17.0x     9.2x to 20.4x 14.1x  14.2x
   Enterprise Value to
    Latest Twelve Months' EBIT..........   25.7x    11.0x to 48.6x 17.2x  22.1x
   Latest Twelve Months'
    Price to Earnings Ratio.............   39.0x    19.7x to 92.0x 30.1x  41.0x
   Book Value Multiple..................    5.3x     1.6x to  7.0x  3.3x   4.0x


 
  In rendering its opinion, Baird noted that the Rubbermaid implied merger
multiples and price to earnings ratios were within the range of the
corresponding multiples and price to earnings ratios for the comparable
transactions. In addition, Baird noted that the Rubbermaid implied merger
multiples and price to earnings ratios were at or above the corresponding mean
and median multiples for the comparable transactions and that, accordingly,
the ranges of Rubbermaid theoretical values calculated based upon these mean
and median multiples were generally below the implied equity value per share.
In this regard, however, Baird noted that the implied equity value per share
was within the ranges of theoretical values calculated based upon the range of
high and low multiples for the comparable transactions. In addition, Baird
noted that this analysis of comparable transactions did not take into account
any of the cost savings and operating synergies contemplated by Newell
management to result from the merger. See "Recommendation of the Newell Board;
Newell's Reasons for the Merger--Anticipated Operating Income Improvements."
 
  Baird also calculated the premiums implied by dividing the implied equity
value per share of $37.00 by the closing price of Rubbermaid common stock one
day, seven days, 30 days and 90 days prior to October 19, 1998. Baird then
compared the Rubbermaid implied merger premiums to those derived by comparing
the prices paid for the equity in each of the comparable transactions relative
to the market value of equity one day, seven days, 30 days and 90 days prior
to the announcement date of those transactions. The table below summarizes the
results of this analysis:
 



                                                      Comparable Transactions
                                       Rubbermaid            Premiums
                                     Implied Merger ---------------------------
                                        Premiums         Range      Median Mean
                                     -------------- --------------- ------ ----
                                                               
   One-Day Premium..................      46.5%      8.4% to  78.6%  26.1% 33.1%
   Seven-Day Premium................      66.3%     13.1% to  78.6%  36.4% 44.6%
   30-Day Premium...................      34.5%     12.3% to 120.5%  57.3% 62.7%
   90-Day Premium...................      10.4%      3.6% to 170.3%  31.5% 60.7%


 
  In rendering its opinion, Baird noted that the Rubbermaid premiums were
within the range of the corresponding premiums for the comparable
transactions.
 
  Discounted Cash Flow Analysis. Baird performed a discounted cash flow
analysis of Rubbermaid using projections for calendar 1999 through 2003
developed by Newell management and including the cost savings and operating
synergies relating to Rubbermaid's operations resulting from
 
                                      38
 
THE MERGER


 
the merger as contemplated by Newell's management. In that analysis, Baird
assumed terminal value multiples of 15.0x to 17.0x EBIT in fiscal year 2003 and
discount rates of 9.0% to 11.0%, which represent the estimated weighted average
cost of capital for Rubbermaid. That analysis produced implied per share values
of Rubbermaid common stock ranging from $37.40 to $46.05.
 
  In order to assess the relative public market valuation of Newell common
stock to be used by Newell in exchange for Rubbermaid common stock, Baird
performed a discounted cash flow analysis of Newell, on a stand-alone basis,
using Newell management's projections for calendar 1999 through 2003 without
taking into account any expense increases, cost savings or operating synergies
which may be realized following the merger. In that analysis, Baird assumed
terminal value multiples of 15.0x to 17.0x EBIT in the year 2003 and discount
rates of 9.0% to 11.0%, which represent the estimated weighted average cost of
capital for Newell. That analysis produced implied per share values of Newell
common stock ranging from $42.26 to $57.05.
 
  Contribution Analysis. Baird analyzed Rubbermaid's and Newell's relative
contribution to the combined company with respect to certain measurements,
including net sales, gross profit, EBITDA, EBIT and net income based on
internal estimates developed by Newell management. As a result of the merger,
Rubbermaid's stockholders will own approximately 41% of the post-merger
outstanding Newell common stock, on a diluted basis. This compares to
Rubbermaid's contribution, based on calendar 1995, 1996 and 1997, the latest
twelve month period, estimated calendar year 1998 and projected calendar year
1999 statistics for the combined company, of approximately 38.2% to 48.4% of
net sales, 35.7% to 46.2% of gross profit, 32.5% to 42.5% of EBITDA, 28.4% to
40.1% of EBIT and 29.7% to 41.6% of net income. Baird noted that Rubbermaid
shareholders' post-merger stock ownership will be generally within the range of
Rubbermaid's relative contribution to the combined company based upon sales and
profits.
 
  Pro Forma Merger Analysis. Baird prepared a pro forma analysis of the
financial impact of the merger. In conducting its analysis, Baird assumed,
among other things:
 
  .pooling of interests accounting treatment;
 
  .a merger exchange ratio of 0.7883;
 
  .estimates of cost savings and operating synergies resulting from the
   merger, as provided by Newell's management; and
 
  .projected earnings estimates for Rubbermaid and Newell, as provided by
   Newell's management.
 
  Baird compared the earnings per share of Newell common stock, on a stand-
alone basis, to the earnings per share of the common stock of the combined
company on a calendar pro forma basis. The results of the pro forma merger
analysis suggested that the merger would be dilutive to Newell on an earnings
per share basis in calendar 1999 and accretive to Newell on an earnings per
share basis in calendar 2000, assuming in each year cost savings and operating
synergies anticipated by Newell management to result from the merger were
achieved and excluding non-recurring charges. The results of the pro forma
merger analysis are not necessarily indicative of future operating results or
financial position. The actual results achieved by the combined company may
vary from projected results and the variations may be material.
 
  Implied Exchange Ratio Analysis. Baird performed an analysis of the
historical trading ratio between Rubbermaid common stock and Newell common
stock based on the closing market price per share of Rubbermaid common stock
relative to the closing market price per share of Newell common stock on
October 16, 1998 and during the periods of 30 days, 90 days, six months, one
year and two years prior to October 19, 1998. This analysis yielded a trading
ratio of 0.5379 on October 16, 1998 and
 
                                       39
 
                                                                      THE MERGER


 
average historical trading ratios of 0.5390 over the 30-day period, 0.5991
over the 90-day period, 0.6166 over the six-month period, 0.6128 over the one-
year period and 0.6580 over the two-year period, compared with the merger
exchange ratio of 0.7883.
 
  The foregoing summary does not purport to be a complete description of the
analyses performed by Baird. The preparation of a fairness opinion is a
complex process and is not susceptible to partial analyses or summary
description. Baird believes that its analyses must be considered as a whole,
and that selecting portions of those analyses without considering all analyses
and factors, would create an incomplete view of the processes underlying its
opinion. Baird did not attempt to assign specific weights to particular
analyses. Any estimates contained in Baird's analyses are not necessarily
indicative of actual values, which may be significantly more or less favorable
than as set forth in Baird's analysis. Estimates of values of companies do not
purport to be appraisals or necessarily to reflect the prices at which
companies may actually be sold. Because these estimates are inherently subject
to uncertainty, Baird does not assume responsibility for their accuracy.
 
  Baird, as part of its investment banking business, is engaged in the
evaluation of businesses and their securities in connection with mergers and
acquisitions, negotiated underwritings, competitive biddings, secondary
distributions of listed and unlisted securities, private placements, and
valuations for estate, corporate and other purposes. Newell retained Baird
because of its experience and expertise in the valuation of businesses and
their securities in connection with mergers and acquisitions. In the ordinary
course of business, Baird may from time to time trade equity securities of
Newell and Rubbermaid for its own account and for accounts of its customers
and, accordingly, may at any time hold a long or short position in these
securities.
 
  Pursuant to an engagement letter dated October 1, 1998 between Newell and
Baird, Newell agreed to pay Baird a fee of $1.0 million, payable upon delivery
of its opinion, regardless of the conclusions reached by Baird in its opinion
and a transaction fee, payable upon consummation of the merger, equal to $9.0
million. In the engagement letter, which was negotiated between Newell and
Baird, Newell has also agreed to reimburse Baird for its reasonable out-of-
pocket expenses. Newell has also agreed to indemnify Baird, its affiliates and
their respective directors, officers, partners, employees, agents and
controlling person against certain liabilities relating to or arising out of
its engagement, including liabilities under the federal securities laws. In
the past, Baird has provided financial advisory services to Newell in
connection with various acquisitions and divestitures, and served as a co-
manager in Newell's Convertible Quarterly Income Preferred Securities. Since
January 1, 1997, Baird received aggregate compensation of approximately $7.0
million for these services. Baird may provide investment banking services to
Newell and its subsidiaries in the future.
 
Opinion of Financial Advisor to Rubbermaid
 
  On October 19, 1998, Goldman Sachs delivered its oral opinion (which was
subsequently confirmed in writing as of October 20, 1998) to the Rubbermaid
Board to the effect that, as of the date of that opinion and based upon and
subject to the various considerations set forth in that opinion, the merger
exchange ratio of 0.7883 was fair, from a financial point of view, to holders
of Rubbermaid common stock.
 
  The full text of the opinion of Goldman Sachs, dated as of October 20, 1998,
which sets forth the assumptions made, procedures followed and matters
considered in, and the limitations on, the review undertaken in connection
with its opinion, is attached as Annex D and incorporated in this document by
reference. The summary of the opinion set forth below is qualified in its
entirety by reference to the full text of the opinion. Goldman Sachs' advisory
services and its opinion were provided for the information and assistance of
the Rubbermaid Board in connection with its consideration of the transaction
contemplated by the merger agreement and the opinion does not constitute a
recommendation as to how holders of Rubbermaid common stock should vote with
respect to the transaction.
 
                                      40
 
THE MERGER


 
 
  In connection with its opinion, Goldman Sachs reviewed, among other things:
the merger agreement; Annual Reports to Stockholders and Annual Reports on Form
10-K of Rubbermaid and Newell for the five years ended December 31, 1997;
certain interim reports to stockholders and Quarterly Reports on Form 10-Q of
Rubbermaid and Newell; certain other communications from Rubbermaid and Newell
to their respective stockholders; certain internal financial analyses and
forecasts for Rubbermaid and Newell prepared by the management of Rubbermaid,
including certain projected cost savings and operating synergies expected to
result from the transaction contemplated by the merger agreement; and certain
internal financial analyses and forecasts for Newell prepared by the management
of Newell. Goldman Sachs also held discussions with members of the senior
managements of Rubbermaid and Newell regarding the strategic rationale for, and
the potential benefits of, the transaction contemplated by the merger agreement
and the past and current business operations, financial condition and future
prospects of Rubbermaid and Newell, respectively. In addition, Goldman Sachs
reviewed the reported price and trading activity for shares of Rubbermaid
common stock and shares of Newell common stock, compared certain financial and
stock market information for Rubbermaid and Newell with similar information for
certain other companies the securities of which are publicly traded, reviewed
the financial terms of certain recent business combinations in the consumer
products industry specifically and in other industries generally and performed
such other studies and analyses as it considered appropriate.
 
  Goldman Sachs relied upon the accuracy and completeness of all the financial
and other information reviewed by Goldman Sachs and assumed this accuracy and
completeness for purposes of rendering its opinion. In that regard, Goldman
Sachs assumed, with the consent of Rubbermaid, that the internal financial
forecasts prepared by the managements of Rubbermaid and Newell, and the
synergies expected to result from the merger were reasonably prepared on a
basis reflecting the best currently available estimates and judgments of
Rubbermaid and Newell, as the case may be. In addition, Goldman Sachs did not
make an independent evaluation or appraisal of the assets and liabilities of
Rubbermaid or Newell or any of their subsidiaries and Goldman Sachs was not
furnished with any such evaluation or appraisal. Goldman Sachs assumed, with
Rubbermaid's consent, that the transaction contemplated by the merger agreement
will be accounted for as a pooling-of-interests under generally accepted
accounting principles.
 
  The following is a summary of all material financial analyses reviewed by
Goldman Sachs with the Rubbermaid Board on October 19, 1998 in connection with
providing its opinion.
 
  Historical Stock Trading Analysis. Goldman Sachs reviewed the stock price and
trading volume of Rubbermaid common stock and Newell common stock for the ten
year period ended September 30, 1998 and for the one year period ended October
16, 1998, as well as the price to earnings per share ratio history of
Rubbermaid and Newell for the five year period ended September 30, 1998.
Goldman Sachs also reviewed the indexed stock price of Rubbermaid common stock,
Newell common stock, the S&P 500 and a composite of five companies in the
consumer products industry for the same two periods. The "five comparison
companies" in the composite consisted of The Black & Decker Corporation,
Fortune Brands, Inc., The Gillette Company, Premark lnternational, Inc. and
Tupperware Corporation.
 
  In connection with its historical stock trading analysis, Goldman Sachs noted
that for the one year and three year periods ended October 16, 1998, the common
stock of Rubbermaid and Newell had the following weighted average trading
prices:
 



                                       One Year               Three Years
                               ------------------------ ------------------------
                               (ended October 16, 1998) (ended October 16, 1998)
                                                  
      Rubbermaid..............          $28.11                   $26.62
      Newell..................          $45.81                   $37.19


 
  Review of Summary Financial Information. Goldman Sachs reviewed certain
historical financial information for Rubbermaid for the years ended December
31, 1994 through 1997, for the
 
                                       41
 
                                                                      THE MERGER


 
twelve month period ended September 30, 1998 and the "Rubbermaid estimates,"
which consisted of estimates for Rubbermaid for the years ended December 31,
1998 through 2001, provided by Rubbermaid management. Goldman Sachs also
reviewed certain historical financial information for Newell for the years
ended December 31, 1994 through 1997, for the twelve month period ended August
31, 1998 and the "Newell estimates," which consisted of estimates for Newell
for the years ended December 31, 1998 through 1999, provided by Newell
management, and estimates for Newell for the years ended December 31, 2000
through 2001, prepared by Rubbermaid management.
 
  Publicly Traded Company Analysis. Goldman Sachs reviewed and compared
certain financial information relating to Rubbermaid and Newell to
corresponding financial information, ratios and public market multiples of the
five comparison companies. Goldman Sachs' analyses, the order of which does
not necessarily reflect their relative significance, indicated that:
 
 . enterprise value as a multiple of estimated 1998 net sales, as reported in
  publicly available equity research, ranged from 0.8x to 5.1x, with a median
  of 1.2x and a mean of 2.0x, for the five comparison companies, compared to
  1.7x for Rubbermaid and 2.3x for Newell;
 
 . EBIT, excluding extraordinary and one-time charges/gains, as reported in
  publicly available equity research, ranged from 8.8x to 20.5x, with a median
  of 11.7x and a mean of 12.6x, for the five comparison companies, compared to
  14.2x for Rubbermaid and 15.5x for Newell;
 
 . based on estimates provided by the Institutional Broker Estimate System as
  of October 16, 1998, 1998 price to earnings multiples ranged from 14.2x to
  35.1x, with a median of 17.6x and a mean of 20.3x, for the five comparison
  companies, compared to 21.6x for Rubbermaid and 22.6x for Newell;
 
 . based on the Institutional Broker Estimate System's estimates as of October
  16, 1998, 1999 price to earnings multiples ranged from 11.3x to 29.8x, with
  a median of 15.5x and a mean of 17.1x, for the five comparison companies,
  compared to 17.7x for Rubbermaid and 19.7x for Newell;
 
 . the Institutional Broker Estimate System's estimated five-year projected
  earnings per share growth rates ranged from 12% to 17%, with a median of 13%
  and a mean of 14%, for the five comparison companies, compared to 13% for
  Rubbermaid and 15% for Newell; and
 
 . the ratios of 1998 price to earnings multiples to the Institutional Broker
  Estimate System's five-year projected earnings per share growth rates ranged
  from 1.1x to 2.1x, with a median of 1.3x and a mean of 1.5x, for the five
  comparison companies, compared to l.7x for Rubbermaid and 1.5x for Newell.
 
  Potential Future Stock Price Analysis. Using a range of current year price
to earnings ratios of 16.0x to 22.0x and the Rubbermaid estimates for earnings
per share, Goldman Sachs calculated a range of potential future stock prices
for Rubbermaid on a stand-alone basis for the period 1998 through 2001, which
ranged from $16 to $43 per share. Using the same range of price to earnings
ratios and earnings per share estimates and a discount rate of 12%, Goldman
Sachs calculated the present values of these potential future stock prices for
Rubbermaid, which ranged from $16 to $31 per share.
 
  Discounted Cash Flow Analysis. Based on the Rubbermaid estimates, Goldman
Sachs performed a discounted cash flow analysis of Rubbermaid on a stand-alone
basis. Using a range of discount rates of 9.0% to 13.0%, based on an estimated
weighted average cost of capital for Rubbermaid, and multiples of 2003 EBIT of
11.0x to 15.0x, Goldman Sachs calculated the net present value of the
estimated future cash flows of Rubbermaid as of December 31, 1998. Based on
these parameters, Goldman Sachs calculated the enterprise value of Rubbermaid
to range from $4.1 billion to $6.4 billion and its per share equity value to
range from $24.37 to $39.12.
 
  In addition, based on the Newell estimates, Goldman Sachs performed a
discounted cash flow analysis of Newell on a stand-alone basis. Using a range
of discount rates of 9.0% to 13.0%, based on an estimated weighted average
cost of capital for Newell, and multiples of 2003 EBIT of 13.0x to 17.0x,
Goldman Sachs calculated the net present value of the estimated future cash
flows of Newell as of December 31, 1998. Based on these parameters, Goldman
Sachs calculated the enterprise value of
 
                                      42
 
THE MERGER


 
Newell to range from $8.6 billion to $13.7 billion and its per share equity
value to range from $45.08 to $76.59.
 
  Comparison of Selected Transactions. Goldman Sachs reviewed certain publicly
available information relating to 55 selected transactions in the consumer
products industry from 1983 to 1998 ranging in levered consideration from $24
million to $7 billion. This analysis indicated that for those selected
transactions, with certain data points not being publicly available, levered
consideration as a multiple of the latest twelve months' sales, EBITDA and EBIT
were as follows:
 



                                                                   Selected
                                                                 Transactions
                                                               Multiple of the
                                                                Latest Twelve
                                                                   Months':
                                                              ------------------
                                                              Sales EBITDA EBIT
                                                              ----- ------ -----
                                                                  
Low.......................................................... 0.3x   4.7x   5.8x
High......................................................... 4.1x  69.6x  26.6x
Median....................................................... 1.1x   8.7x  13.6x
Mean......................................................... 1.3x  12.8x  13.7x


 
  Goldman Sachs also calculated similar multiples implied by the merger based
on a price per share of Newell common stock of $46.94, the closing price on the
New York Stock Exchange on October 16, 1998, the corresponding implied value of
$37.00 per share of Rubbermaid common stock, applying the merger exchange
ratio, and the Rubbermaid estimates. See "Comparative Per Share Market Price
and Dividend Information" for more recent closing price information. Based on
the foregoing, Goldman Sachs noted that the implied levered consideration as a
multiple of Rubbermaid's 1998 estimated sales, EBITDA and EBIT were as follows:
 
              Rubbermaid 1998 Implied Merger Multiple:
              ----------------------------------------
 



              Sales            EBITDA           EBIT
              -----            ------           ----
                                          
              2.4x             15.0x            22.3x


 
  On the same basis, Goldman Sachs also noted that the implied equity value as
a multiple of book value, as of August 31, 1998, and 1998 estimated earnings
per share were 5.3x and 36.8x, respectively.
 
  Review of Implied Transaction Premiums. Goldman Sachs reviewed certain
implied transaction premiums for Rubbermaid based on the merger exchange ratio.
Goldman Sachs noted that, based on a price per share of Newell common stock of
$46.94, the closing price on October 16, 1998, and a corresponding implied
value of $37.00 per share of Rubbermaid common stock, applying the merger
exchange ratio, the implied premiums per share of Rubbermaid common stock
resulting from the merger were 47%, 32%, 5% and 66%, as compared with the
closing price of Rubbermaid common stock of $25.25 on October 16, 1998, the
weighted average trading price of $28.11 for the one year period ended October
16, 1998, the 52-week high price of $35.13, and the 52-week low price of
$22.25, respectively.
 
  Exchange Ratio Analysis. Goldman Sachs reviewed the exchange ratio history
for the five-year period ending September 30, 1998 and calculated the implied
historical exchange ratios of Rubbermaid common stock and Newell common stock
for the periods set forth below based on the closing share prices and weighted
averages as of or through October 16, 1998.
 



                                                                        Implied
                                                                        Exchange
      Period                                                             Ratio
      ------                                                            --------
                                                                     
      October 16, 1998.................................................  0.538
      One week ended October 16, 1998..................................  0.511
      One month ended October 16, 1998.................................  0.515
      Three months ended October 16, 1998..............................  0.563
      Six months ended October 16, 1998................................  0.614
      Nine months ended October 16, 1998...............................  0.610
      One year ended October 16, 1998..................................  0.614
      Three years ended October 16, 1998...............................  0.716


 
 
                                       43
 
                                                                      THE MERGER


 
  Pro Forma Ownership and Contribution Analysis. Goldman Sachs noted that,
based on the merger exchange ratio and including outstanding stock options
according to the treasury method, existing shareholders of Rubbermaid would
own approximately 40.5% of the combined company and existing shareholders of
Newell would own approximately 59.5% of the combined company.
 
  Goldman Sachs reviewed certain historical and estimated future operating and
financial information including, among other things, sales, EBITDA, EBIT, and
net income for Rubbermaid, Newell and the pro forma combined company resulting
from the merger, based on publicly available information, the Rubbermaid
estimates and the Newell estimates. Goldman Sachs also analyzed the relative
income statement and balance sheet contribution of Rubbermaid and Newell to
the combined company on a pro forma basis. These analyses, the order of which
does not necessarily reflect their relative significance, indicated the
following contribution by Rubbermaid to the combined company for the following
periods:
 



                                                                Rubbermaid's
                                                                Contribution
                                                                 to Combined
                                                                   Company
                                                                --------------
                                                                 1998    1999
                                                                ------  ------
                                                                  
      Sales....................................................   40.5%   38.9%
      EBITDA...................................................   34.4%   35.2%
      EBIT.....................................................   30.3%   34.1%
      Net Income...............................................   35.1%   34.8%
      Net Income (Based on the Institutional Broker Estimate
       System's Estimates).....................................   34.2%   36.7%


 
  Pro Forma Merger Analysis. Goldman Sachs prepared pro forma analyses of the
financial impact of the merger on an earnings per share basis to the holders
of Newell common stock based on the merger exchange ratio. In addition to the
Rubbermaid estimates and the Newell estimates, two sets of assumptions were
used in the analyses, each of which was provided by Rubbermaid management,
regarding the synergies resulting from the merger. The first set of
assumptions, the "base case synergy estimates," assumed that the combined
company would realize synergies of $75 million, $150 million and $250 million
in 1999, 2000 and 2001, respectively. The second set of assumptions, the
"upside case synergy estimates," assumed that the combined company would
realize synergies of $100 million, $200 million and $300 million in 1999, 2000
and 2001, respectively.
 
  Goldman Sachs analyses indicated that:
 
    (1) in 1999, the merger would be dilutive to Newell's earnings per share
  under both the base case synergy estimates and the upside case synergy
  estimates; and
 
    (2) in 2000 and 2001, the merger would be accretive to Newell's under
  both the base case synergy estimates and the upside case synergy estimates.
 
  Illustrative Future Market Trading Prices Analysis. Goldman Sachs calculated
potential market trading prices for the common stock of the combined company
and the implied per share value to holders of Rubbermaid common stock. Goldman
Sachs multiplied potential price to earnings multiples for the combined
company ranging from 21.0x to 25.0x by the estimated earnings per share for
the combined company, which was calculated based upon the Rubbermaid
estimates, the Newell estimates and the merger exchange ratio. These analyses
were performed for the years 1999 to 2001 under the two synergy cases referred
to above. Goldman Sachs noted that, under the base case synergy estimates, the
potential future stock prices for the combined company ranged from $48.05 to
$83.41 and the implied value per share to holders of Rubbermaid common stock
ranged from $37.88 to $65.75. Goldman Sachs also noted that, under the upside
case synergy estimates, the potential future stock prices for the combined
company ranged from $49.15 to $86.01 and the implied value per share to
holders of Rubbermaid common stock ranged from $38.74 to $67.81. Goldman Sachs
also calculated
 
                                      44
 
THE MERGER


 
the present value of these potential future stock prices based on a discount
rate of 12%. Under the base case synergy estimates, the analyses resulted in a
range of present values of the potential future stock prices for the combined
company of $42.90 to $59.37, and an implied value per share to holders of
Rubbermaid common stock of $33.82 to $46.80. Under the upside case synergy
estimates, the analyses resulted in a range of present values of the potential
future stock prices for the combined company of $43.88 to $61.22 and an implied
value per share to holders of Rubbermaid common stock of $34.59 to $48.26.
 
  The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. Selecting
portions of the analyses or the summary set forth above, without considering
the analyses as a whole, could create an incomplete view of the processes
underlying the opinion of Goldman Sachs. In arriving at its fairness opinion,
Goldman Sachs considered the results of all these analyses and did not
attribute any particular weight to any analysis or factor considered by it;
rather Goldman Sachs made its determination as to fairness on the basis of its
experience and professional judgment, after considering the results of all
these analyses. No company or transaction used in the above analyses as a
comparison is identical to Rubbermaid, Newell or the combined company. The
analyses were prepared solely for the purpose of Goldman Sachs providing its
opinion to the Rubbermaid Board and do not purport to be appraisals or
necessarily reflect the prices at which businesses or securities actually may
be sold. Analyses based upon forecasts of future results are not necessarily
indicative of actual future results, which may be significantly more or less
favorable than suggested by these analyses. Because these analyses are
inherently subject to uncertainty, being based upon numerous factors or events
beyond the control of the parties or their respective advisors, none of
Rubbermaid, Newell and Goldman Sachs or any other person assumes responsibility
if future results are materially different from those forecasted. See "Forward-
Looking Statements May Prove Inaccurate." As described above, Goldman Sachs'
opinion to the Rubbermaid Board was one of many factors taken into
consideration by the Rubbermaid Board in making its determination to approve
the merger agreement.
 
  Goldman Sachs, as part of its investment banking business, is continually
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placement
and valuations for estate, corporate and other purposes. Goldman Sachs is
familiar with Rubbermaid having provided certain investment banking services to
Rubbermaid from time to time, including having acted as its financial advisor
in connection with the sale of Rubbermaid's office products business in June
1997 and the acquisition of Curver Consumer Products in November 1997 for which
it received aggregate consideration of approximately $5.2 million. Goldman
Sachs also acted as Rubbermaid's financial advisor in connection with, and
participated in certain of the negotiations leading to, the merger agreement.
In addition, Goldman Sachs has provided certain investment banking services to
Newell from time to time, including having acted as lead manager in the
offering of $500 million of 5.25% Convertible Quarterly Income Preferred
Securities in December 1997 for which it received underwriting commissions of
$6.1 million. Goldman Sachs may provide investment banking services to Newell
and its subsidiaries in the future.
 
  Pursuant to a letter agreement dated September 28, 1998, Rubbermaid engaged
Goldman Sachs to act as its financial advisor in connection with the merger.
Pursuant to the terms of that letter agreement, which was negotiated by
Rubbermaid and Goldman Sachs, Rubbermaid has agreed to pay Goldman Sachs a
transaction fee, upon consummation of the merger, of (1) 0.33% of the aggregate
consideration paid in the merger, including any amounts for outstanding
indebtedness for borrowed money, plus (2) an additional 0.37% for any portion
of the aggregate consideration paid in the transaction as a result of the per
share amount being in excess of $40 per share for Rubbermaid's outstanding
common stock, on a fully-diluted basis, but only for the amount in excess of
$40 per share. For purposes of determining aggregate consideration, the value
of the Newell common stock to be
 
                                       45
 
                                                                      THE MERGER


 
received in the merger will be based upon the average of the last sales prices
for Newell common stock on the five trading days ending prior to the
consummation of the merger. Based on a closing sales price of $41.25 of Newell
common stock on December 31, 1998 and Rubbermaid's outstanding indebtedness,
Goldman Sachs' transaction fee would equal approximately $17.7 million. In
addition, under certain circumstances, Goldman Sachs will be entitled to 15%
of any termination fees paid to Rubbermaid. Rubbermaid has also agreed to
reimburse Goldman Sachs for its reasonable out-of-pocket expenses including
the fees and disbursements of its attorneys, and to indemnify Goldman Sachs
and certain related persons against certain liabilities, including certain
liabilities under the federal securities laws, arising out of its engagement.
 
                                      46
 
THE MERGER


 
                  MATERIAL PROVISIONS OF THE MERGER AGREEMENT
 
General
 
  This section of the joint proxy statement/prospectus describes all of the
material provisions of the merger agreement. A copy of the merger agreement is
attached as Annex A to this document. We encourage you to read the merger
agreement because it is the legal document that governs the merger.
 
Closing; Effective Time
 
  The closing of the merger will take place at 10:00 a.m. on a date which will
be no later than the second business day after satisfaction or waiver of the
conditions set forth in the merger agreement, unless another time or date is
agreed to by Newell and Rubbermaid.
 
  Subject to the provisions of the merger agreement, as soon as practicable on
or after the date of the merger, Newell and Rubbermaid will file a Certificate
of Merger and other appropriate documents with the Secretary of State of Ohio
in accordance with the relevant provisions of Ohio law. The merger will become
effective when the Certificate of Merger is filed with the Secretary of State
of Ohio, or at such later time as Newell and Rubbermaid specify in the
Certificate of Merger.
 
Directors and Officers of Rubbermaid after the Merger
 
  Under the merger agreement, the directors of Newell's merger subsidiary
immediately prior to the merger will be the initial directors of Rubbermaid at
and after the merger, and the officers of Rubbermaid immediately prior to the
merger will be the initial officers of Rubbermaid at and after the merger.
 
Consideration to be Received in the Merger
 
  Conversion of Rubbermaid common stock. At the time of and by virtue of the
merger, and without any action on the part of any stockholder of either
Rubbermaid or Newell's merger subsidiary, each issued and outstanding share of
Rubbermaid common stock will be converted into the right to receive 0.7883 of a
validly issued, fully paid and nonassessable share of Newell common stock.
Shares of Rubbermaid common stock to be canceled as described below and shares
that are owned by dissenting stockholders that have properly exercised
appraisal rights pursuant to Section 1701.85 of the Ohio law will not be
converted into shares of Newell common stock in the merger.
 
  Any share of Rubbermaid common stock owned by Newell or Newell's merger
subsidiary or held by Rubbermaid as treasury stock will be automatically
canceled and retired in the merger and will cease to exist, and no securities
of Newell or other consideration will be delivered in exchange for those
shares.
 
  At the completion of the merger, all shares of Rubbermaid common stock will
no longer be outstanding, will automatically be canceled and retired and will
cease to exist. Each holder of shares of Rubbermaid common stock will cease to
have any rights with respect to those shares, except the right to receive the
shares of Newell common stock and cash, if any, in lieu of fractional shares of
Newell common stock, in accordance with the terms of the merger agreement.
 
  At the completion of the merger, each share of common stock of Newell's
merger subsidiary issued and outstanding immediately prior to the merger will
be converted into one share of Rubbermaid common stock.
 
                                       47
 
                                     MATERIAL PROVISIONS OF THE MERGER AGREEMENT


 
  Dissenters' Shares. No dissenting stockholder will be entitled to any shares
of Newell common stock or cash in lieu of fractional shares or other
distributions unless and until the dissenting stockholder fails to perfect or
otherwise effectively withdraws or loses its dissenters' rights under Ohio law.
Shares of Rubbermaid common stock in respect of which dissenters' rights have
been exercised shall be treated in accordance with Section 1701.85 of the Ohio
law. If any person who otherwise would be deemed a dissenting stockholder fails
to properly perfect or has effectively withdrawn or lost the right to dissent
with respect to any shares of Rubbermaid common stock, those shares will be
treated as though they had been converted at the time of the merger into the
right to receive shares of Newell common stock and cash, if any, in lieu of
fractional shares of Newell common stock. See also "The Merger--Appraisal and
Dissenters' Rights."
 
Conversion of Shares; Procedures for Surrender of Certificates;
 Book-Entry Registration; Fractional Shares
 
  The conversion of Rubbermaid common stock into the right to receive Newell
common stock will occur automatically at the effective time of the merger. As
soon as practicable after the effective time of the merger, First Chicago Trust
Company of New York, Newell's Exchange Agent for the merger, will send a
transmittal letter to each former Rubbermaid stockholder. The transmittal
letter will contain instructions with respect to the surrender by Rubbermaid
stockholders of their Rubbermaid stock certificates. Rubbermaid stockholders
and Newell stockholders should not return stock certificates with the enclosed
proxy. Unless they request that a physical stock certificate representing their
Newell shares be mailed to them, Rubbermaid stockholders will not be sent stock
certificates representing the shares of Newell common stock to be issued to
them in the merger. Instead, their shares of Newell common stock will be
registered in book-entry form. Book-entry ownership, through the Direct
Registration System, is a form of direct stock ownership. The Exchange Agent
will mail to each Rubbermaid stockholder who properly completes and returns a
letter of transmittal and surrenders his or her Rubbermaid stock certificate an
account statement reflecting that stockholder's ownership of the shares of
Newell common stock issued to that stockholder in the merger. Rubbermaid
stockholders will have the option, after they have received their account
statement, of requesting that a physical stock certificate representing their
Newell shares be mailed to them. Instructions for requesting a stock
certificate will be included with each Rubbermaid stockholder's account
statement. Rubbermaid stockholders may also request that a stock certificate be
issued to them by calling the Exchange Agent toll-free at 1-800-935-9330.
Rubbermaid stockholders will still be the direct owner of their shares of
Newell common stock and will receive all dividends and communications directly
from Newell. The Exchange Agent, which is also Newell's transfer agent, will
periodically mail to Rubbermaid stockholders whose shares of Newell common
stock are registered in book-entry form a statement reflecting the number of
shares owned by those stockholders.
 
  After the merger, each certificate that previously represented shares of
Rubbermaid common stock will represent only the right to receive Newell common
stock into which those Rubbermaid shares were converted in the merger and the
right to receive cash in lieu of fractional shares of Newell common stock as
described below.
 
  Holders of certificates previously representing shares of Rubbermaid common
stock will not be paid dividends or distributions on the Newell common stock
into which their Rubbermaid shares have been converted with a record date after
the merger, and will not be paid cash in lieu of fractional shares of Newell
common stock, until their certificates are surrendered to the Exchange Agent.
When their certificates are surrendered, any unpaid dividends and any cash in
lieu of fractional shares of Newell common stock payable as described below
will be paid without interest.
 
  In the event of a transfer of ownership of Rubbermaid common stock that is
not registered in the records of Rubbermaid's transfer agent, a book-entry may
be made in the name of, or a certificate representing the proper number of
shares of Newell common stock may be issued to, a person other
 
                                       48
 
MATERIAL PROVISIONS OF THE MERGER AGREEMENT


 
than the person in whose name the certificate so surrendered is registered.
However, the certificate must be properly endorsed or otherwise in proper form
for transfer and the person requesting a book-entry or certificate issuance
must either (1) pay any transfer or other taxes required by reason of the
issuance of shares of Newell common stock to a person other than the registered
holder of that certificate or (2) establish to the satisfaction of Newell that
those taxes have been paid or are not applicable.
 
  All shares of Newell common stock issued upon conversion of shares of
Rubbermaid common stock and any cash paid in lieu of fractional shares of
Newell common stock will be deemed to have been issued or paid in full
satisfaction of all rights pertaining to those shares of Rubbermaid common
stock. Newell, however, will still be obligated to pay any dividends or make
any other distributions with a record date prior to the merger that have been
declared or made by Rubbermaid on shares of Rubbermaid common stock on or prior
to the merger and which remain unpaid at the time of the merger.
 
  No fractional share of Newell common stock will be issued to any Rubbermaid
stockholder upon surrender of certificates previously representing Rubbermaid
common stock. Instead, the Exchange Agent will pay to each of those
stockholders an amount in cash equal to the product obtained by multiplying the
fractional share interest to which the holder would otherwise be entitled by
the closing price for a share of Newell common stock on the New York Stock
Exchange Composite Transaction Tape on the date the merger is completed.
 
Representations and Warranties
 
  The merger agreement contains certain mutual representations and warranties
by each of Newell, Newell's merger subsidiary and Rubbermaid relating to, among
other things:
 
  . corporate organization, standing and power;
 
  . subsidiaries;
 
  . capitalization;
 
  . authorization, execution, delivery, performance and enforceability of,
    required consents, approvals, orders and authorizations of governmental
    authorities relating to, and noncontravention of certain agreements as a
    result of, the merger agreement;
 
  . documents filed by each of Newell and Rubbermaid with the Securities and
    Exchange Commission and other regulatory entities, the accuracy of
    information contained in those documents and the absence of undisclosed
    liabilities of each of Newell and Rubbermaid;
 
  . the accuracy of information supplied by each of Newell and Rubbermaid in
    connection with this joint proxy statement/prospectus and Newell's S-4
    registration statement of which this joint proxy statement/prospectus
    forms a part;
 
  . absence of certain material changes or events with respect to each of
    Newell and Rubbermaid since December 31, 1997;
 
  . compliance with applicable laws and litigation;
 
  . absence of changes in benefit plans since February 1, 1998;
 
  . matters relating to the Employee Retirement Income Security Act of 1974;
 
  . tax matters;
 
  . required stockholder votes in connection with the merger;
 
  . satisfaction of certain state takeover statutes;
 
  . treatment of the merger as a pooling of interests for accounting
    purposes;
 
                                       49
 
                                     MATERIAL PROVISIONS OF THE MERGER AGREEMENT


 
  . engagement of and payment of fees to brokers, investment bankers, finders
    and financial advisors in connection with the merger agreement;
 
  . lack of ownership by Newell of Rubbermaid common stock or ownership by
    Rubbermaid of Newell common stock;
 
  . certain material contracts and noncompetition agreements;
 
  . opinions of financial advisors;
 
  . environmental matters; and
 
  . intellectual property matters, including efforts to resolve any "Year
    2000" computer problems.
 
Covenants
 
  Conduct of Business. Pursuant to the merger agreement, Newell and Rubbermaid
have each agreed that, except as permitted or contemplated by the merger
agreement or as consented to by the other party, during the period from the
date of the merger agreement to the effective time of the merger, each party
will, and will cause its subsidiaries to:
 
  . carry on their respective businesses in the ordinary course consistent
    with past practice and in compliance in all material respects with all
    applicable laws and regulations;
 
  . use all reasonable efforts to preserve intact their current business
    organizations, other than internal organizational realignments;
 
  . use all reasonable efforts to keep available the services of their
    current officers and other key employees; and
 
  . preserve their relationships with those persons having business dealings
    with them to the end that their goodwill and ongoing businesses will be
    unimpaired at the time of the merger.
 
  The merger agreement provides that Rubbermaid and its subsidiaries and Newell
and its subsidiaries will not take any action outside of the parameters
specified in the merger agreement relating to the following matters:
 
  . amending its organizational documents;
 
  . issuing, selling or encumbering any shares of capital stock or options to
    acquire any shares of capital stock;
 
  . selling, leasing or encumbering property or assets;
 
  . declaring or paying dividends or recapitalizing or redeeming its capital
    stock;
 
  . making acquisitions; or
 
  . taking any action that would cause the representations and warranties
    regarding absence of certain changes or events in the merger agreement to
    no longer be true.
 
  In addition, Rubbermaid and its subsidiaries have further covenanted that
they will not amend or modify Rubbermaid's Rights Agreement or license or
otherwise dispose of any rights in Rubbermaid's material trademarks.
 
  Coordination of Dividends. Subject to certain accounting requirements
relating to pooling of interests accounting treatment for the merger, Newell
and Rubbermaid will coordinate with the other regarding the declaration and
payment of dividends in respect of the Newell common stock and the Rubbermaid
common stock and the record dates and payment dates relating to those
dividends. Newell's and Rubbermaid's intention in that regard is that no holder
of Newell common stock or Rubbermaid common stock shall receive two dividends,
or fail to receive one dividend, for any single
 
                                       50
 
MATERIAL PROVISIONS OF THE MERGER AGREEMENT


 
calendar quarter with respect to its shares, including shares of Newell common
stock that a holder receives in exchange for shares of Rubbermaid common stock
in the merger.
 
  No Solicitation. The merger agreement provides that Rubbermaid and Newell
will not, and will not authorize or permit any of their officers, directors,
employees or representatives to, directly or indirectly:
 
    (1) solicit, initiate or encourage, or take any other action designed to
  facilitate, any inquiries or the making of any takeover proposal, which is
  defined below; or
 
    (2) participate in any discussions or negotiations regarding any takeover
  proposal.
 
However, if either Board determines in good faith, after consultation with
outside counsel, that it is necessary to do so in order to act in a manner
consistent with its fiduciary duties to its stockholders under applicable law,
Rubbermaid or Newell, as the case may be, in response to a superior proposal,
which is defined on page 52, and subject to providing written notice of its
decision to take such action to the other party and compliance with its
obligation to advise the other party of any request for information or of any
takeover proposal, may:
 
    (1) furnish information with respect to it to any person making a
  superior proposal pursuant to a confidentiality agreement that is no less
  restrictive than the confidentiality agreement between Rubbermaid and
  Newell; and
 
    (2) participate in discussions or negotiations regarding the superior
  proposal.
 
  A "takeover proposal" is any inquiry, proposal or offer from any person
relating to any:
 
  . direct or indirect acquisition or purchase of a business that constitutes
    15% or more of the net revenues, net income or the assets of Rubbermaid
    or Newell, as the case may be, and its subsidiaries, taken as a whole;
 
  . direct or indirect acquisition or purchase of 15% or more of any class of
    equity securities of Rubbermaid or Newell, as the case may be, and its
    subsidiaries whose business constitutes 15% or more of the net revenues,
    net income or assets of Rubbermaid or Newell, as the case may be, and its
    subsidiaries, taken as a whole;
 
  . tender offer or exchange offer that if consummated would result in any
    person beneficially owning 15% or more of any class of any equity
    securities of Rubbermaid or Newell, as the case may be, or any of their
    respective subsidiaries whose business constitutes 15% or more of the net
    revenues, net income or assets of Rubbermaid or Newell, as the case may
    be, and its subsidiaries taken as a whole; or
 
  . merger, consolidation, business combination, recapitalization,
    liquidation, dissolution or similar transaction involving Rubbermaid or
    Newell, as the case may be, or any of their respective subsidiaries whose
    business constitutes 15% or more of the net revenues, net income or
    assets of Newell or Rubbermaid, as the case may be, and its subsidiaries
    taken as a whole.
 
  Except as expressly permitted by the merger agreement, neither the Rubbermaid
Board nor the Newell Board, nor any committee of either Board, will:
 
  . withdraw or modify, or propose publicly to withdraw or modify, in a
    manner adverse to the other party, the approval or recommendation by that
    Board or that committee of the merger or the merger agreement;
 
  . approve or recommend or propose publicly to approve or recommend any
    takeover proposal; or
 
  . cause either Rubbermaid or Newell, as the case may be, to enter into any
    acquisition agreement related to any takeover proposal, including any
    letter of intent, agreement in principle or other similar agreement.
 
However, that Board, to the extent that it determines in good faith, after
consultation with outside counsel, that in light of a superior proposal it is
necessary to do so in order to act in a manner consistent with its fiduciary
duties to its stockholders under applicable law, may terminate the merger
agreement, solely in order to enter into an acquisition agreement with respect
to any superior
 
                                       51
 
                                     MATERIAL PROVISIONS OF THE MERGER AGREEMENT


 
proposal, but only after the third business day following the other party's
receipt of written notice advising it that Board is prepared to accept a
superior proposal and only if, during the three day period, Rubbermaid or
Newell, as the case may be, has negotiated in good faith with the other party
to change the terms of the merger agreement to enable the parties to proceed
with the merger. If the party that receives notice does not agree to change the
terms of the merger agreement, the other party may terminate the merger
agreement and enter into the acquisition agreement relating to the superior
proposal. A "superior proposal" is any proposal made by a third party to
acquire, directly or indirectly, more than 50% of the combined voting power of
the then outstanding shares of either Rubbermaid common stock or Newell common
stock, as the case may be, or all or substantially all the assets of Rubbermaid
or Newell and otherwise on terms which the relevant Board determines in its
good faith judgment, based on the advice of a financial advisor of nationally
recognized reputation, to be more favorable to that company's stockholders than
the Newell-Rubbermaid merger and for which financing, to the extent required,
is then committed or which, in the good faith judgment of the relevant Board,
is reasonably capable of being obtained by that third party. Newell and
Rubbermaid have agreed to immediately advise the other of any request for
information or any takeover proposal and to keep the other informed of the
status of any request for information or any takeover proposal.
 
Additional Agreements
 
  Stock Options, Performance Shares and Restricted Stock. At the time of the
merger, each outstanding employee stock option under Rubbermaid's stock plans,
which include employee incentive and benefit plans, programs and arrangements
and non-employee director plans currently maintained by Rubbermaid, will be
converted into an option to purchase the number of shares of Newell common
stock equal to the merger exchange ratio multiplied by the number of shares of
Rubbermaid common stock which could have been obtained prior to the merger upon
the exercise of that Rubbermaid option. The converted option will have an
exercise price per share equal to the exercise price for each share of
Rubbermaid common stock subject to the converted option divided by the merger
exchange ratio. Upon completion of the merger, Newell will assume the
obligations of Rubbermaid under Rubbermaid's stock plans. The other terms of
each converted option, and the plans under which they were issued, will
continue to apply in accordance with their terms. See "The Merger--Interests of
Certain Persons in the Merger."
 
  At the time of the merger each outstanding award, including restricted stock,
deferred stock and performance shares, under any of Rubbermaid's stock plans,
will be converted into the same instrument of Newell. The awards will be
converted, in each case, only with those adjustments to the terms of the awards
as are necessary to preserve the value inherent in the awards with no
detrimental effects on the holders of the awards. Newell will assume the
obligations of Rubbermaid under those awards. The other terms of each of the
Rubbermaid awards, and the plans or agreements under which they were issued,
will continue to apply in accordance with their terms.
 
  Rubbermaid and Newell have agreed that each of their respective employee
incentive or benefit plans, programs and arrangements and non-employee director
plans will be amended, to the extent necessary, to reflect the transactions
contemplated by the merger agreement, including the conversion of shares of
Rubbermaid common stock held or to be awarded or paid pursuant to their benefit
plans, programs or arrangements into shares of Newell common stock on a basis
consistent with the transactions contemplated by the merger agreement.
Furthermore, Rubbermaid and Newell have agreed to submit the amendments to
these plans, programs and arrangements to their respective stockholders, if
their submission is determined to be necessary by either company's legal
counsel after consultation with one another, although stockholder approval is
not a condition to completing the merger.
 
                                       52
 
MATERIAL PROVISIONS OF THE MERGER AGREEMENT


 
  Newell will reserve for issuance the number of shares of Newell common stock
that will become subject to the benefit plans, programs and arrangements
referred to in the preceding three paragraphs. Newell will also issue or cause
to be issued the appropriate number of shares of Newell common stock pursuant
to those plans, programs and arrangements, upon the exercise or maturation of
rights existing under those plans at the time of the merger. No later than the
effective time of the merger, Newell will prepare and file with the Securities
and Exchange Commission a registration statement registering a number of shares
of Newell common stock issuable under the Rubbermaid awards described above and
upon the exercise of Rubbermaid stock options converted in the merger.
 
  Indemnification and Insurance. Newell will, to the fullest extent legally
permitted, indemnify each person who is now, or has been at any time prior to
the date of the merger agreement, or who becomes prior to the merger, an
officer, director or employee of Rubbermaid or any of its subsidiaries against
any losses, expenses, claims, damages or liabilities:
 
    (1) arising out of acts or omissions occurring at or before the merger
  that are based on or arise out of the fact that that person is or was a
  director, officer or employee of Rubbermaid or any of its subsidiaries or
  served as a fiduciary under or with respect to any Rubbermaid employee
  benefit plan; and
 
    (2) to the extent they are based on or arise out of the transactions
  contemplated by the merger agreement.
 
In addition, from and after the effective time of the merger, directors and
officers of Rubbermaid who become directors or officers of Newell will be
entitled to indemnification under each of Newell's certificate of incorporation
and bylaws, as they may be amended from time to time in accordance with their
terms and applicable law, and to all other indemnity rights and protections as
are afforded to other directors and officers of Newell.
 
  In the event that Newell or any of its successors or assigns:
 
    (1) consolidates with or merges into any other person and is not the
  continuing or surviving corporation or entity of that consolidation or
  merger; or
 
    (2) transfers or conveys all or substantially all of its properties and
  assets to any person;
 
proper provision will be made so that the successors and assigns of Newell
assume the obligations described under this section.
 
  For six years after the merger, Newell will maintain in effect Rubbermaid's
current directors' and officers' liability insurance covering acts or omissions
occurring prior to the merger with respect to those persons who are currently
covered by Rubbermaid's directors' and officers' liability insurance policy on
terms with respect to that coverage and amount no less favorable than those of
Rubbermaid's policy in effect on the date of the merger agreement. However,
Newell may substitute policies of Newell or its subsidiaries containing terms
with respect to coverage and amount no less favorable to those Rubbermaid
directors or officers. Newell will not be required to pay aggregate premiums
for the insurance described in this paragraph in excess of 200% of the
aggregate premiums paid by Rubbermaid in 1998. However, if the annual premiums
of that insurance coverage exceed that amount, Newell will be obligated to
obtain a policy with the best coverage available, in the reasonable judgment of
the Newell Board, for a cost up to but not exceeding that amount. In addition,
for six years after the merger, Newell will maintain in effect Rubbermaid's
current fiduciary liability insurance policies for employees who serve or have
served as fiduciaries under any Rubbermaid benefit plan with coverages and in
amounts no less favorable than those of Rubbermaid's policy in effect on the
date of the merger agreement.
 
  Fees and Expenses. Whether or not the merger is completed, all fees and
expenses incurred in connection with the merger, the merger agreement and the
transactions contemplated by the merger agreement will be paid by the party
incurring those fees or expenses, except that Rubbermaid and Newell will each
pay one-half of the costs of printing and filing Newell's S-4 registration
statement relating to this joint proxy statement/prospectus.
                                     MATERIAL PROVISIONS OF THE MERGER AGREEMENT
 
                                       53


 
  In the event that:
 
    (1) the merger agreement is terminated by Rubbermaid or Newell in order
  to enter into a superior proposal; or
 
    (2) while a takeover proposal has been made for Rubbermaid or Newell and
  not publicly withdrawn, its stockholders fail to adopt, in the case of
  Rubbermaid, the merger agreement, or approve, in the case of Newell, the
  share issuance proposal, and Rubbermaid or Newell, as the case may be,
  terminates the merger agreement and enters into or consummates a takeover
  proposal within 18 months after termination of the merger agreement;
 
the terminating party will, within two days of entering into or consummating
the takeover proposal, pay the non-terminating party a fee equal to $140
million. Solely for purposes of clause (2) in the preceding sentence, takeover
proposal has a meaning in which 35% is substituted for each 15% reference in
the definition of takeover proposal on page 51.
 
  Affiliates. Each of Rubbermaid and Newell has agreed to provide to the other
party not less than 45 days prior to the merger a list of names and addresses
of each person who, in the reasonable judgment of Rubbermaid or Newell, as the
case may be, is an affiliate within the meaning of Rule 145 under the
Securities Act of 1933 or otherwise applicable accounting releases of the
Securities and Exchange Commission with respect to pooling of interests
accounting treatment. Newell and Rubbermaid have also agreed to deliver to each
other not less than 30 days prior to the merger an affiliate letter in the
forms attached as exhibits to the merger agreement, executed by each of their
affiliates. Newell will be entitled to place legends on the certificates
evidencing the Newell common stock to be received by Rubbermaid's affiliates
and to issue appropriate stop transfer instructions to the transfer agent for
the Newell common stock, consistent with the terms of the affiliate letters.
See "The Merger--Federal Securities Law Consequences; Stock Transfer
Restriction Agreements."
 
  New York Stock Exchange Listing. Newell will use its reasonable best efforts
to cause the Newell common stock issuable to the Rubbermaid stockholders in the
merger to be approved for listing on the New York Stock Exchange, subject to
official notice of issuance.
 
  Stockholder Litigation. Newell and Rubbermaid will give the other reasonable
opportunity to participate in the defense of any stockholder litigation against
Newell or Rubbermaid and their respective directors relating to the merger.
 
  Tax Treatment. Newell and Rubbermaid will use reasonable best efforts to
cause the merger to qualify as a reorganization under Section 368(a) of the
Code and to obtain the opinions of counsel referred to in "The Merger--Material
Federal Income Tax Consequences."
 
  Pooling of Interests. Rubbermaid and Newell have each agreed that during the
period between the date of the merger agreement and the effective time of the
merger they will use their reasonable best efforts to cause the merger to be
accounted for as a pooling of interests and will not knowingly take any action
that would cause that accounting treatment not to be obtained.
 
  Standstill Agreements; Confidentiality Agreements. During the period from the
date of the merger agreement through the effective time of the merger, neither
Rubbermaid nor Newell will terminate, amend, modify or waive any provision of
any confidentiality or standstill agreement to which it or any of its
respective subsidiaries is a party, other than:
 
  . a confidentiality agreement, dated October 2, 1998, entered into between
    Rubbermaid and Newell, pursuant to its terms or by written agreement of
    Rubbermaid and Newell;
  . confidentiality agreements under which Rubbermaid or Newell, as the case
    may be, does not provide any confidential information to third parties;
    or
  . standstill agreements that do not relate to the equity securities of
    Rubbermaid or any of its subsidiaries or Newell or any of its
    subsidiaries, as the case may be.
 
During that period, Rubbermaid or Newell, as the case may be, will enforce, to
the fullest extent permitted under applicable law, the provisions of each of
those agreements, including by obtaining injunctions to prevent any violations
of those agreements and to enforce specifically the terms and
 
                                       54
 
MATERIAL PROVISIONS OF THE MERGER AGREEMENT


 
provisions of the agreements in any court of the United States of America or of
any state having jurisdiction.
 
  Employee Benefit Plans. For a period of at least three years after the
merger, Newell will, or will cause Rubbermaid to, provide employees of
Rubbermaid and its subsidiaries with either benefits that are substantially
similar to those provided under Rubbermaid's benefit plans as of the date of
the merger agreement or benefits that are substantially similar to those
provided to similarly situated employees of Newell. Nevertheless, for a period
of at least one year after the merger, Newell will, or will cause Rubbermaid
to, provide to each continuing employee of Rubbermaid:
 
    (1) annual salary compensation in an amount not less than the annual
  salary compensation which that employee was entitled to receive from
  Rubbermaid immediately prior to the merger based on that employee's base
  salary then in effect; and
 
    (2) payments under incentive bonus and profit sharing plans, including
  Rubbermaid's ISP Plan, for the year ending December 31, 1999.
 
  Only for purposes of eligibility to participate, vesting and eligibility for
early retirement under Newell's defined benefit pension plans, employees of
Rubbermaid at the time of the merger will receive credit under any employee
benefit plan, program or arrangement established or maintained by Newell and
made available to those employees for service accrued prior to the merger with
Rubbermaid.
 
  Newell and Rubbermaid Operating Facilities. After the merger and in
connection with the process of integrating Newell's and Rubbermaid's
operations, Newell will conduct a study of all of the operating facilities of
Newell and Rubbermaid in an effort to rationalize Newell's combined operations.
Any decision as part of this process that would have a significantly negative
impact on the communities in which the headquarters of each of Rubbermaid's
Home, Juvenile, Infant and Commercial operating divisions are located must be
approved or ratified by the Newell Board.
 
  Newell Board of Directors. Prior to the merger, Newell's Board will increase
the number of directors comprising the Newell Board at the time of the merger
to 15, consisting of nine persons designated by the Chairman of the Nominating
Committee of the Newell Board and six persons designated by the Chairman of the
Nominating Committee of the Rubbermaid Board and reasonably acceptable to the
Chairman of the Nominating Committee of Newell. Newell will cause these persons
to become directors of Newell. To accomplish this, Newell will obtain the
resignation of two of its directors to permit Rubbermaid's designees to be
elected to the Newell Board. The initial designation of Rubbermaid's director
designees among the three classes of the Newell Board will be as designated by
the Chairman of the Nominating Committee of Newell and reasonably acceptable to
the Chairman of the Nominating Committee of Rubbermaid. If, prior to the
merger, any Rubbermaid director designee shall decline or be unable to serve on
the Newell Board, Rubbermaid shall designate another person to serve in that
person's stead. See "Directors and Executive Officers of Newell after the
Merger."
 
  Following the merger, William P. Sovey will continue to serve as Chairman of
the Newell Board, John J. McDonough will continue to serve as Vice Chairman of
the Newell Board and Chief Executive Officer of Newell, and Wolfgang R. Schmitt
will become a Vice Chairman of the Newell Board, in each case, until the
earlier of their death, resignation or removal or until their respective
successors are elected, as the case may be.
 
Conditions to the Consummation of the Merger
 
  Newell's and Rubbermaid's obligations to effect the merger are subject to the
satisfaction or waiver of various conditions on or before the date on which the
merger is to be effected, which include, in addition to other customary closing
conditions, the following:
                                     MATERIAL PROVISIONS OF THE MERGER AGREEMENT
 
                                       55


 
    (1) the Rubbermaid stockholders having approved the merger agreement and
  the Newell stockholders having approved the share issuance;
 
    (2) all material governmental, regulatory, judicial or administrative
  consents, filings, and notices required of Rubbermaid, Newell or any of
  their subsidiaries to consummate the merger and the other transactions
  contemplated by the merger agreement having been obtained, made or sent, as
  the case may be;
 
    (3) no judgment, order, law or other rule or regulation entered,
  promulgated, enforced or issued by any court or other governmental or
  administrative body of competent jurisdiction or other legal restraint or
  prohibition being in effect:
 
      (a) preventing the completion of the merger;
 
      (b) prohibiting or limiting the ownership or operation by Rubbermaid
    or Newell and their respective subsidiaries of any material portion of
    the business or assets of Rubbermaid or Newell and their respective
    subsidiaries taken as a whole, or compelling Rubbermaid or Newell and
    their respective subsidiaries to dispose of or hold separate any
    material portion of the business or assets of Rubbermaid or Newell and
    their respective subsidiaries, taken as a whole, as a result of the
    merger; or
 
      (c) which otherwise might have a material adverse effect on
    Rubbermaid or Newell, as applicable; provided that Newell and
    Rubbermaid have each used their reasonable best efforts to prevent the
    entry of any restraints described above and to quickly appeal any of
    those restraints that may be entered;
 
    (4) Newell's S-4 registration statement, of which this joint proxy
  statement/prospectus forms a part, having become effective under the
  Securities Act of 1933 and not being the subject of any order, or of any
  proceeding seeking an order, suspending the effectiveness of the
  registration statement;
 
    (5) the shares of Newell's securities to be listed on the New York Stock
  Exchange and which are issuable to Rubbermaid stockholders in the merger,
  having been approved for listing on the New York Stock Exchange, subject to
  official notice of issuance;
 
    (6) each of Newell and Rubbermaid having received a letter of its
  respective independent public accountants, dated the date of the merger,
  stating that the merger will qualify as a pooling of interests transaction;
 
    (7) the number of dissenting shares being less than 9% of the total
  shares of Rubbermaid common stock outstanding on the date of the merger;
  and
 
    (8) the waiting or similar period applicable to the completion of the
  merger under the Hart-Scott-Rodino Act or any applicable foreign antitrust
  laws having terminated or expired.
 
  In addition, each of Newell's and Rubbermaid's obligations to effect the
merger are subject to the satisfaction or waiver of the following additional
conditions:
 
    (1) the representations and warranties made by the other party in the
  merger agreement being true on the date of the merger agreement and being
  true on the date of the merger as if they were made on that date, unless
  they were originally stated to be true as of a specified earlier date, in
  which they must still have been true on that date, unless their failure to
  be true would not have, individually or in the aggregate, a material
  adverse effect on the other party;
 
    (2) the other party to the merger agreement having performed in all
  material respects all obligations required to be performed by it under the
  merger agreement on or before the date of the merger;
 
                                       56
 
MATERIAL PROVISIONS OF THE MERGER AGREEMENT


 
    (3) Newell and Rubbermaid having received from their legal counsel,
  Schiff Hardin & Waite and Jones, Day, Reavis & Pogue, on the date of the
  merger, opinions dated that date, to the effect that the merger will
  constitute a "reorganization" within the meaning of Section 368(a) of the
  Internal Revenue Code and that Newell, Newell's merger subsidiary and
  Rubbermaid will each be a party to the reorganization within the meaning of
  Section 368(b) of the Internal Revenue Code (see "The Merger--Material
  Federal Income Tax Consequences"); and
 
    (4) at any time after the date of the merger agreement no material
  adverse change having occurred relating to the other party, provided, that
  this condition shall no longer be applicable for changes relating to
  Rubbermaid, following the approval of the share issuance by Newell's
  stockholders, or for changes relating to Newell, following the adoption of
  the merger agreement by Rubbermaid's stockholders.
 
  Other than for certain limited exceptions specified in the merger agreement,
"material adverse change" and "material adverse effect" mean, when used in
connection with Newell or Rubbermaid, any change, effect, event, occurrence or
state of facts that is, or would reasonably be expected to be, materially
adverse to the business, financial condition or results of operations of Newell
or Rubbermaid and its subsidiaries taken as a whole, and the terms "material"
and "materially" have correlative meanings.
 
Termination, Amendment and Waiver
 
  The merger agreement may be terminated at any time prior to the completion of
the merger;
 
  . by mutual written consent of Newell and Rubbermaid;
 
  . by either Newell or Rubbermaid:
 
      (1) if the merger has not been completed by June 30, 1999, except
    that the right to terminate the merger agreement will not be available
    to any party whose failure to perform any of its obligations under the
    merger agreement results in the failure of the merger to be completed
    by June 30, 1999;
 
      (2) if the adoption by Rubbermaid stockholders of the merger
    agreement has not been obtained at Rubbermaid's special meeting;
 
      (3) if the approval by Newell stockholders of the share issuance has
    not been obtained at Newell's special meeting; or
 
      (4) if any judgment, order, law or other rule or regulation of any
    court or other governmental or administrative body that has any of the
    effects set forth in clause (3) of "--Conditions to the Consummation of
    the Merger" above is in effect and has become final and nonappealable,
    except that the party seeking to terminate the merger agreement must
    have used reasonable best efforts to prevent and remove it;
 
  . by Newell, if Rubbermaid breaches or fails to perform in any material
    respect any of its representations, warranties, covenants or other
    agreements contained in the merger agreement, and that breach or failure
    to perform would give rise to a material adverse change and is not cured
    within 30 days after written notice of the breach or failure or is
    incapable of being cured by Rubbermaid;
 
  . by Newell, if the Newell Board has entered into an agreement relating to
    a superior proposal or Newell has completed a superior proposal as set
    forth in the first paragraph under "--Covenants--No Solicitation" above,
    except that Newell must have first complied with all of the requirements
    set forth above in all of the paragraphs under "--Covenants--No
    Solicitation" and "--Additional Agreements--Fees and Expenses" above,
    including the payment of the $140 million termination fee to Rubbermaid;
                                     MATERIAL PROVISIONS OF THE MERGER AGREEMENT
 
                                       57


 
  . by Rubbermaid, if Newell has breached or failed to perform in any
    material respect any of its representations, warranties, covenants or
    other agreements contained in the merger agreement, and that breach or
    failure to perform would give rise to a material adverse change and is
    not cured within 30 days after written notice of the breach or failure or
    is incapable of being cured by Newell; or
 
  . by Rubbermaid, if the Rubbermaid Board has entered into an agreement
    relating to a superior proposal or Rubbermaid has completed a superior
    proposal as set forth in the first paragraph under "--Covenants--No
    Solicitation" above, except that Rubbermaid must have first complied with
    all of the requirements set forth above in all of the paragraphs under
    "--Covenants--No Solicitation" and "--Additional Agreements--Fees and
    Expenses" above, including the payment of the $140 million termination
    fee to Newell.
 
  In the event of termination of the merger agreement by either Rubbermaid or
Newell, the merger agreement will become void and have no effect, without any
liability or obligation on the part of Newell or Rubbermaid, other than:
 
  . in connection with any brokerage or advisory fees of any kind incurred by
    either Rubbermaid or Newell;
 
  . the obligation of Rubbermaid and Newell to keep all nonpublic information
    connected with the merger confidential; and
 
  . the agreement between Rubbermaid and Newell to each pay their own fees
    and pay one-half of the costs of Newell's S-4 registration statement
    relating to this joint proxy statement/ prospectus, which provisions will
    survive the termination of the merger agreement.
 
Nothing in the merger agreement, however, will relieve Newell or Rubbermaid
from any liability for any willful and material breach by that party of any of
its representations, warranties, covenants or agreements set forth in the
merger agreement.
 
  Amendment. The merger agreement may be amended by Newell and Rubbermaid at
any time before or after the adoption of the merger agreement by the Rubbermaid
stockholders and the share issuance by the Newell stockholders, except that,
after those approvals, Newell and Rubbermaid may not make any amendment that by
law requires further approval by either Rubbermaid stockholders or Newell
stockholders without the further approval of those stockholders. The merger
agreement may not be amended except by an instrument in writing signed on
behalf of both Newell and Rubbermaid.
 
  Extension; Waiver. At any time prior to the merger, Newell, Newell's merger
subsidiary or Rubbermaid may:
 
  . extend the time for the performance of any of the obligations or other
    acts of the other party;
 
  . waive any inaccuracies in the representations and warranties of the other
    party contained in the merger agreement or in any document delivered
    pursuant to the merger agreement; or
 
  . except for the prohibitions described in the first sentence of the
    immediately preceding paragraph, waive compliance by the other party of
    the agreements or conditions contained in the merger agreement.
 
Any agreement on the part of Newell, Newell's merger subsidiary or Rubbermaid
to any such extension or waiver will be valid only if set forth in an
instrument in writing signed on behalf of that party. The failure of Newell or
Rubbermaid to assert any of its rights under the merger agreement or otherwise
will not constitute a waiver of those rights.
 
                                       58
 
MATERIAL PROVISIONS OF THE MERGER AGREEMENT


 
                              THE SPECIAL MEETINGS
 
Date, Times and Places
   
  Newell. Newell's special meeting will be held at The Northern Trust Company,
50 South LaSalle Street, Chicago, Illinois, at 10:00 a.m., local time, on March
11, 1999.     
   
  Rubbermaid. Rubbermaid's special meeting will be held at BankBoston N.A., 100
Federal Street, Boston, Massachusetts, at 11:00 a.m., local time, on March 11,
1999.     
 
Matters to be Considered at the Special Meetings
 
  Newell. At Newell's special meeting, holders of Newell common stock are being
asked to approve the issuance of Newell shares and the change of Newell's name
in connection with the merger. The completion of the merger is subject to,
among other things, the approval of the share issuance. Approval of name change
is not a condition to completing the merger. See "The Merger" and "Material
Provisions of the Merger Agreement."
 
  Rubbermaid. At Rubbermaid's special meeting, holders of Rubbermaid common
stock are being asked to adopt the merger agreement. See "The Merger" and
"Material Provisions of the Merger Agreement."
 
Record Date; Stock Entitled to Vote; Quorum
   
  Newell. Only holders of record of Newell common stock at the close of
business on February 8, 1999, the record date for Newell's special meeting, are
entitled to notice of and to vote at Newell's special meeting. On the record
date, approximately 162,726,921 shares of Newell common stock were issued and
outstanding and held by approximately 16,390 holders of record. A majority of
the shares of Newell common stock issued and outstanding and entitled to vote
on the record date must be represented in person or by proxy at Newell's
special meeting in order for a quorum to be present for purposes of transacting
business at Newell's special meeting. In the event that a quorum is not present
at Newell's special meeting, it is expected that the meeting will be adjourned
or postponed to solicit additional proxies. Holders of record of Newell common
stock on the record date are each entitled to one vote per share on each matter
to be considered at Newell's special meeting.     
   
  Rubbermaid. Holders of record of Rubbermaid common stock at the close of
business on February 8, 1999, the record date for Rubbermaid's special meeting,
are entitled to receive notice of and to vote at Rubbermaid's special meeting.
On the record date, approximately 150,357,520 shares of Rubbermaid common stock
were issued and outstanding and held by approximately 23,123 holders of record.
A majority of the shares of Rubbermaid common stock issued and outstanding and
entitled to vote on the record date must be represented in person or by proxy
at Rubbermaid's special meeting in order for a quorum to be present for
purposes of transacting business at Rubbermaid's special meeting. In the event
that a quorum is not present at Rubbermaid's special meeting, it is expected
that the meeting will be adjourned or postponed to solicit additional proxies.
Holders of record of Rubbermaid common stock on the record date are each
entitled to one vote per share on each matter to be considered at Rubbermaid's
special meeting.     
 
Votes Required
 
  Newell. The approval of the share issuance requires the affirmative vote of a
majority of the votes cast with respect to that proposal and entitled to vote
at Newell's special meeting, provided that the total number of votes cast on
the proposal represents at least 50% of the total number of shares of Newell
common stock outstanding on the record date. The approval of the name change
requires the
 
                                       59
 
                                                            THE SPECIAL MEETINGS


 
affirmative vote of the holders of record of a majority of the shares of Newell
common stock outstanding on the record date. An abstention or a broker non-
vote, as described below, will have the same effect as a vote against the name
change proposal, and, with respect to the share issuance proposal, will not
count as a vote cast for purposes of determining whether votes representing at
least 50% of the total number of outstanding shares of Newell common stock were
cast with respect to that proposal.
 
  Rubbermaid. The adoption of the merger agreement requires the affirmative
vote of the holders of record of at least two-thirds of the shares of
Rubbermaid common stock outstanding on the record date. An abstention or a
broker non-vote will have the same effect as a vote against the proposal to
adopt the merger agreement.
 
Share Ownership of Management
   
  Newell. At the close of business on the record date, directors and executive
officers of Newell and their affiliates beneficially owned and were entitled to
vote approximately 7,975,400 shares of Newell common stock, which represented
approximately 4.9% of the shares of Newell common stock outstanding on that
date. Each of those directors and executive officers has indicated his or her
present intention to vote, or cause to be voted, the Newell common stock owned
by him or her FOR approval of the share issuance and the name change proposals
at Newell's special meeting.     
   
  Rubbermaid. At the close of business on the record date, directors and
executive officers of Rubbermaid and their affiliates beneficially owned and
were entitled to vote approximately 1,618,000 shares of Rubbermaid common
stock, which represented approximately 1.1% of the shares of Rubbermaid common
stock outstanding on that date. Each of those directors and executive officers
has indicated his or her present intention to vote, or cause to be voted, the
Rubbermaid common stock owned by him or her FOR adoption of the merger
agreement at Rubbermaid's special meeting.     
 
Voting of Proxies
 
 Submitting Proxies
 
  Newell and Rubbermaid stockholders may submit their proxies by attending
their respective special meeting and voting their shares in person at the
meeting, or by completing the enclosed proxy card, signing and dating it and
mailing it in the enclosed postage pre-paid envelope. If a written proxy card
is signed by a stockholder and returned without instructions, the shares
represented by the proxy will be voted for each of the proposals presented at
Newell's special meeting or for the proposal presented at Rubbermaid's special
meeting, as applicable.
 
  Newell stockholders may also submit their proxies by telephone or over the
Internet. The telephone and Internet voting procedures are designed to
authenticate votes cast by use of a personal identification number. These
procedures allow stockholders to appoint a proxy to vote their shares and to
confirm that their instructions have been properly recorded. Instructions for
voting by telephone and over the Internet are printed on the proxy card for
stockholders of record of Newell.
 
  Newell and Rubbermaid stockholders whose shares are held in "street name"
(i.e., in the name of a broker, bank or other record holder) must either direct
the record holder of their shares as to how to vote their shares or obtain a
proxy from the record holder to vote at their respective special meeting.
 
 Revoking Proxies
 
  Newell and Rubbermaid stockholders of record may revoke their proxies at any
time prior to the time their proxies are voted at Newell's special meeting or
Rubbermaid's special meeting,
 
                                       60
 
THE SPECIAL MEETINGS


 
respectively. Proxies may be revoked by written notice, including by telegram
or telecopy, to the Corporate Secretary of Newell or Rubbermaid, as applicable,
by a later-dated proxy signed and returned by mail or by attending Newell's
special meeting or Rubbermaid's special meeting, as applicable, and voting in
person. Attendance at Newell's special meeting or Rubbermaid's special meeting
will not in and of itself constitute a revocation of a proxy. Newell
stockholders of record may also revoke their proxies by a later-dated proxy
using the telephone voting procedures or the Internet voting procedures. Any
written notice of a revocation of a proxy must be sent so as to be delivered
before the taking of the vote at the applicable special meeting as follows:
 
    For Newell Stockholders, to:
    Newell Co.
    6833 Stalter Drive
    Suite 101
    Rockford, Illinois 61108
    Telecopy: 1-815-381-8160
    Attention: Corporate Secretary
 
    For Rubbermaid Stockholders, to:
    Rubbermaid Incorporated
    1147 Akron Road
    Wooster, Ohio 44691
    Telecopy: 1-330-287-2340
    Attention: Corporate Secretary
 
  Stockholders who require assistance in changing or revoking a proxy should
contact Morrow & Co. at the address or phone number provided in this joint
proxy statement/prospectus under the caption "Who Can Help Answer Your
Questions."
 
 General Information
 
  Under the applicable rules of the New York Stock Exchange, brokers who hold
shares in street names for customers who are the beneficial owners of those
shares are prohibited from giving a proxy to vote those customers' shares with
respect to the proposal(s) to be voted on at the special meetings in the
absence of specific instructions from the customer.
 
  Abstentions may be specified on all proposals. Shares of Rubbermaid common
stock or Newell common stock represented at the applicable special meeting for
which proxies have been received, but with respect to which holders of shares
have abstained on any matter, will be treated as present at the applicable
special meeting for purposes of determining the presence or absence of a quorum
for the transaction of all business. For Rubbermaid stockholders, an abstention
or a broker non-vote will have the same effect as a vote against the proposal
to adopt the merger agreement. For Newell stockholders, an abstention or a
broker non-vote will have the same effect as a vote against the name change
proposal and, with respect to the share issuance proposal, will not count as a
vote cast for purposes of determining whether the votes representing at least
50% of the total number of outstanding shares of Newell common stock were cast
with respect to that proposal.
 
  If any other matters are properly presented at Newell's special meeting, in
the case of the Newell stockholders, or at Rubbermaid's special meeting, in the
case of the Rubbermaid stockholders, for consideration, the persons named in
the enclosed form of proxy, and acting thereunder, will have discretion to vote
or not vote on those matters in accordance with their best judgment, unless
authorization to use that discretion is withheld. If a proposal to adjourn
Newell's special meeting or Rubbermaid's special meeting is properly presented,
however, the persons named in the enclosed form of proxy will not have
discretion to vote in favor of the adjournment proposal any shares which have
 
                                       61
 
                                                            THE SPECIAL MEETINGS


 
been voted against the proposal(s) to be presented at the special meetings.
Neither Newell nor Rubbermaid is aware of any matters expected to be presented
at its respective special meeting other than as described in its respective
notice of special meeting.
 
  The cost of solicitation of proxies will be paid by Newell for Newell proxies
and by Rubbermaid for Rubbermaid proxies. In addition to solicitation by mail,
the directors, officers and employees of Newell and Rubbermaid may also solicit
proxies from stockholders by telephone, telecopy, telegram or in person.
Arrangements will also be made with brokerage houses and other custodians,
nominees and fiduciaries to send the proxy materials to beneficial owners; and
Newell or Rubbermaid, as the case may be, will, upon request, reimburse those
brokerage houses and custodians for their reasonable expenses in so doing.
 
  Newell and Rubbermaid have each retained Morrow & Co. to aid in the
solicitation of proxies and to verify certain records related to the
solicitations. Morrow & Co. will receive a fee of $20,000 as compensation for
its services and reimbursement for its related out-of-pocket expenses. Newell
and Rubbermaid have agreed to indemnify Morrow & Co. against certain
liabilities arising out of or in connection with its engagement.
 
  Stockholders who submit proxy cards should not send in any stock certificates
with their proxy cards. A transmittal form with instructions for the surrender
of certificates representing shares of Rubbermaid common stock will be mailed
by Newell to former Rubbermaid stockholders shortly after the merger is
completed. See "Material Provisions of the Merger Agreement--Conversion of
Shares; Procedures for Surrender of Certificates; Book-Entry Registration;
Fractional Shares."
 
                                       62
 
THE SPECIAL MEETINGS


 
                             FINANCIAL INFORMATION
 
          Unaudited Pro Forma Condensed Combined Financial Statements
 
  The following unaudited pro forma financial information gives effect to the
merger under the pooling of interests method of accounting. The information is
presented to reflect the estimated impact of the merger and the issuance of
0.7883 of a share of Newell common stock for each share of Rubbermaid common
stock issued and outstanding at the time of the merger. As of September 30,
1998 there were approximately 149,975,785 shares of Rubbermaid common stock
issued and outstanding. See "The Merger--Accounting Treatment."
 
  The financial information is presented as if the merger had been consummated
as of January 1, 1995 for the unaudited pro forma statements of income and as
of September 30, 1998, for the unaudited pro forma balance sheet. Newell's
financial statements are prepared on a calendar year-end basis of reporting.
Rubbermaid's financial statements were prepared on a calendar year-end basis
until 1998, when Rubbermaid adopted a fiscal year ending on the Friday nearest
December 31.
 
  The financial information gives effect to the reclassifications and
adjustments set forth in the accompanying Notes to Unaudited Pro Forma
Condensed Combined Financial Statements and does not reflect operating income
improvements anticipated as a result of the merger. The financial information
is not necessarily indicative of the operating results and financial position
that might have been achieved had the merger been consummated at the beginning
of the earliest period presented, nor is it necessarily indicative of operating
results and financial position that may occur in the future. For a discussion
of anticipated operating income improvements, see "The Merger--Recommendation
of the Newell Board; Newell's Reasons for the Merger--Anticipated Operating
Income Improvements."
 
  The financial information should be read in conjunction with:
 
 . the audited consolidated financial statements and other financial information
  included in Newell's Current Report on Form 8-K, dated November 17, 1998,
  which reflect Newell's 1998 acquisition of Calphalon Corporation as a pooling
  of interests, including the notes thereto;
 
 . the unaudited consolidated financial statements and other financial
  information included in Newell's Quarterly Report on Form 10-Q for the period
  ended September 30, 1998, including the notes thereto;
 
 . the audited consolidated financial statements and other financial information
  contained in Rubbermaid's Annual Report on Form 10-K for the fiscal year
  ended December 31, 1997, including the notes thereto; and
   
 . the unaudited consolidated financial statements and other financial
  information included in Rubbermaid's Quarterly Report on Form 10-Q and Form
  10-Q/A for the period ended October 2, 1998, including the notes thereto, and
  in each case incorporated by reference herein.     
 
See "Where You Can Find More Information."
 
                                       63
 
                                                           FINANCIAL INFORMATION


 
              UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
                               September 30, 1998
                                 (In millions)
 



                                                                         Pro
                                       Newell  Rubbermaid Adjustment    forma
                                      -------- ---------- ----------   --------
                                                           
Current assets
  Accounts receivable, net........... $  670.2  $  493.7    $  --      $1,163.9
  Inventories, net...................    776.1     311.2      (0.8)(a)  1,086.5
  Other..............................    321.1     148.0       --         469.1
                                      --------  --------    ------     --------
    Total current assets.............  1,767.4     952.9      (0.8)     2,719.5
Property, plant & equipment, net.....    834.5     784.2      (8.8)(a)  1,609.9
Tradenames & goodwill, net, and
 other...............................  2,001.8     446.0     (87.8)(a)  2,360.0
                                      --------  --------    ------     --------
    Total assets..................... $4,603.7  $2,183.1    $(97.4)    $6,689.4
                                      ========  ========    ======     ========
 Current liabilities
  Other accrued liabilities.......... $  668.0  $  213.0    $  --      $  881.0
  Notes payable......................     37.2     434.1       --         471.3
  Other..............................    356.5     155.2      35.0 (g)    546.7
                                      --------  --------    ------     --------
    Total current liabilities........  1,061.7     802.3      35.0      1,899.0
Long-term debt.......................    912.7     152.6       --       1,065.3
Other................................    243.8     171.3       --         415.1
Company-obligated mandatorily
 redeemable convertible preferred
 securities of a subsidiary trust....    500.0       --        --         500.0
Stockholders' equity.................  1,885.5   1,056.9     (97.4)(a)  2,810.0
                                                             (35.0)(g)
                                      --------  --------    ------     --------
Total liabilities and stockholders'
 equity.............................. $4,603.7  $2,183.1    $(97.4)    $6,689.4
                                      ========  ========    ======     ========


 
 
   See accompanying notes to unaudited pro forma condensed combined financial
                                  statements.
 
                                       64
 
FINANCIAL INFORMATION


 
                     UNAUDITED PRO FORMA CONDENSED COMBINED
                              STATEMENT OF INCOME
                  For the nine months ended September 30, 1998
                      (In millions, except per share data)
 



                                                                         Pro
                                      Newell   Rubbermaid Adjustment    forma
                                     --------  ---------- ----------   --------
                                                           
Net sales..........................  $2,650.3   $1,936.8    $(71.3)(d) $4,515.8
Cost of products sold..............   1,786.7    1,383.5       --       3,170.2
                                     --------   --------    ------     --------
    Gross income...................     863.6      553.3     (71.3)     1,345.6
Selling, general and administrative
 expenses..........................     404.9      353.8     (71.3)(d)    684.1
                                                              (3.3)(e)
Trade names and goodwill
 amortization and other............      40.5        --       (1.7)(a)     45.5
                                                               6.7 (b)
Restructuring costs................       --        73.7       --          73.7
                                     --------   --------    ------     --------
    Operating income...............     418.2      125.8      (1.7)       542.3
Net non-operating expenses
 (income)..........................    (169.3)       4.1      (6.7)(b)   (168.6)
                                                               3.3 (e)
                                     --------   --------    ------     --------
    Income before income taxes.....     587.5      121.7       1.7        710.9
Income taxes.......................     250.7       42.6       0.7 (a)    294.0
                                     --------   --------    ------     --------
    Net income.....................  $  336.8   $   79.1    $  1.0     $  416.9
                                     ========   ========    ======     ========
Earnings per share:
  Basic............................  $   2.07   $   0.53               $   1.49
  Diluted..........................      2.02       0.53                   1.47
Weighted average shares
 outstanding:
  Basic............................     162.5      149.9     (31.7)(f)    280.7
  Diluted..........................     173.1      150.3     (31.8)(f)    291.6


 
 
   See accompanying notes to unaudited pro forma condensed combined financial
                                  statements.
 
                                       65
 
                                                           FINANCIAL INFORMATION


 
                     UNAUDITED PRO FORMA CONDENSED COMBINED
                              STATEMENT OF INCOME
                  For the nine months ended September 30, 1997
                      (In millions, except per share data)
 



                                                                           Pro
                                        Newell  Rubbermaid Adjustment     forma
                                       -------- ---------- ----------    --------
                                                             
Net sales............................  $2,395.0  $1,825.4   $ (69.1)(d)  $4,151.3
Cost of products sold................   1,631.2   1,328.0       9.0 (a)   2,968.2
                                       --------  --------   -------      --------
    Gross income.....................     763.8     497.4     (78.1)      1,183.1
Selling, general and administrative
 expenses............................     365.1     314.2       1.0 (a)     609.8
                                                              (69.1)(d)
                                                               (1.4)(e)
Trade names and goodwill amortization
 and other...........................      22.9       --       (0.6)(a)     110.5
                                                                7.2 (b)
                                                               81.0 (c)
Restructuring costs..................       --       16.0      21.2 (a)      37.2
                                       --------  --------   -------      --------
    Operating income.................     375.8     167.2    (117.4)        425.6
Net non-operating expenses (income)..      41.5     (21.3)    134.4 (a)      69.2
                                                                1.4 (a)
                                                               (7.2)(b)
                                                              (81.0)(c)
                                                                1.4 (e)
                                       --------  --------   -------      --------
    Income before income taxes.......     334.3     188.5    (166.4)        356.4
Income taxes.........................     132.4      77.7     (67.7)(a)     142.4
                                       --------  --------   -------      --------
    Net income.......................  $  201.9  $  110.8   $ (98.7)     $  214.0
                                       ========  ========   =======      ========
Earnings per share:
  Basic..............................  $   1.25  $   0.74                $   0.76
  Diluted............................      1.24      0.74                    0.76
Weighted average shares outstanding:
  Basic..............................     162.1     149.9     (31.7)(f)     280.3
  Diluted............................     162.8     150.0     (31.8)(f)     281.0


 
 
   See accompanying notes to unaudited pro forma condensed combined financial
                                  statements.
 
                                       66
 
FINANCIAL INFORMATION


 
                     UNAUDITED PRO FORMA CONDENSED COMBINED
                              STATEMENT OF INCOME
                      For the year ended December 31, 1997
                      (In millions, except per share data)
 



                                                                          Pro
                                        Newell  Rubbermaid Adjustment    forma
                                       -------- ---------- ----------   --------
                                                            
Net sales............................  $3,336.2  $2,399.7    $(94.5)(d) $5,641.4
Cost of products sold................   2,259.5   1,748.4       9.0 (a)  4,016.9
                                       --------  --------    ------     --------
    Gross income.....................   1,076.7     651.3    (103.5)     1,624.5
Selling, general and administrative
 expenses............................     497.7     416.7       1.0 (a)    819.0
                                                              (94.5)(d)
                                                               (1.9)(e)
Trade names and goodwill amortization
 and other...........................      31.9       --       (1.1)(a)    120.9
                                                                9.1 (b)
                                                               81.0 (c)
Restructuring costs..................       --       16.0      21.2 (a)     37.2
                                       --------  --------    ------     --------
    Operating income.................     547.1     218.6    (118.3)       647.4
Net non-operating expenses (income)..      61.8     (15.3)    134.4 (a)     94.1
                                                                1.4 (a)
                                                               (9.1)(b)
                                                              (81.0)(c)
                                                                1.9 (e)
                                       --------  --------    ------     --------
    Income before income taxes.......     485.3     233.9    (165.9)       553.3
Income taxes.........................     192.2      91.4     (67.5)(a)    216.1
                                       --------  --------    ------     --------
    Net income.......................  $  293.1  $  142.5    $(98.4)    $  337.2
                                       ========  ========    ======     ========
Earnings per share:
  Basic..............................  $   1.81  $   0.95               $   1.20
  Diluted............................      1.80      0.95                   1.20
Weighted average shares outstanding:
  Basic..............................     162.2     149.9     (31.7)(f)    280.4
  Diluted............................     163.3     149.9     (31.7)(f)    281.5


 
 
   See accompanying notes to unaudited pro forma condensed combined financial
                                  statements.
 
                                       67
 
                                                           FINANCIAL INFORMATION


 
                     UNAUDITED PRO FORMA CONDENSED COMBINED
                              STATEMENT OF INCOME
                      For the year ended December 31, 1996
                      (In millions, except per share data)
 



                                                                          Pro
                                        Newell  Rubbermaid Adjustment    forma
                                       -------- ---------- ----------   --------
                                                            
Net sales............................  $2,972.8  $2,355.0    $(93.9)(d) $5,233.9
Cost of products sold................   2,020.1   1,649.5       --       3,669.6
                                       --------  --------    ------     --------
    Gross income.....................     952.7     705.5     (93.9)     1,564.3
Selling, general and administrative
 expenses............................     461.8     432.1     (93.9)(d)    800.2
                                                                0.2 (e)
Trade names and goodwill amortization
 and other...........................      23.6       --        6.9 (b)     30.5
                                       --------  --------    ------     --------
    Operating income.................     467.3     273.4      (7.1)       733.6
Net non-operating expenses (income)..      39.0      28.4      (6.9)(b)     60.3
                                                               (0.2)(e)
                                       --------  --------    ------     --------
    Income before income taxes.......     428.3     245.0       --         673.3
Income taxes.........................     169.3      92.6       --         261.9
                                       --------  --------    ------     --------
    Net income.......................  $  259.0  $  152.4    $  --      $  411.4
                                       ========  ========    ======     ========
Earnings per share:
  Basic..............................  $   1.60  $   1.01               $   1.46
  Diluted............................      1.60      1.01                   1.46
Weighted average shares outstanding:
  Basic..............................     161.9     151.0     (32.0)(f)    280.9
  Diluted............................     162.3     151.0     (32.0)(f)    281.3


 
 
   See accompanying notes to unaudited pro forma condensed combined financial
                                  statements.
 
                                       68
 
FINANCIAL INFORMATION


 
                     UNAUDITED PRO FORMA CONDENSED COMBINED
                              STATEMENT OF INCOME
                      For the year ended December 31, 1995
                      (In millions, except per share data)
 



                                                                          Pro
                                        Newell  Rubbermaid Adjustment    forma
                                       -------- ---------- ----------   --------
                                                            
Net sales............................  $2,580.3  $2,344.2    $(86.5)(d) $4,838.0
Cost of products sold................   1,759.9   1,673.2       --       3,433.1
                                       --------  --------    ------     --------
    Gross income.....................     820.4     671.0     (86.5)     1,404.9
Selling, general and administrative
 expenses............................     392.9     402.6     (86.5)(d)    708.9
                                                               (0.1)(e)
Trade names and goodwill amortization
 and other...........................      19.3       --        4.7 (b)     24.0
Restructuring costs..................       --      158.0       --         158.0
                                       --------  --------    ------     --------
    Operating income.................     408.2     110.4      (4.6)       514.0
Net non-operating expenses (income)..      31.0      14.7      (4.7)(b)     41.1
                                                                0.1 (e)
                                       --------  --------    ------     --------
    Income before income taxes.......     377.2      95.7       --         472.9
Income taxes.........................     150.7      35.9       --         186.6
                                       --------  --------    ------     --------
    Net income.......................  $  226.5  $   59.8    $  --      $  286.3
                                       ========  ========    ======     ========
Earnings per share:
  Basic..............................  $   1.40  $   0.38               $   1.00
  Diluted............................      1.40      0.38                   1.00
Weighted average shares outstanding:
  Basic..............................     161.3     158.8     (33.6)(f)    286.5
  Diluted............................     161.6     158.8     (33.6)(f)    286.8


 
 
   See accompanying notes to unaudited pro forma condensed combined financial
                                  statements.
 
                                       69
 
                                                           FINANCIAL INFORMATION


 
      Notes to Unaudited Pro Forma Condensed Combined Financial Statements
 
Note 1--Basis of Presentation
 
  The unaudited pro forma balance sheet combines the historical consolidated
balance sheet of Newell at September 30, 1998 with the historical consolidated
balance sheet of Rubbermaid at October 2, 1998. The unaudited pro forma
statements of income combine the historical consolidated statements of income
of Newell for the nine months ended September 30, 1998 and 1997, and the three
years ended December 31, 1997 with the historical consolidated statements of
income of Rubbermaid for the nine months ended October 2, 1998 and September
30, 1997, and the three years ended December 31, 1997. Certain amounts
reflected in the historical financial statement presentations of both companies
have been reclassified to conform to the unaudited pro forma condensed combined
presentation.
 
  The unaudited pro forma financial statements exclude the effect of any
operating income improvements which may be achieved upon combining the
resources of the companies and exclude costs associated with the integration
and consolidation of the companies which are not presently estimable.
 
Note 2--Pro Forma Adjustments
 
  (a) Newell acquired Rubbermaid's Eldon office products division on June 13,
1997, in a transaction accounted for as a purchase. Because the merger will be
accounted for as a pooling of interests, the accounting effects of Newell's
purchase of Eldon must be reversed. Therefore, Eldon will be treated as if it
had always been owned by the combined company. The adjustments are comprised of
the following:
 
    (1) Elimination of Rubbermaid's gain on the sale of Eldon. The adjustment
  eliminates the $134.4 million pre tax gain.
 
    (2) Elimination of all purchase accounting adjustments associated with
  recording the purchase price allocation. These adjustments include:
 
    . $31.2 million of reserves for business realignment plans, consisting
      primarily of product line and customer rationalizations, and for
      business restructuring, including closure costs for the Maryville,
      Tennessee office location, employee severance and related benefits;
 
    . $9.6 million of fair value adjustments to record assets and
      liabilities at their fair value on the acquisition date; and
 
    . $1.4 million of transaction costs capitalized as part of the purchase
      price.
 
  The assets and liabilities recognized as purchase accounting adjustments,
  excluding the $9.6 million of fair value adjustments, are retroactively
  recognized as charges to the income statement.
 
    (3) Elimination of Eldon goodwill amortization recorded in Newell's
  statement of income. Goodwill amortization eliminated was $1.7 million,
  $0.6 million and $1.1 million for the nine months ended September 30, 1998
  and 1997, and the year ended December 31, 1997, respectively.
 
    (4) Income tax expense related to the above adjustments total $0.7
  million, $(67.7) million and $(67.5) million for the nine months ended
  September 30, 1998 and 1997, and the year ended December 31, 1997,
  respectively.
 
  (b) Adjusted to reclassify Rubbermaid goodwill amortization from "Net non-
operating expenses" to "Trade names and goodwill amortization and other" to
conform with Newell's accounting presentation. Goodwill amortization
reclassified was $6.7 million, $7.2 million, $9.1 million, $6.9 million and
$4.7 million for the nine months ended September 30, 1998 and 1997, and the
years ended December 31, 1997, 1996 and 1995, respectively.
 
                                       70
 
FINANCIAL INFORMATION


 
 
  (c) Adjusted to reclassify $81.0 million of asset impairment charges recorded
by Rubbermaid from "Net non-operating expenses" to "Trade names and goodwill
amortization and other" to conform with Newell's accounting presentation.
 
  (d) Adjusted to reclassify Rubbermaid customer cooperative advertising from
"Selling, general and administrative expenses" to "Net sales" to conform with
Newell's accounting presentation. Selling expense reclassified was $71.3
million, $69.1 million, $94.5 million, $93.9 million and $86.5 million for the
nine months ended September 30, 1998 and 1997, and the years ended December 31,
1997, 1996 and 1995, respectively.
 
  (e) Adjusted to reclassify Rubbermaid royalty income and expense from "Net
non-operating expenses" to "Selling, general and administrative expenses" to
conform with Newell's accounting presentation. Royalty income (expense)
reclassified was $3.3 million, $1.4 million, $1.9 million, $(0.2) million and
$0.1 million for the nine months ended September 30, 1998 and 1997, and the
years ended December 31, 1997, 1996 and 1995, respectively.
 
  (f) The calculation of basic and diluted earnings per common share for the
pro forma financial statements uses the applicable weighted average number of
outstanding common shares of Newell and Rubbermaid adjusted to equivalent
shares of Newell common stock using the 0.7883 merger exchange ratio.
 
  (g) Adjusted to give effect to $35.0 million of estimated merger expenses.
 
Note 3--Federal Income Tax Consequences of the Merger
 
  The unaudited pro forma financial statements assume that the merger qualifies
as a tax-free reorganization for federal income tax purposes.
 
                                       71
 
                                                           FINANCIAL INFORMATION


 
                        INFORMATION ABOUT OUR COMPANIES
 
Newell
 
  Newell is a manufacturer and full-service marketer of staple consumer
products sold to high-volume purchasers, including home centers and hardware
stores, office superstores and contract stationers, discount stores and
warehouse clubs, department and specialty stores, and drug and grocery stores.
Newell's basic business strategy is to merchandise a multi-product offering of
brand name consumer products, which are concentrated in product categories
with relatively steady demand not dependent on changes in fashion, technology
or season, and to differentiate itself by emphasizing superior customer
service. Newell's multi-product offering consists of staple consumer products
in three major product groups: Hardware and Home Furnishings, Office Products,
and Housewares.
 
  Newell's growth strategy emphasizes both acquisitions and internal growth.
Newell has grown both domestically and internationally by acquiring compatible
businesses with brand name product lines and improving the profitability of
those businesses through a careful integration process. Over the last ten
years, Newell has completed more than 20 major acquisitions with aggregate
sales of more than $3 billion in the year prior to acquisition. Newell
supplements acquisition growth with internal growth, principally by:
 
    . introducing new products;
 
    . entering new domestic and international markets;
 
    . adding new customers;
 
    . cross-selling existing product lines to current customers; and
 
    . supporting its U.S.-based customers' international expansion.
 
  Newell's integration process, known as "Newellization," begins when Newell
acquires a business with a history of underperformance that indicates
unrealized profit potential. Soon after an acquisition, Newell begins a
concentrated effort to quickly integrate the new operation and make it a
profitable member of the Newell family. Newell first establishes a focused
business strategy for the new business. By establishing a new business
strategy, Newell can direct the new business to concentrate on opportunities
for improved customer service, core growth and increased profitability.
 
  Along with a new business strategy, Newellization requires that Newell
implement administrative changes in its new business that increase operating
margins. These administrative changes include eliminating corporate overhead
by centralizing office functions, tightening control over the financial
decisions, and trimming excess costs.
 
In the factory, Newellization means:
 
    . improving manufacturing efficiency;
 
    . pruning non-productive product lines;
 
    . reducing inventories; and
 
    . increasing trade receivable turnover.
 
At the customer level, Newell increases the profitability of its new
businesses by:
 
    . improving customer service;
 
    . building partnerships; and
 
    . improving the profitability of the new business' sales mix through
      the application of program merchandising techniques.
 
In most cases, Newell places its experienced managers in key positions at the
new business to instill Newell controls and culture, as well as a team spirit.
The Newellization process typically takes two to three years.
 
                                      72
 
INFORMATION ABOUT OUR COMPANIES


 
 
  Newell believes that its primary competitive strengths are superior customer
service, innovative marketing and merchandising programs, a broad multi-product
offering, market leadership in virtually all product categories, decentralized
manufacturing and marketing, centralized administration, and experienced
management. Newell uses industry leading technology which contributes to its
consistent on time delivery of products to its customers. In the nine month
period ended September 30, 1998, Newell shipped approximately 98% of the items
ordered by customers on time, typically within two to three days of the
customer's order.
 
  Newell's three product groups are Hardware and Home Furnishings, Office
Products, and Housewares. Product categories and principal brand names within
these groups include the following:
 



 Product Groups         Product Categories       Principal Brands(1)
 --------------         ------------------       -------------------
                                           
Hardware and Home  .Window Treatments            Levolor, Kirsch, Newell,
Furnishings                                      Acrimo, Swish, Gardinia
                   .Hardware and Tools           Amerock, Bulldog, EZ Paintr,
                                                 BernzOmatic
                   . Picture Frames, Framed Art  Intercraft, Decorel, Burnes
                     and Photo Albums            of Boston, Holson
                   .Home Storage Products        Lee Rowan, System Works
Office Products    . Markers and Writing         Sanford, Eberhard Faber,
                     Instruments                 Berol, Rotring
                   . Office Storage and          Rolodex, Eldon, Rogers
                     Organization Products
Housewares         . Aluminum Cookware and       Mirro, WearEver, Calphalon,
                     Bakeware                    Panex
                   .Glassware                    Anchor Hocking, Pyrex(2)
                   . Hair Accessories and        Goody, Ace, Wilhold
                     Beauty Organizers


- -------
(1) All the listed brand names are trademarks, which are registered in the
    United States Patent and Trademark Office, except Acrimo.
(2) Used in Europe, the Middle East and Africa only under exclusive license
    from Corning Incorporated and its subsidiaries.
 
  Newell's principal corporate offices are located at the Newell Center, 29
East Stephenson Street, Freeport, Illinois 61032, and its telephone number at
these offices is 1-815-235-4171.
 
Rubbermaid
 
  Rubbermaid and its subsidiaries manufacture, market, sell and distribute
products for resale in the consumer, commercial, industrial, institutional,
specialty, agricultural and contract markets. The items produced and marketed
by Rubbermaid are principally in the home, juvenile, infant and commercial
products categories, and include such product lines as: housewares, hardware,
storage and organizational products, seasonal items, leisure and recreational
products, infant furnishings, children's toys and products, commercial and
industrial maintenance products, home health care products, sanitary
maintenance items, and food service products. Rubbermaid's broad range of
products are sold and distributed through its own sales personnel and
manufacturers' agents to a variety of retailers and wholesalers, including
discount stores and warehouse clubs, toy stores, home centers and hardware
stores, supermarkets, catalog showrooms and distributors serving institutional
markets.
 
  Rubbermaid's basic strategy is to market branded, high-quality products that
offer high value to customers and consumers. Value is that best combination of
quality, service, timeliness, innovation and price as perceived by the user.
 
  Rubbermaid's principal corporate offices are located at 1147 Akron Road,
Wooster, Ohio 44691, and its telephone number at these offices is 1-330-264-
6464.
 
                                       73
 
                                                 INFORMATION ABOUT OUR COMPANIES


 
COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION
   
  On February 8, 1999, the record date for the special meetings, there were
approximately 16,390 holders of record of Newell common stock and
approximately 23,123 holders of record of Rubbermaid common stock.     
 
 Market Prices and Dividends
 
  Newell common stock is listed on the New York Stock Exchange and the Chicago
Stock Exchange under the symbol NWL. Rubbermaid common stock is listed on the
New York Stock Exchange under the symbol RBD.
 
  The table below sets forth, for the periods indicated, the high and low sale
prices of Newell common stock and Rubbermaid common stock as reported on the
New York Stock Exchange Composite Transaction Tape, in each case based on
published financial sources, and the dividends declared on Newell common stock
and Rubbermaid common stock.
 

   

                                                           Rubbermaid Common
                                   Newell Common Stock           Stock
                                  ---------------------- ----------------------
                                   High   Low   Dividend  High   Low   Dividend
                                  ------ ------ -------- ------ ------ --------
                                                     
1996:
  First Fiscal Quarter........... $29.13 $25.38  $0.14   $30.38 $25.25  $0.14
  Second Fiscal Quarter..........  32.25  25.00   0.14    29.50  26.63   0.14
  Third Fiscal Quarter...........  32.50  28.00   0.14    29.25  22.13   0.14
  Fourth Fiscal Quarter..........  33.75  28.13   0.14    24.88  22.50   0.15
1997:
  First Fiscal Quarter...........  38.63  30.13   0.16    25.00  21.38   0.15
  Second Fiscal Quarter..........  40.75  32.13   0.16    30.25  23.88   0.15
  Third Fiscal Quarter...........  43.81  36.88   0.16    30.50  23.63   0.15
  Fourth Fiscal Quarter..........  43.75  32.75   0.16    26.75  23.00   0.16
1998:
  First Fiscal Quarter...........  50.38  39.88   0.18    29.56  24.19   0.16
  Second Fiscal Quarter..........  50.00  45.06   0.18    35.13  27.56   0.16
  Third Fiscal Quarter...........  55.19  42.63   0.18    35.88  22.25   0.16
  Fourth Fiscal Quarter..........  50.13  35.69   0.18    35.38  22.00   0.16
1999:
  First Fiscal Quarter (through
   February 3, 1999).............  43.00  36.06    --     32.94  27.75   0.16

    
   
  On October 20, 1998, the last full trading day prior to the public
announcement of the proposed merger, the closing prices of Newell common stock
and Rubbermaid common stock reported on the New York Stock Exchange Composite
Transaction Tape were $49.06 per share and $25.88 per share, respectively. On
February 3, 1999, the most recent practicable date prior to the printing of
this joint proxy statement/prospectus, the closing prices of Newell common
stock and Rubbermaid common stock reported on the New York Stock Exchange
Composite Transaction Tape were $41.00 per share and $31.56 per share,
respectively. Stockholders should obtain current market quotations prior to
making any decision with respect to the merger.     
 
 Dividends
 
  Newell and Rubbermaid Dividends. Newell has paid cash dividends on Newell
common stock since 1947. Dividends are paid quarterly. Rubbermaid has paid
cash dividends on Rubbermaid common stock since 1941. Dividends are paid
quarterly. The Newell Board is expected to declare a dividend for the first
quarter of 1999, with record and payment dates for the dividend that will be
prior to the date of the Newell special meeting. The Rubbermaid Board declared
a $0.16 per share dividend on January 15, 1999, which is payable on March 1,
1999 to stockholders of record on February 12, 1999.
 
  Post-Merger Dividend Policy. Following the merger, management expects to
recommend that Newell pay dividends on the Newell common stock initially in
the amount of $0.18 per share per quarter, or $0.72 per share per year. The
payment of dividends will be in the discretion of the Newell Board and will be
determined after consideration of various factors, including the earnings and
financial condition of Newell and its subsidiaries.
 
                                      74
 
INFORMATION ABOUT OUR COMPANIES


 
DIRECTORS AND EXECUTIVE OFFICERS OF NEWELL AFTER THE MERGER
 
Directors
 
  The Newell Board currently consists of 11 members and is divided into three
classes. Under the merger agreement, at the time of the merger, the size of the
Newell Board will be increased to 15 members and will be divided into three
classes as set forth below. Nine of these members currently serve on the Newell
Board and will continue as directors. The other six members have been
designated by Rubbermaid and currently serve on the Rubbermaid Board. At the
time of the merger, two members of the current Newell Board, Gary H. Driggs and
Henry B. Pearsall, will resign, and Rubbermaid's director designees will be
appointed members of the Newell Board, as provided in the merger agreement. See
"Interests of Certain Persons in the Merger."
 
  Newell's certificate of incorporation provides for the Newell Board to be
divided into three classes which shall be as nearly equal in number as
possible. Accordingly, each class will consist of five directors, with initial
terms expiring at the annual meetings of stockholders to be held in 1999, 2000
and 2001, respectively. Each class of directors elected at an annual meeting of
stockholders of Newell after the merger will be elected for a three-year term.
The continuing Newell Directors will each continue to serve in the class to
which they were elected, except that Thomas A. Ferguson, Jr. will resign from
the 2001 class and be appointed to the class whose term expires in 1999.
Rubbermaid's director designees were assigned to their respective classes
pursuant to the merger agreement.
 
  Set forth below is certain information with respect to the 15 individuals who
will comprise the Newell Board after the merger:
 



                                      Continuing
                                       Director/        Position with Newell      Term
 Name                         Age Rubbermaid Designee   Following the Merger    Expiring
 ----                         --- -------------------   --------------------    --------
                                                                    
 William P. Sovey............ 65  Continuing Director Chairman of the Board       2000
                                                       and Director
 John J. McDonough........... 62  Continuing Director Vice Chairman of the        2000
                                                       Board, Chief Executive
                                                       Officer and Director
 Wolfgang R. Schmitt......... 54  Rubbermaid Designee Vice Chairman of the        2000
                                                       Board and Director
 Tom H. Barrett.............. 68  Rubbermaid Designee Director                    2000
 Scott S. Cowen.............. 52  Rubbermaid Designee Director                    2001
 Alton F. Doody.............. 64  Continuing Director Director                    1999
 Thomas J. Falk.............. 40  Rubbermaid Designee Director                    1999
 Daniel C. Ferguson.......... 71  Continuing Director Director                    1999
 Thomas A. Ferguson, Jr...... 51  Continuing Director President, Chief            1999
                                                       Operating Officer and
                                                       Director
 Robert L. Katz.............. 72  Continuing Director Director                    2000
 William D. Marohn........... 58  Rubbermaid Designee Director                    1999
 Elizabeth Cuthbert Millett.. 42  Continuing Director Director                    2001
 Cynthia A. Montgomery....... 46  Continuing Director Director                    2001
 Allan P. Newell............. 52  Continuing Director Director                    2001
 Gordon R. Sullivan.......... 61  Rubbermaid Designee Director                    2001


 
  William P. Sovey has been Chairman of the Newell Board since January 1, 1998
and a Director since 1986. He was Vice Chairman of the Newell Board and Chief
Executive Officer of Newell from May 1992 through December 1997. Mr. Sovey was
President and Chief Operating Officer of Newell from January 1986 through May
1992. He was President and Chief Operating Officer of AMF Inc., an industrial
and consumer leisure products company, from March 1982 through July 1985, and
Executive
 
                                       75
 
                                                 INFORMATION ABOUT OUR COMPANIES


 
Vice President from August 1979 through March 1982. He is also a Director of
Acme Metals Incorporated, a fully integrated producer of steel and steel
products, and TECO Energy Incorporated, an energy production and distribution
company.
 
  John J. McDonough has been Vice Chairman of the Newell Board and Chief
Executive Officer of Newell since January 1, 1998 and a Director since 1992.
He has been President and Chief Executive Officer of McDonough Capital Company
LLC, an investment management company, since April 1995. Prior thereto, he was
Vice Chairman and a director of Dentsply International Inc., a manufacturer
and distributor of dental and medical x-ray equipment and other dental
products, from 1983 through October 1995, and was Chief Executive Officer from
April 1983 through February 1995. He was Senior Vice President--Finance of
Newell from November 1981 through April 1983.
 
  Wolfgang R. Schmitt has been Chairman of the Rubbermaid Board since
September 1993 and Chief Executive Officer of Rubbermaid since November 1992.
From May 1991 through November 1992, Mr. Schmitt served as President and Chief
Operating Officer of Rubbermaid. Mr. Schmitt served as Executive Vice
President of Rubbermaid from 1987 through May 1991, and President of the Home
Products Division of Rubbermaid from 1984 through 1990. From 1966 to 1984, Mr.
Schmitt was employed by Rubbermaid in various marketing and research and
development assignments. Mr. Schmitt is also a director of Kimberly-Clark
Corporation and Parker-Hannifin Corporation.
 
  Tom H. Barrett has been a partner of American Industrial Partners, an
investment partnership, since 1991. From 1989 through 1991, Mr. Barrett served
as the Chairman and Chief Executive Officer of The Goodyear Tire & Rubber
Company, a manufacturer of tires, chemicals, plastic film and other rubber
products. From 1988 through 1989, Mr. Barrett served as President and Chief
Executive Officer of Goodyear. From 1982 through 1988, Mr. Barrett served as
President and Chief Operating Officer of Goodyear. Mr. Barrett is also a
director of: Air Products and Chemicals Inc., a manufacturer of industrial and
specialty gases and chemicals; MONY Inc., an insurance and financial products
company; and A.O. Smith Corporation, a diversified manufacturer of home
heating, agricultural and electrical products. Mr. Barrett has been a director
of Rubbermaid since 1984.
 
  Scott S. Cowen has been the President of Tulane University and Seymor C.
Goodman Professor of Management and Economics since July 1998. From 1984
through July 1998, Mr. Cowen served as Dean and Albert J. Weatherhead, III
Professor of Management, Weatherhead School of Management, Case Western
Reserve University. Prior to his departure in 1998, Mr. Cowen had been
associated with Case Western Reserve University in various capacities since
1976. Mr. Cowen is currently a Director of: American Greetings Corp., a
manufacturer of greeting cards and related merchandise; Forest City
Enterprises, a real estate developer; and Jo-Ann Stores, an operator of retail
fabric shops. Mr. Cowen has been a director of Rubbermaid since 1997.
 
  Alton F. Doody has been President and Chief Executive Officer of The Alton
F. Doody Co., a marketing consulting company, since 1984 and a Director on the
Newell Board since 1976.
 
  Thomas J. Falk has been the Group President, Tissue, Pulp and Paper of
Kimberly-Clark Corporation, a producer of consumer, paper and personal care
products, since January 1996. From 1993 through January 1996, Mr. Falk was the
Group President Infant and Child Care Products, Group President North American
Consumer Products and Group President North American Tissue Products of
Kimberly-Clark. Mr. Falk has been with Kimberly-Clark since 1983 and has
served in numerous management, financial and administrative roles. Mr. Falk
has been a director of Rubbermaid since 1997.
 
  Daniel C. Ferguson was Chairman of the Newell Board from May 1992 through
December 1997 and has been a Director since 1965. Mr. Ferguson was Chief
Executive Officer of Newell from 1966 through May 1992. He is a director of
the Northern Trust Co. of Florida, a financial institution.
 
                                      76
 
INFORMATION ABOUT OUR COMPANIES


 
 
  Thomas A. Ferguson, Jr. has been President and Chief Operating Officer of
Newell since May 1992 and a Director since 1992. Prior thereto, Mr. Ferguson
was President--Operating Companies of Newell from January 1989 through May
1992. He was Vice President--Controller of Newell from February 1988 through
December 1988.
 
  Robert L. Katz has been President of Robert L. Katz & Associates, consultants
in corporate strategy, for more than five years and a Director on the Newell
Board since 1975. For sixteen years, Dr. Katz taught Business Policy and
Organizational Behavior at the Stanford, Harvard and Dartmouth Graduate Schools
of Business. He is also a director of HON Industries Inc., an office furniture
manufacturing company.
 
  William D. Marohn retired as Vice Chairman of the Board of Whirlpool
Corporation, a manufacturer and marketer of major home appliances, in December
1998, which he had served as since 1997. From October 1992 through 1997, Mr.
Marohn served as the President and Chief Operating Officer of Whirlpool. From
January 1992 through October 1992, Mr. Marohn served as President and Chief
Executive Officer of Whirlpool Europe, B.V. From 1989 through January 1992, Mr.
Marohn served as Executive Vice President of Whirlpool's North American
Appliance Group. From 1988 through 1989, Mr. Marohn served as President of
Whirlpool's Kenmore Appliance Group. Mr. Marohn had been associated with
Whirlpool since 1964. Mr. Marohn has been a director of Rubbermaid since 1993.
 
  Elizabeth Cuthbert Millett has been the owner and operator of Plum Creek
Ranch, a commercial cattle production company located in Newcastle, Wyoming,
for more than five years and a Director on the Newell Board since 1995.
 
  Cynthia A. Montgomery has been a Professor of Business Administration at the
Harvard University Graduate School of Business since 1989 and a Director on the
Newell Board since 1995. Prior thereto, Professor Montgomery was a Professor at
the Kellogg School of Management at Northwestern University from 1985 to 1989.
She is also a director of UNUM Corporation, an insurance company, and 28 mutual
funds managed by Merrill Lynch & Co. or one of its subsidiary investment
companies.
 
  Allan P. Newell has been a private investor for more than five years and a
Director on the Newell Board since 1982.
 
  Gordon R. Sullivan has been President, Association of the United States Army
since February 1998. From 1995 through 1997, Mr. Sullivan served as Corporate
Vice President, Coleman Research Corporation, a systems engineering company and
a subsidiary of Thermo Electron Corporation. From 1991 through 1995, Mr.
Sullivan served as Chief of Staff of the United States Army. Prior thereto, Mr.
Sullivan served as Vice Chief of Staff and Deputy Chief of Staff for Operations
and Plans of the United States Army. Mr. Sullivan is also a director of Shell
Oil Company, a worldwide petrochemical manufacturer and marketer, and Army
National Bank. Mr. Sullivan has been a director of Rubbermaid since 1995.
 
  Please note that Daniel C. Ferguson and Thomas A. Ferguson, Jr. are not
related.
 
                                       77
 
                                                 INFORMATION ABOUT OUR COMPANIES


 
 
Executive Officers
 
  Newell's current executive officers will continue in their same capacities
with Newell following the merger. In addition to Messrs. McDonough and T.
Ferguson, the other senior executive officers of Newell are:
 



      Name                       Age Position with Newell
      ----                       --- --------------------
                               
      Donald L. Krause..........  59 Senior Vice President--Corporate Controller
      William T. Alldredge......  58 Vice President--Finance
      Richard C. Dell...........  51 Group President
      William J. Denton.........  54 Group President
      Robert S. Parker..........  52 Group President
      Gilbert A. Niesen.........  54 Vice President--Personnel Relations


 
  Donald L. Krause has served as Senior Vice President--Corporate Controller
of Newell since March 1990. He was President--Industrial Companies from
February 1988 to March 1990.
 
  William T. Alldredge has served as Vice President--Finance of Newell since
August 1983.
 
  Richard C. Dell has served as Group President of Newell since June 1992. He
was President of Amerock from November 1989 to June 1992, and President of EZ
Paintr from September 1987 to November 1989.
 
  William J. Denton has served as Group President of Newell since March 1990.
From April 1989 to March 1990, he was Vice President--Corporate Controller.
Mr. Denton was President of Anchor Hocking Glass from August 1987 to April
1989.
 
  Robert S. Parker has served as Group President of Newell since August 1998.
He was President of Sanford Corporation from February 1992 through August
1998.
 
  Gilbert A. Niesen has served as Vice President--Personnel Relations of
Newell since May 1998. He was Vice President of Human Resources of Mirro from
March 1994 to May 1998, and Vice President of Human Resources of Amerock
Corporation from December 1987 to March 1994.
 
                                      78
 
INFORMATION ABOUT OUR COMPANIES


 
                   INTERESTS OF CERTAIN PERSONS IN THE MERGER
 
  In considering the recommendation of the Rubbermaid Board with respect to the
merger agreement, stockholders of Rubbermaid should be aware that certain
directors and members of management of Rubbermaid have interests in the merger
that are in addition to their interests as stockholders of Rubbermaid
generally. The Rubbermaid Board was aware of these interests and considered
them, among other matters, in approving the merger.
 
  Newell Directors. The merger agreement provides that six Rubbermaid designees
designated by the Chairman of Rubbermaid's Nominating Committee, Tom H.
Barrett, are to become members of the Newell Board at the time of the merger.
Upon the appointment of Rubbermaid's director designees, the Newell Board will
consist of 15 directors, six of whom were directors of Rubbermaid at the date
of the merger agreement. The merger agreement also provides that at the time of
the merger, Mr. Schmitt will become a Vice Chairman of the Newell Board. See
"Directors and Executive Officers of Newell after the Merger."
 
  Stock Options, Restricted Stock and Performance Shares. Rubbermaid has issued
stock options, restricted stock and performance shares to certain officers and
key employees under its Amended and Restated 1989 Stock Incentive and Option
Plan. Under the terms of that option plan, Rubbermaid stock options that are
outstanding as of the date of a "change in control" of Rubbermaid become fully
vested and exercisable, and the restrictions on restricted stock and
performance shares lapse on the day before a "change in control" of Rubbermaid.
A "change in control" of Rubbermaid, for purposes of its option plan, occurred
as a result of the filing by Rubbermaid of a Current Report on Form 8-K with
the Securities and Exchange Commission on October 21, 1998 announcing the
signing of the merger agreement. Under the merger agreement, each outstanding
Rubbermaid stock option will be converted into an option to purchase a number
of shares of Newell common stock, and each outstanding Rubbermaid restricted
stock and performance share will be converted into a number of shares of Newell
common stock. That number, in each case, will be determined as provided for in
the merger agreement and described in "Material Provisions of the Merger
Agreement--Additional Agreements--Stock Options, Performance Shares and
Restricted Stock."
 
  The number of vested Rubbermaid stock options beneficially owned by the five
most highly compensated executive officers of Rubbermaid for the year ended
December 31, 1998 increased as a result of the change in control of Rubbermaid
as follows:
 



                                  Number of    Weighted   Number of    Weighted
                                Options Vested Average  Options Vested Average
                                before Change  Exercise  after Change  Exercise
Name and Principal Position       in Control    Price     in Control    Price
- ---------------------------     -------------- -------- -------------- --------
                                                           
Wolfgang R. Schmitt............    475,791      $28.94     739,125      $27.56
 Chairman of the Board and
 Chief Executive Officer
Charles A. Carroll.............    199,358      $25.61     319,359      $25.41
 President and Chief
 Operating Officer
Joseph M. Ramos................     86,552      $27.46     113,352      $26.93
 President and Chief
 Operating Officer,
 Rubbermaid Commercial
 Products
Derial H. Sanders..............     36,744      $27.62      62,044      $26.61
 President and Chief
 Operating Officer,
 Graco Children's Products
David T. Gibbons...............     50,004      $25.05      95,005      $25.02
 President and General
 Manager,
 Rubbermaid Europe


 
                                       79
 
                                                 INFORMATION ABOUT OUR COMPANIES


 
 
  In addition, the number of vested Rubbermaid stock options beneficially
owned by other present or former directors or employees of Rubbermaid
increased as a result of the change in control of Rubbermaid from 827,020
stock options which were vested prior to the change in control with an average
exercise price of $25.74 per share to 1,833,375 vested stock options after the
change in control with an average exercise price of $25.54 per share.
 
  The five most highly compensated executive officers of Rubbermaid for the
year ended December 31, 1998 had an aggregate of 150,972 shares of restricted
stock and performance shares on which restrictions lapsed as of October 20,
1998 as a result of the change in control of Rubbermaid. In addition, other
present or former employees of Rubbermaid had, in the aggregate, 236,498
shares of restricted stock and performance shares on which restrictions lapsed
as of October 20, 1998 as a result of the change in control of Rubbermaid.
 
  Change in Control Employment Agreements. Rubbermaid has in place existing
change in control employment agreements with 16 key executive officers and key
employees of Rubbermaid and its subsidiaries.
 
  If a key executive's or key employee's employment is terminated in a
"qualifying termination" within five years following a change in control of
Rubbermaid, Rubbermaid will pay to that person within five days of the
termination a lump sum amount equal to three times the sum of:
 
  . his or her base salary;
 
  . his or her annual incentive bonus;
 
  . the dollar value of his or her long term incentive award; and
 
  . $50,000, increased by the percentage increase in the U.S. Consumer Price
    Index from 1996 to the date of the qualifying termination.
 
In addition, Rubbermaid will continue to provide to that person, for three
years following the qualifying termination, all perquisites, benefits and
service credit for benefits provided under any and all welfare, retirement,
deferred compensation, salary continuation and expense reimbursement plans or
arrangements in which that person is entitled to participate or which may be
adopted in the future, or cash in lieu thereof. If any payment made to a key
executive or key employee is subject to any excise tax under Section 4999 of
the Internal Revenue Code, a gross-up payment will be made to place that
person in the same net after-tax position as would have been the case if no
excise tax were imposed.
 
  A "change in control" of Rubbermaid for purposes of Rubbermaid's change in
control employment agreements has occurred as a result of the filing by
Rubbermaid of a Current Report on Form 8-K with the Securities and Exchange
Commission on October 21, 1998 announcing the signing of the merger agreement.
A "qualifying termination" means:
 
  . any termination by a key executive or a key employee for any reason
    within two years following the change in control of Rubbermaid;
 
  . any termination of a key executive or a key employee by Rubbermaid or its
    successor without Cause, as that term is used in Rubbermaid's change in
    control employment agreements, within the third, fourth or fifth year
    following the change in control of Rubbermaid; or
 
  . any termination by a key executive or a key employee for Good Reason, as
    that term is used in Rubbermaid's change in control employment
    agreements, within the third, fourth or fifth year following the change
    in control of Rubbermaid.
 
It is presently estimated, based upon certain assumptions and data available
as of a recent date, that if the key executives' and key employees' employment
is terminated immediately following the merger
 
                                      80
 
INFORMATION ABOUT OUR COMPANIES


 
under circumstances entitling those persons to severance benefits under
Rubbermaid's change in control employment agreements, those persons will be
entitled to severance benefits approximately in the following amounts, which
include required excise tax gross-up payments (in millions):
 



                                                     Excise Tax Gross-Up
      Name                      Severance Benefit(1)     Payment(2)      Total Benefits
      ----                      -------------------- ------------------- --------------
                                                                
      Wolfgang R. Schmitt.....         $12.1                $ 7.7            $19.8
      Charles A. Carroll......           6.9                  4.4             11.3
      Joseph M. Ramos.........           3.0                  2.0              5.0
      Derial H. Sanders.......           2.7                    0              2.7
      David T. Gibbons........           3.1                  1.9              5.0
      All Other Key Executives
       as a Group.............          21.1                 12.1             33.2


- -------
(1) Severance benefits are subject to income taxation at the key executive's or
    key employee's highest marginal rate.
(2) Excise tax gross-up payment will be remitted directly to the Internal
    Revenue Service by Rubbermaid.
 
  Indemnification and Insurance. Under the merger agreement, Newell agreed to
provide certain continuing indemnification and insurance benefits for officers,
directors and employees of Rubbermaid. See "Material Provisions of the Merger
Agreement--Additional Agreements--Indemnification and Insurance."
 
                                       81
 
                                                 INFORMATION ABOUT OUR COMPANIES


 
                       COMPARISON OF STOCKHOLDER RIGHTS
 
  The rights of Rubbermaid stockholders are currently governed by Ohio law and
Rubbermaid's articles of incorporation and code of regulations. The rights of
Newell stockholders are currently governed by Delaware law and Newell's
certificate of incorporation and bylaws. In accordance with the merger
agreement, at the time of the merger, each issued and outstanding share of
Rubbermaid common stock, other than dissenting shares and any shares owned by
Newell or Newell's merger subsidiary or held by Rubbermaid as treasury stock,
will be converted into the right to receive 0.7883 of a share of Newell common
stock. Accordingly, upon completion of the merger, the rights of Newell
stockholders and Rubbermaid stockholders who become stockholders of Newell in
the merger will be governed by Delaware law, Newell's certificate of
incorporation and Newell's bylaws. The following are summaries of the material
differences between the current rights of Rubbermaid stockholders and the
rights of Newell stockholders.
 
  The following discussions are not intended to be complete and are qualified
by reference to Rubbermaid's articles of incorporation, and code of
regulations and Newell's certificate of incorporation and bylaws. Copies of
these documents are incorporated by reference in this document and will be
sent to stockholders of Newell and Rubbermaid upon request. See "Where You Can
Find More Information."
 
Cumulative Voting
 
  Rubbermaid. Under Ohio law, cumulative voting is required to be available
for the election of directors if notice to that effect is given by a
stockholder prior to a stockholders' meeting and an announcement to that
effect is made at the meeting. Cumulative voting may be eliminated under Ohio
law by an amendment of the articles of incorporation. Rubbermaid's articles of
incorporation do not provide for the elimination of cumulative voting for the
election of directors and, as such, cumulative voting is available for the
election of Rubbermaid's directors.
 
  Newell. Under Delaware law, stockholders do not have the right to cumulate
their votes in the election of directors unless that right is granted in the
certificate of incorporation. Newell's certificate of incorporation does not
provide for cumulative voting.
 
Appraisal and Dissenters' Rights
 
  Rubbermaid. Under Ohio law, dissenting stockholders are entitled to
appraisal rights in connection with the lease, sale, exchange, transfer or
other disposition of all or substantially all of the assets of a corporation
and in connection with certain amendments to the corporation's articles of
incorporation. Stockholders of an Ohio corporation being merged into or
consolidated with another corporation are also entitled to appraisal rights.
In addition, stockholders of an acquiring corporation are entitled to
appraisal rights in any merger, combination or majority share acquisition in
which those stockholders are entitled to voting rights. Ohio law provides
stockholders of an acquiring corporation with voting rights if the acquisition
involves the transfer of shares of the acquiring corporation entitling the
recipients thereof to exercise one-sixth or more of the voting rights of the
acquiring corporation immediately after the transaction is completed. A
stockholder's written demand must be delivered to the corporation not later
than ten days after the taking of the vote on the matter giving rise to the
appraisal rights.
 
  Newell. Under Delaware law, appraisal rights are available to dissenting
stockholders in connection with certain mergers or consolidations. However,
unless the certificate of incorporation otherwise provides, Delaware law does
not provide for appraisal rights:
 
  . if the shares of the corporation are listed on a national securities
    exchange or designated as a national market systems security on an
    interdealer quotations system by the National
 
                                      82
 
COMPARISON OF STOCKHOLDER RIGHTS


 
   Association of Securities Dealers, Inc., as long as the shares received are
   also likewise listed, or are held of record by more than 2,000
   stockholders; or
 
  . if the corporation is the surviving corporation and no vote of its
    stockholders is required for the merger.
 
Delaware law does not provide appraisal rights to stockholders who dissent from
the sale of all or substantially all of a corporation's assets or an amendment
to the corporation's certificate of incorporation, although a corporation's
certificate of incorporation may so provide. Newell's certificate of
incorporation does not so provide.
 
Stockholder Action by Written Consent
 
  Rubbermaid. Under Ohio law, unless prohibited by the articles of
incorporation or the code of regulations, any action by stockholders generally
must be taken at a meeting, unless a written consent stating the action to be
taken is signed by all the stockholders who would be entitled to notice of the
meeting held to consider the subject matter of the written consent.
Rubbermaid's code of regulations does not prohibit Rubbermaid's stockholders
from acting by written consent.
 
  Newell. Under Delaware law, unless the certificate of incorporation provides
otherwise, any action by stockholders must be taken at a meeting of
stockholders, unless a written consent stating the action to be taken is signed
by stockholders having not less than the minimum number of votes necessary to
take that action at a meeting at which all shares entitled to vote were present
and voted. Newell's certificate of incorporation provides that any action
required to be taken by the stockholders must be effected by a duly called
annual or special meeting and cannot be effected by written consent of
stockholders.
 
Control Share Acquisitions
 
  Rubbermaid. Section 1701.831 of the Ohio law provides that certain notice and
informational filings and special stockholder meeting and voting procedures
must be followed prior to consummation of a proposed "control share
acquisition," which is defined as any acquisition of an issuer's shares which
would entitle the acquiror, immediately after that acquisition, directly or
indirectly, to exercise or direct the exercise of voting power of the issuer in
the election of directors within any of the following ranges of that voting
power:
 
  . one-fifth or more but less than one-third of that voting power;
 
  . one-third or more but less than a majority of that voting power; or
 
  . a majority or more of that voting power.
 
Assuming compliance with the notice and information filings prescribed by
statute, the proposed control share acquisition may be made only if, at a
special meeting of stockholders, the acquisition is approved by both a majority
of the voting power of the issuer represented at the meeting and a majority of
the voting power remaining after excluding the combined voting power of the
"interested shares," being the shares held by the intended acquiror and the
directors and officers of the issuer.
 
  Newell. Delaware law does not contain a control share acquisition statute or
provision. See "--Business Combinations with Certain Persons" for certain
restrictions imposed by Delaware law and Newell's certificate of incorporation
regarding business combinations.
 
Constituencies Provisions
 
  Rubbermaid. Section 1701.59 of the Ohio law permits a director, in
determining what that director reasonably believes to be in the best interests
of the corporation, to consider, in addition to the interests of the
corporation's shareholders, any of the following:
 
  . the interests of the corporation's employees, suppliers, creditors, and
    customers;
 
  . the economy of the state and nation;
 
  . community and societal considerations; and
 
                                       83
 
                                                COMPARISON OF STOCKHOLDER RIGHTS


 
 
  . the long-term as well as short-term interests of the corporation and its
    shareholders, including the possibility that these interests may be best
    served by the continued independence of the corporation.
 
  Newell. Delaware law contains no comparable provision to Section 1701.59 of
the Ohio law.
 
Amendment of Charter Documents
 
  Rubbermaid. Ohio law permits the adoption of amendments to the articles of
incorporation if those amendments are approved at a meeting held for that
purpose by the holders of shares entitling them to exercise two-thirds of the
voting power of the corporation, or a lesser, but not less than a majority, or
greater vote as specified in the articles of incorporation. Amendment of
Rubbermaid's articles of incorporation requires the approval of the holders of
at least two-thirds of the voting power then outstanding, except that
amendment of the following provisions requires the affirmative vote of the
holders of shares of Rubbermaid entitled to exercise 85% of the voting power
of Rubbermaid, as well as of the holders of 85% of the Rubbermaid common stock
voting separately as a class:
 
  . Article Fifth, which relates to certain tender offers;
 
  . Article Sixth, which relates to transactions with related corporations or
    affiliates; and
 
  . Article Seventh, which relates to the directors' authority to purchase
    any securities of Rubbermaid.
 
  Under Ohio law, a code of regulations may be adopted, amended or repealed
only by approval of the stockholders either at a meeting of stockholders by
the affirmative vote of the holders of shares entitling them to exercise a
majority of the voting power on that proposal or by written consent signed by
holders of shares entitling them to exercise two-thirds of the voting power on
that proposal. Rubbermaid's code of regulations provides that they may be
amended by the affirmative vote of the holders of shares entitling them to
exercise two-thirds of the voting power on that proposal, but no amendment to
Rubbermaid's code of regulations reducing the number of directors shall have
the effect of removing any director prior to the expiration of the director's
term of office.
 
  Newell. Delaware law provides that an amendment to a corporation's
certificate of incorporation requires that the board of directors adopt a
resolution setting forth the proposed amendment and that a majority of the
voting power of the then outstanding capital stock of the company approve the
amendment, although the certificate of incorporation may provide for a greater
vote. Newell's certificate of incorporation provides that it may be amended as
prescribed by Delaware law, except that amendment of the following provisions
must be approved by the affirmative vote of 75% of the voting power of Newell:
 
  . Article Sixth, which relates to the election and classes of the Newell
    Board;
 
  . Article Eighth, which relates to the nomination of the Newell Board;
 
  . Article Ninth, which relates to stockholder actions to be effected at a
    duly called meeting of stockholders; and
 
  . Article Tenth, which relates to selected business combinations.
 
Delaware law provides that amendment of a corporation's bylaws may be made by
holders of a majority of the voting power of the outstanding capital stock of
the corporation. Newell's certificate of incorporation provides that the
Newell Board is authorized to amend Newell's bylaws.
 
Business Combinations with Certain Persons
 
  Rubbermaid. Rubbermaid is subject to Chapter 1704 of the Ohio law, which
prohibits certain business combinations and transactions between an "issuing
public corporation" and an "Ohio law
 
                                      84
 
COMPARISON OF STOCKHOLDER RIGHTS


 
interested stockholder" for at least three years after the Ohio law interested
stockholder attains 10% ownership, unless the board of directors of the issuing
public corporation approves the transaction before the Ohio law interested
stockholder attains 10% ownership. An "issuing public corporation" is an Ohio
corporation with 50 or more stockholders that has its principal place of
business, principal executive offices, or substantial assets within the State
of Ohio, and as to which no close corporation agreement exists. An "Ohio law
interested stockholder" is a beneficial owner of 10% or more of the shares of a
corporation. Examples of transactions regulated by Chapter 1704 include the
disposition of assets, mergers and consolidations, voluntary dissolutions and
the transfer of shares.
 
  Subsequent to the three-year period, a transaction subject to Chapter 1704
may take place provided that certain conditions are satisfied, including:
 
  . prior to the interested stockholder's share acquisition date, the board of
    directors approved the purchase of shares by the interested stockholder;
 
  . the transaction is approved by the holders of shares with at least two-
    thirds of the voting power of the corporation (or a different proportion
    set forth in the articles of incorporation), including at least a majority
    of the outstanding shares after excluding shares controlled by the Ohio
    law interested stockholder; or
 
  . the business combination results in stockholders, other than the Ohio law
    interested stockholder, receiving a fair price plus interest for their
    shares.
 
Chapter 1704 is applicable to all corporations formed under Ohio law.
 
  Newell. Section 203 of the Delaware law, which applies to Newell, regulates
transactions with major stockholders after they become major stockholders.
Section 203 prohibits a Delaware corporation from engaging in business
combinations, including mergers, dispositions of 10% or more of its assets,
issuances of stock and other transactions, with a "Delaware law interested
stockholder" for a period of three years after that stockholder becomes a
Delaware law interested stockholder. A "Delaware law interested stockholder" is
a person or group that owns 15% or more of the voting stock of a corporation.
These restrictions on transactions involving a Delaware law interested
stockholder do not apply in certain circumstances, including those in which:
 
  . before the interested stockholder owned 15% or more of the voting stock,
    the board of directors approved the business combination or the
    transaction that resulted in the person or group becoming a Delaware law
    interested stockholder;
 
  . in the transaction that resulted in the person or group becoming a
    Delaware law interested stockholder, the person or group acquired at least
    85% of the voting stock other than stock owned by inside directors and
    certain employee stock plans;
 
  . after the person or group became a Delaware law interested stockholder,
    the board of directors and at least two-thirds of the voting stock other
    than stock owned by the Delaware law interested stockholder approved the
    business combination; or
 
  . certain competitive bidding circumstances were present.
 
Director Liability And Indemnification
 
  Rubbermaid. Under Ohio law, Ohio corporations are permitted to indemnify
directors, officers, employees and agents within prescribed limits, and must
indemnify them under certain circumstances. Ohio law does not authorize payment
by a corporation of judgments against a director, officer, employee or agent
after a finding of negligence or misconduct in a derivative suit absent a court
order. Indemnification is required, however, to the extent that person succeeds
on the merits. In all other cases, if it is determined that a director, officer
, employee or agent acted in good faith and in a manner
 
                                       85
 
                                                COMPARISON OF STOCKHOLDER RIGHTS


 
he or she reasonably believed to be in or not opposed to the best interests of
the corporation, indemnification is discretionary, except as otherwise
provided by a corporation's articles of incorporation or code of regulations,
or by contract, except with respect to the advancement of expenses of
directors. The statutory right to indemnification is not exclusive in Ohio,
and Ohio corporations may, among other things, purchase insurance to indemnify
those persons. Rubbermaid's code of regulations provides for the purchase of
this insurance.
 
  Ohio law provides that a director is entitled to mandatory advancement of
expenses, including attorneys' fees, incurred in defending any action,
including derivative actions, brought against the director. The director must
agree, however, to cooperate with the corporation concerning the matter and to
repay the amount advanced if it is proved by clear and convincing evidence
that his or her act or failure to act was done with deliberate intent to cause
injury to the corporation or with reckless disregard for the corporation's
best interests.
 
  Rubbermaid's code of regulations provides for indemnification by Rubbermaid
to the fullest extent expressly permitted by Ohio law of any person made or
threatened to be made a party to any action, suit, or proceeding by reason of
the fact that he or she is or was a director, officer, employee or agent of
Rubbermaid or of any other corporation for which he or she was serving as a
director, officer, employee or agent at the request of Rubbermaid.
 
  Newell. Delaware law allows a Delaware corporation to include in its
certificate of incorporation, and Newell's certificate of incorporation
contains, a provision eliminating the liability of a director for monetary
damages for a breach of his or her fiduciary duties as a director, except
liability:
 
  . for any breach of the director's duty of loyalty to Newell or its
    stockholders;
 
  . for acts or omissions not in good faith or which involve intentional
    misconduct or knowing violation of law;
 
  . under Section 174 of the Delaware law, which deals generally with
    unlawful payments of dividends, stock repurchases and redemptions; and
 
  . for any transaction from which the director derived an improper personal
    benefit.
 
  Newell's bylaws provide for indemnification of Newell's current or former
directors or officers to the fullest extent permitted by Delaware law and
provide for the same indemnity for current or former employees or agents of
Newell at the discretion of the Newell Board. Delaware law permits a
corporation to indemnify an officer, director, employee or agent for fines,
judgments or settlements, as well as expenses in the context of actions other
than derivative actions, if that person acted in good faith and in a manner he
or she reasonably believed to be in good faith or not opposed to the best
interests of the corporation or, in the case of a criminal proceeding, if that
person had no reasonable cause to believe that his or her conduct was
unlawful. Indemnification against expenses incurred by a director, officer,
employee or agent in connection with a proceeding against that person for
actions in that capacity is mandatory to the extent that that person has been
successful on the merits. If a director, officer, employee or agent is
determined to be liable to the corporation, indemnification for expenses is
not permitted, subject to limited exceptions when a court deems the award of
expenses appropriate.
 
  Delaware law grants express power to a Delaware corporation to purchase
liability insurance for its directors, officers, employees and agents,
regardless of whether any of those persons is otherwise eligible for
indemnification by the corporation. Newell's certificate of incorporation and
bylaws also permit the purchase of this insurance. Advancement of expenses is
permitted, but a person receiving advances must repay those expenses if it is
ultimately determined that he or she is not entitled to indemnification.
 
                                      86
 
COMPARISON OF STOCKHOLDER RIGHTS


 
 
Removal of Directors
 
  Rubbermaid. Ohio law provides that, unless the governing documents of a
corporation provide otherwise, directors may be removed, with or without cause,
by the affirmative vote of the holders of a majority of the voting power of the
corporation with respect to the election of directors. However, unless all the
directors or all the directors of a particular class are removed, no individual
director may be removed if the votes of a sufficient number of shares are cast
against that director's removal which, if cumulatively voted at an election of
all the directors, or all the directors of a particular class, as the case may
be, would be sufficient to elect at least one director. Rubbermaid's code of
regulations provide that a director may be removed by the Rubbermaid Board if:
 
  . by order of court a director has been found to be of unsound mind, or if
    he or she is adjudicated bankrupt; or
 
  . within sixty days from the date of election, the director does not qualify
    by accepting in writing his or her election or by acting at a meeting of
    the Rubbermaid Board.
 
  Newell. Delaware law provides that directors may be removed from office with
or without cause, by the holders of a majority of the voting power of all
outstanding voting stock, provided that if a corporation has a classified
board, stockholders may effect a director's removal only for cause, unless its
certificate of incorporation provides otherwise. Newell's certificate of
incorporation does provide for a classified board and does not provide for the
removal of directors.
 
Special Meetings of Stockholders
 
  Rubbermaid. Under Ohio law, a special meeting of stockholders may be called
by the chairman, the president, the directors by action at a meeting, a
majority of the directors voting without a meeting, persons owning 25% of the
outstanding shares entitled to vote at that meeting, or a less or greater
proportion as specified in the articles or regulations but not greater than
50%, or the person(s) authorized to do so by the articles of incorporation or
the code of regulations. Rubbermaid's code of regulations provide that special
meetings of stockholders may be called by the Chairman of the Rubbermaid Board,
the President or a Vice President of Rubbermaid, a majority of the directors
acting with or without a meeting or by persons who hold not less than 50% of
all shares entitled to vote at that stockholders' meeting.
 
  Newell. Under Delaware law, special stockholder meetings may be called by the
board of directors and by any person authorized by the certificate of
incorporation or the bylaws. Newell's bylaws provide that a special meeting of
the stockholders may be called only by the Chairman of the Newell Board, by the
Newell Board or by the President of Newell.
 
Certain Business Combinations
 
  Rubbermaid. Ohio law permits mergers without approval by stockholders of the
surviving corporation if, among other things, no amendment of the articles of
incorporation is involved and no more than a specified maximum increase in
outstanding voting stock will result. Under Ohio law, the maximum permitted
increase is any amount less than one-sixth of a corporation's resulting shares
possessing voting power in the election of directors.
 
  Rubbermaid's articles of incorporation provide that the affirmative vote of
the holders of shares entitled to exercise 85% of the voting power of the
corporation and the affirmative vote of the holders of 85% of the common stock
at the time outstanding must vote to approve a business combination transaction
with a "related corporation." In general, a "related corporation," for purposes
of this provision, includes any person that is the beneficial owner of 25% or
more of the voting capital stock of Rubbermaid. Rubbermaid's articles of
incorporation do not include any provision governing the approval of business
combinations with unrelated corporations, and accordingly the matter is
governed by Ohio law. Under Ohio law, unless otherwise provided in the articles
of incorporation, any merger,
 
                                       87
 
                                                COMPARISON OF STOCKHOLDER RIGHTS


 
consolidation or sale of substantially all of the assets of the corporation
requires the approval of the holders of shares entitling them to exercise at
least two-thirds of the voting power.
 
  Newell. Delaware law generally requires approval of any merger,
consolidation or sale of substantially all the assets of a corporation by a
vote of the holders of a majority of all outstanding shares entitled to vote
thereon, although the certificate of incorporation may provide for a greater
vote.
 
  Newell's certificate of incorporation includes specific provisions with
respect to mergers and other business combinations. In general, these
provisions require that, in the case of a proposed merger or other business
combination involving Newell and an "interested stockholder," which includes,
among other things, the beneficial owner of 5% or more of the voting power of
the outstanding voting power of Newell, the approving vote of the holders of
at least 75% of all shares of Newell's voting stock is required to approve
that transaction, unless the business combination has been approved by a
majority of directors not affiliated with the interested stockholder or unless
certain conditions regarding minimum price and procedural protections are met
with respect to Newell's then outstanding voting stock.
 
Authorized Capital
 
  Rubbermaid. The authorized capital stock of Rubbermaid consists of
400,000,000 shares of common stock, par value $1.00 per share, and 20,000,000
shares of preferred stock without par value.
 
  Newell. The authorized capital stock of Newell consists of 400,000,000
shares of common stock, par value $1.00 per share, and 10,000,000 shares of
preferred stock. The 10,000,000 authorized shares of preferred stock consist
of 9,990,000 shares with a par value of $1.00 per share and 10,000 shares
without par value. Newell currently anticipates seeking an increase in its
authorized capital stock at its 1999 Annual Meeting of Stockholders.
 
  Delaware law and Ohio law provide that the governing documents of a
corporation may authorize the corporation's board of directors to issue,
without stockholder approval, a series of preferred or preference stock and to
designate the rights, preferences, privileges and restrictions of that stock.
Ohio law, however, does not permit the board of directors to fix the voting
rights of any series of preferred or preference stock.
 
Number of Directors
 
  Rubbermaid. Under Ohio law, the number of directors may be fixed or changed
by the stockholders or by the directors if so authorized by the articles of
incorporation or code of regulations. Rubbermaid's code of regulations provide
that the number of directors on the Rubbermaid Board shall be at least nine,
and may be increased by Rubbermaid's stockholders. The Rubbermaid Board, at a
meeting or by action without a meeting, may increase or decrease the number of
directors authorized to serve on the Rubbermaid Board, but by no more than
two. The Rubbermaid Board currently consists of 12 directors.
 
  Newell. Under Delaware law, unless the certificate of incorporation
specifies the number of directors, a board of directors may change the
authorized number of directors by an amendment to the corporation's bylaws if
fixed in the bylaws, or in such manner as may be provided in the corporation's
bylaws. If the certificate of incorporation specifies the number of directors,
then that number can be changed only by amending the certificate of
incorporation. Newell's certificate of incorporation does not specify the
number of directors authorized to serve on the Newell Board. Newell's bylaws
currently provide that the number of directors on the Newell Board shall be
eleven, and the Newell Board currently consists of 11 directors. Under the
merger agreement, at the time of
 
                                      88
 
COMPARISON OF STOCKHOLDER RIGHTS


 
the merger, six members of the Rubbermaid Board will be appointed to the Newell
Board, and Newell will amend its bylaws to provide that the size of the Newell
Board will be increased to 15 directors.
 
Newly Created Directorships and Vacancies
 
  Rubbermaid. Ohio law provides that, unless the governing documents of a
corporation provide otherwise, vacancies on the board of directors may be
filled by a majority of the remaining directors of a corporation. Rubbermaid's
code of regulations provide for the filling of board seats when they are newly
created or vacated. The number of directors may be increased by up to two
directors by the Rubbermaid Board, or by any number of directors by a vote of
two-thirds of the shares permitted to vote. A vacancy is deemed to exist when
the stockholders vote to increase the authorized number of directors but fail
at the meeting at which the increase is authorized to elect additional
directors. Any vacancy on the Rubbermaid Board may be filled for the unexpired
term by the remaining directors or director, though less than a majority of the
whole Rubbermaid Board, by a vote of two-thirds of the Rubbermaid Board.
 
  Newell. Delaware law provides that, unless the governing documents of a
corporation provide otherwise, vacancies and newly created directorships
resulting from a resignation or any increase in the authorized number of
directors elected by all of the stockholders having a right to vote as a single
class may be filled by a majority of the directors then in office. Newell's
certificate of incorporation provides for the same process of filling vacancies
and newly created directorships as Delaware law, and provides that any director
so chosen will hold office until the annual meeting for the year in which the
director's term expires and until his or her successor has been elected or
qualified.
 
Committees of the Board of Directors
 
  Rubbermaid. Rubbermaid's code of regulations allows for the creation of an
executive committee and other committees the Rubbermaid Board deems advisable.
All committees are to be comprised of not fewer than three Board members. The
chairman of the executive committee is elected by the Rubbermaid Board. Each
committee is delegated its powers and duties as determined by the Rubbermaid
Board, and may act by majority vote at a meeting or in writing.
 
  Newell. Newell's bylaws allow for the creation of committees by a majority
vote of the Newell Board. All committees are to be comprised of at least two
Board members, and may have one or more members designated as alternates. If a
committee member is disqualified with respect to any matter, the non-
disqualified Board members may appoint another member to act for the absent or
disqualified member on that matter. Each committee shall have the rights
provided to it by the resolution creating it or as provided by Newell's bylaws,
subject to the limitations of Delaware law.
 
Share Purchase Rights Plans
 
  Rubbermaid. In June 1996, Rubbermaid adopted a Rights Agreement and issued,
as a dividend, one common share purchase right for each outstanding share of
Rubbermaid common stock. One Rubbermaid purchase right has also been issued
with respect to each share of Rubbermaid common stock issued since the record
date of that dividend.
 
  Each Rubbermaid purchase right entitles the holder to buy one share of
Rubbermaid common stock at a price of $125 per share of Rubbermaid common
stock, subject to adjustment. The Rubbermaid purchase rights will be
exercisable only if a person or group acquires 10% or more of the outstanding
shares of Rubbermaid common stock or announces a tender or exchange offer
following which it would hold 10% or more of the outstanding shares of common
stock of Rubbermaid. In some cases, a person or group that acquires less than
15% of the outstanding shares of Rubbermaid common stock will not make the
Rubbermaid purchase rights exercisable merely because of that ownership.
 
                                       89
 
                                                COMPARISON OF STOCKHOLDER RIGHTS


 
Those cases include ownership by certain institutional investors, individuals
or groups that have indicated by public filings made pursuant to the Federal
securities laws that they do not have an intention to, or reserve the right
to, control or influence Rubbermaid. If a person or a group acquires 15% or
more of the outstanding shares of Rubbermaid common stock, or acquires 10% or
more and engages in specified self-dealing transactions or merges into
Rubbermaid in a transaction in which Rubbermaid's common stock is not changed
or exchanged, each holder of a Rubbermaid purchase right will receive, upon
exercise of each purchase right, shares of Rubbermaid common stock with a
market value of two times the exercise price of the purchase right, except
that purchase rights owned by that person or group will be void. In the event
Rubbermaid is acquired in a merger or other business combination or 50% or
more of its assets or earning power is sold, each holder of a Rubbermaid
purchase right will receive, upon exercise, common stock of Rubbermaid or of
the acquiring company, in either case with a market value of two times the
exercise price of the purchase right. Rubbermaid may redeem the purchase
rights at a price of $.01 per purchase right prior to the time the purchase
rights become exercisable. The purchase rights will expire on June 24, 2006,
unless earlier redeemed or exchanged by the Rubbermaid Board. In connection
with the negotiation of the merger agreement, Newell and Rubbermaid agreed
that the Rubbermaid Board would amend Rubbermaid's Rights Agreement prior to
signing the merger agreement to permit the merger to be completed and to cause
Rubbermaid's purchase rights to expire immediately prior to the merger. The
Rubbermaid Board adopted that amendment on October 20, 1998.
 
  Newell. In August 1998, Newell adopted a Share Purchase Rights Plan and
issued, as a dividend, one common share purchase right for each outstanding
share of Newell common stock. Each share of Newell common stock issued since
the date of that dividend also includes one Newell purchase right, including
shares to be issued in connection with the merger, except in the unlikely
event that the purchase rights are redeemed or separately certificated prior
to the merger. Newell's Rights Plan generally updates a prior rights plan that
has since expired.
 
  Each Newell purchase right entitles the holder to buy one share of Newell
common stock at a price of $200 per share, subject to adjustment. The Newell
purchase rights will be exercisable only if a person or group acquires 15% or
more of the outstanding Newell common stock or announces a tender or exchange
offer following which it would hold 15% or more of Newell's outstanding common
stock. If a person or group acquires 15% or more of the outstanding Newell
common stock, each holder of a Newell purchase right will receive, upon
exercise, shares of Newell common stock with a market value two times the
exercise price of a Newell purchase right, except that purchase rights owned
by that person or group will be void. If, following an acquisition by a person
or group of 15% or more of the outstanding shares of Newell common stock,
Newell was acquired in a merger or other business combination, each Newell
purchase right would be exercisable for shares of Newell common stock or that
number of the acquiring company's shares of common stock, in each case, having
a market value of two times the exercise price of the Newell purchase right.
Newell may redeem its purchase rights at a price of $.001 per purchase right
prior to the time that a person or group acquires 15% of the outstanding
Newell common stock and becomes an Acquiring Person as described in Newell's
Rights Plan. The Newell purchase rights will expire on October 31, 2008.
 
Dividends
 
  Both Delaware law and Ohio Law provide that dividends may be paid in cash,
property or shares of a corporation's capital stock. Delaware law provides
that a corporation may pay dividends out of any surplus, and, if it has no
surplus, out of any net profits for the fiscal year. Dividends may not be
paid, however, if their payment reduces the corporation's capital below the
amount of capital represented by all classes of shares having a preference
upon the distribution of assets. Ohio Law provides that a corporation may pay
dividends out of surplus and must notify its shareholders if a dividend is
paid out of capital surplus.
 
                                      90
 
COMPARISON OF STOCKHOLDER RIGHTS


 
                      WHERE YOU CAN FIND MORE INFORMATION
 
  We each file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy any reports, statements or other information we file at the Securities and
Exchange Commission's public reference rooms at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549, as well as at the Securities and Exchange
Commission's regional offices at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of these materials may also be obtained from the Securities and Exchange
Commission at prescribed rates by writing to the Public Reference Section of
the Securities and Exchange Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549. Please call the Securities and Exchange Commission at 1-800-SEC-
0330 for further information on the public reference rooms. Our filings are
also available to the public from commercial document retrieval services and at
the web site maintained by the Securities and Exchange Commission at
"http: //www.sec.gov."
 
  Newell has filed with the Securities and Exchange Commission an S-4
registration statement with respect to the Newell common stock to be issued to
holders of Rubbermaid common stock under the merger agreement. This joint proxy
statement/prospectus constitutes the prospectus of Newell that is filed as part
of the registration statement. Other parts of the registration statement are
omitted from this joint proxy statement/prospectus in accordance with the rules
and regulations of the Securities and Exchange Commission. Copies of the
registration statement, including exhibits, may be inspected, without charge,
at the offices of the Securities and Exchange Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and copies may be obtained from the Securities
and Exchange Commission at prescribed rates.
 
  The Securities and Exchange Commission permits us to "incorporate by
reference" information into this joint proxy statement/prospectus, which means
that we can disclose important information to you by referring you to another
document filed separately with the Securities and Exchange Commission. The
following documents previously filed with the Securities and Exchange
Commission by Newell (Commission File Number 1-9608) are incorporated by
reference into this joint proxy statement/prospectus:
 
   1. Newell's Annual Report on Form 10-K, Form 10-K/A No. 1 and Form 10-K/A
      No. 2 for the fiscal year ended December 31, 1997;
 
   2. Newell's Current Report on Form 8-K filed with the Securities and
      Exchange Commission on March 4, 1998 relating to the sale of shares of
      common stock of Black & Decker Corporation held by Newell;
 
   3. Newell's Quarterly Report on Form 10-Q and Form 10Q/A No. 1 for the
      quarterly period ended March 31, 1998;
 
   4. Newell's Current Report on Form 8-K filed with the Securities and
      Exchange Commission on May 12, 1998 relating to Newell's acquisition of
      Calphalon Corporation;
 
   5. Newell's Proxy Statement relating to the Annual Meeting of Stockholders
      of Newell held on May 13, 1998;
 
   6. Newell's Quarterly Report on Form 10-Q and Form 10Q/A No. 1 for the
      quarterly period ended June 30, 1998;
 
   7. Newell's Current Report on Form 8-K filed with the Securities and
      Exchange Commission on July 10, 1998 relating to a Terms Agreement
      entered into by Newell in connection with its public offering of a
      series of Medium-Term Notes;
 
   8. Newell's Current Report on Form 8-K filed with the Securities and
      Exchange Commission on August 28, 1998 relating to the adoption by
      Newell of a new Rights Agreement and the declaration by Newell of a
      Rights dividend;
 
                                       91
 
                                                               OTHER INFORMATION


 
 
   9. Newell's Quarterly Report on Form 10-Q for the quarterly period ended
      September 30, 1998;
 
  10. Newell's Current Report on Form 8-K filed with the Securities and
      Exchange Commission on October 21, 1998 relating to the execution of
      the merger agreement;
 
  11. Newell's Current Report on Form 8-K filed with the Securities and
      Exchange Commission on November 17, 1998 relating to Newell's audited
      consolidated financial statements included as an exhibit to the Report
      which were filed to reflect Newell's 1998 acquisition of Calphalon
      Corporation as a pooling of interests;
 
  12. Newell's Current Report on Form 8-K and Form 8-K/A filed with the
      Securities and Exchange Commission on November 23, 1998 and December 1,
      1998, respectively, relating to Rubbermaid's historical financial
      statements and pro forma financial information;
 
  13. The description of the Newell common stock contained in Newell's
      Registration Statement on Form 8-B filed with the Securities and
      Exchange Commission on June 30, 1987; and
 
  14. The description of Newell's Rights contained in Newell's Registration
      Statement on Form 8-A12B dated August 28, 1998.
 
  The following documents previously filed with the Securities and Exchange
Commission by Rubbermaid (Commission File Number 1-4188) are incorporated by
reference into this joint proxy statement/prospectus:
 
  1. Rubbermaid's Annual Report on Form 10-K for the fiscal year ended
     December 31, 1997;
 
  2. Rubbermaid's Quarterly Report on Form 10-Q for the quarterly period
     ended April 3, 1998;
 
  3. Rubbermaid's Proxy Statement relating to the Annual Meeting of
     Shareholders of Rubbermaid held on April 28, 1998;
 
  4. Rubbermaid's Quarterly Report on Form 10-Q for the quarterly period
     ended July 3, 1998;
     
  5. Rubbermaid's Quarterly Report on Form 10-Q and Form 10-Q/A for the
     quarterly period ended October 2, 1998;     
 
  6. Rubbermaid's Current Report on Form 8-K filed with the Securities and
     Exchange Commission on October 21, 1998 relating to the execution of the
     merger agreement; and
 
  7. Rubbermaid's Registration Statement on Form 8-A12B/A filed with the
     Securities and Exchange Commission on October 22, 1998.
 
  We are also incorporating by reference additional documents that we file
with the Commission between the date of this joint proxy statement/prospectus
and the date of the special meetings.
 
  If you are a Newell or Rubbermaid stockholder, you can obtain any of the
documents incorporated by reference through us or the Securities and Exchange
Commission. Documents incorporated by reference are available from us without
charge, excluding all exhibits unless we have specifically incorporated by
reference an exhibit in this joint proxy statement/prospectus. You may obtain
documents incorporated by reference in this joint proxy statement/prospectus
by requesting them in writing or by telephone from the appropriate party at
the following address or telephone number:
 
  Newell Co.                                      Rubbermaid Incorporated
  6833 Stalter Drive                              1147 Akron Road
  Suite 101                                       Wooster, Ohio 44691
  Rockford, Illinois 61108                        Tel: 1-330-264-6464 ext.
  Tel: 1-800-424-1941                             5342
  Attn: Office of Investor Relations              Attn: Office of Investor
                                                  Relations
   
  If you would like to request documents from us, please do so by February 26,
1999, to receive them before the special meetings.     
 
                                      92
 
OTHER INFORMATION


 
   
  You should rely only on the information contained or incorporated by
reference in this joint proxy statement/prospectus to vote on the proposal(s)
presented at your special stockholders' meeting. We have not authorized anyone
to provide you with information that is different from what is contained in
this joint proxy statement/prospectus. This joint proxy statement/prospectus is
dated February 5, 1999. You should not assume that the information contained in
this joint proxy statement/prospectus is accurate as of any date other than
that date, and neither the mailing of this joint proxy statement/prospectus to
you nor the issuance of Newell common stock in the merger shall create any
implication to the contrary.     
 
  This joint proxy statement/prospectus is being furnished:
 
    (1) to Rubbermaid stockholders in connection with the solicitation of
  proxies by the Rubbermaid Board for use at Rubbermaid's special meeting.
  Each copy of this joint proxy statement/prospectus mailed to Rubbermaid
  stockholders is accompanied by a form of proxy for use at Rubbermaid's
  special meeting. This joint proxy statement/prospectus also serves as a
  prospectus for holders of Rubbermaid common stock in connection with the
  Newell common stock to be issued upon completion of the merger; and
 
    (2) to Newell stockholders in connection with the solicitation of proxies
  by the Newell Board for use at Newell's special meeting. Each copy of this
  joint proxy statement/prospectus mailed to Newell stockholders is
  accompanied by a form of proxy for use at Newell's special meeting.
 
  Newell has supplied all information contained or incorporated by reference in
this joint proxy statement/prospectus relating to Newell, and Rubbermaid has
supplied all such information relating to Rubbermaid.
 
                                    EXPERTS
 
  The consolidated financial statements of Newell set forth in Newell's Current
Report on Form 8-K, dated November 17, 1998, have been audited by Arthur
Andersen LLP, independent accountants, as stated in their report in the Form 8-
K thereon and incorporated by reference in this document. Those consolidated
financial statements have been incorporated by reference in this document and
in Newell's S-4 registration statement of which this document forms a part in
reliance upon Arthur Andersen LLP's report given upon the authority of that
firm as experts in accounting and auditing.
 
  The consolidated financial statements of Rubbermaid as of December 31, 1997
and 1996, and for each of the years in the three-year period ended December 31,
1997, have been incorporated by reference in this document and in Newell's S-4
registration statement of which this document forms a part in reliance upon the
report of KPMG LLP, independent certified public accountants, incorporated by
reference in this document, and upon the authority of that firm as experts in
accounting and auditing.
 
                                 LEGAL MATTERS
 
  Certain legal matters relating to the validity of the Newell common stock
issuable in connection with the merger and certain federal income tax matters
relating to the merger will be passed upon for Newell by Schiff Hardin & Waite,
Chicago, Illinois. Schiff Hardin & Waite has advised Newell that a member of
the firm participating in the representation of Newell in connection with this
joint proxy statement/prospectus owns approximately 3,900 shares of Newell
common stock. Certain legal matters relating to federal income tax matters
relating to the merger will be passed upon for Rubbermaid by Jones, Day, Reavis
& Pogue, Cleveland, Ohio.
 
                                       93
 
                                                               OTHER INFORMATION


 
 
                        INDEPENDENT PUBLIC ACCOUNTANTS
 
  Representatives of Arthur Andersen LLP will be present at Newell's special
meeting, and representatives of KPMG LLP will be present at Rubbermaid's
special meeting. In each case, these representatives will have the opportunity
to make a statement if they desire to do so and are expected to be available
to respond to appropriate questions.
 
                         FUTURE STOCKHOLDER PROPOSALS
 
  Stockholder proposals intended to be presented at the 1999 Annual Meeting of
Stockholders of Newell must have been received by the Corporate Secretary of
Newell not later than November 19, 1998 for inclusion in the proxy materials
for that meeting.
 
  Due to the contemplated consummation of the merger, Rubbermaid does not
currently expect to hold a 1999 Annual Meeting of Stockholders because,
following the merger, Rubbermaid will not be a publicly traded company. In the
event that the merger is not consummated and Rubbermaid's annual meeting is
held on its assigned date, to be eligible for inclusion in Rubbermaid's proxy
statement and form of proxy relating to that meeting, proposals of
stockholders of Rubbermaid must have been received by Rubbermaid no later than
November 13, 1998. In the event that the merger is not consummated and
Rubbermaid's 1999 Annual Meeting of Stockholders is delayed, proposals of
stockholders intended to be presented at that meeting must be received by
Rubbermaid within a reasonable time after Rubbermaid announces publicly the
date of the meeting and before Rubbermaid mails its proxy statement to
stockholders in connection with the meeting.
 
                FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE
 
  Newell and Rubbermaid have made statements in this document and in documents
that are incorporated by reference in this document that constitute forward-
looking statements, as that term is defined in the Securities Reform Act of
1995. These statements are subject to risks and uncertainties. Forward-looking
statements include information concerning possible or assumed future results
of operations of Newell, Rubbermaid or the combined company. These statements
may relate to, but are not limited to, information or assumptions about sales,
income, earnings per share, return on equity, capital expenditures, dividends,
capital structure, free cash flow, debt to capitalization ratios, interest
rates, internal growth rates, the Year 2000 plans and related risks, pending
legal proceedings and claims (including environmental matters), future
economic performance, operating income improvements, synergies, management's
plans, goals and objectives for future operations and growth. These forward-
looking statements generally are accompanied by words such as "intend,"
"anticipate," "believe," "estimate," "project," "expect," "should" or similar
expressions. You should understand that forward-looking statements are not
guarantees since there are inherent difficulties in predicting future results.
Actual results could differ materially from those expressed or implied in the
forward-looking statements. Factors that could cause actual results to differ
include, but are not necessarily limited to, those discussed below and in the
documents referred to in this document. In addition, there can be no assurance
that:
 
  . we have correctly identified and assessed all of the factors affecting
    Newell's or Rubbermaid's businesses;
 
  . the publicly available and other information with respect to these
    factors on which we have based our analysis is complete or correct;
 
  . our analysis is correct; or
 
  . our strategies, which are based in part on this analysis, will be
    successful.
 
                                      94
 
OTHER INFORMATION


 
 
  Retail Economy. Our businesses depend on the strength of the retail economies
in various parts of the world, primarily in the U.S. and to a lesser extent in:
 
  . Asia, including Australia and New Zealand;
 
  . Canada;
 
  . Europe, including the Middle East and Africa; and
 
  . Latin America, including Mexico and Central America.
 
These retail economies are affected by such factors as consumer demand, the
conditions of the consumer products retail industry and weather conditions. In
recent years, the consumer products retail industry has been characterized by
intense competition and consolidation among both product suppliers and
retailers.
 
  Nature of the Marketplace. We compete with numerous other manufacturers and
distributors of consumer products, many of which are large and well-
established. In addition, our principal customers are volume purchasers, many
of which are much larger than us and have strong bargaining power with
suppliers, which limits our ability to recover cost increases through increased
selling prices. The rapid growth of large mass merchandisers, such as discount
stores, warehouse clubs, home centers and office superstores, together with
changes in consumer shopping patterns, have contributed to a significant
consolidation of the consumer products retail industry and the formulation of
dominant multi-category retailers. Other trends among retailers are to require
manufacturers to supply innovative new products, maintain or reduce product
prices or deliver products with shorter lead times, or for the retailer to
import generic products directly from foreign sources. The combination of these
market influences has created an intensely competitive environment in which our
principal customers continuously evaluate which product suppliers to use,
resulting in pricing pressures and the need for ongoing improvements in
customer service.
 
  Growth by Acquisition. The acquisition of companies that sell branded, staple
consumer product lines to volume purchasers is one of the foundations of
Newell's and Rubbermaid's growth strategies. The ability of Newell to continue
to make sufficient strategic acquisitions at reasonable prices and to integrate
the acquired businesses profitably within a reasonable period of time are
important factors in Newell's future earnings growth.
 
  Foreign Operations. Foreign operations, which include manufacturing in
Canada, Mexico, Brazil, Colombia, Venezuela and many countries in Europe, and
importing products from the Far East, increasingly are becoming important to
our businesses. Foreign operations can be affected by factors such as currency
devaluation and other currency fluctuations, tariffs, nationalization, exchange
controls, interest rates, limitations on foreign investment in local businesses
and other political, economic, regulatory risks and difficulties as well as by
delays in business expansion outside the U.S.
 
  Integration of Rubbermaid. After the merger, Newell will commence the process
of integrating Rubbermaid's businesses into those of Newell. The ability of
Newell to integrate these businesses successfully, given the size of Rubbermaid
and the differences in corporate cultures, as well as to fully realize
anticipated operating income improvements, are important factors in Newell's
future earnings growth.
 
                                       95
 
                                                               OTHER INFORMATION


 
                                                                         ANNEX A
 
                          AGREEMENT AND PLAN OF MERGER
 
                                 by and between
 
                                  NEWELL CO.,
 
                                ROOSTER COMPANY
 
                                      and
 
                            RUBBERMAID INCORPORATED
 
                          Dated as of October 20, 1998
 
                                                                         ANNEXES


 
                               TABLE OF CONTENTS
 



                                                                            PAGE
                                                                            ----
                                   ARTICLE 1
 
                                   THE MERGER
 
                                                                      
 Section 1.1 The Merger...................................................  A-1
 Section 1.2 Closing......................................................  A-1
 Section 1.3 Effective Time...............................................  A-2
 Section 1.4 Effects of the Merger........................................  A-2
 Section 1.5 Articles of Incorporation and Code of Regulations............  A-2
 Section 1.6 Directors and Officers of the Surviving Corporation..........  A-2
 
                                   ARTICLE 2
 
   EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS;
                            EXCHANGE OF CERTIFICATES
 
 Section 2.1 Effect on Capital Stock......................................  A-2
         (a) Cancellation of Treasury Stock and Company-Owned Stock.......  A-2
         (b) Conversion of Company Common Stock...........................  A-2
         (c) Capital Stock of Merger Sub..................................  A-3
 Section 2.2 Exchange of Certificates.....................................  A-3
         (a) Exchange Agent...............................................  A-3
         (b) Exchange Procedures..........................................  A-3
         (c) Distributions with Respect to Unexchanged Shares.............  A-3
         (d) No Further Ownership Rights in Company Common Stock..........  A-4
         (e) No Fractional Shares.........................................  A-4
         (f) Termination of Exchange Fund.................................  A-4
         (g) No Liability.................................................  A-5
         (h) Investment of Exchange Fund..................................  A-5
         (i) Lost Certificates............................................  A-5
 Section 2.3 Certain Adjustments..........................................  A-5
 Section 2.4 Dissenters' Rights...........................................  A-5
 Section 2.5 Further Assurances...........................................  A-5
 
                                   ARTICLE 3
 
                         REPRESENTATIONS AND WARRANTIES
 
 Section 3.1 Representations and Warranties of the Company................  A-6
         (a) Organization, Standing and Corporate Power...................  A-6
         (b) Subsidiaries.................................................  A-6
         (c) Capital Structure............................................  A-6
         (d) Authority; Noncontravention..................................  A-7
         (e) Reports; Undisclosed Liabilities.............................  A-8
         (f) Information Supplied.........................................  A-8
         (g) Absence of Certain Changes or Events.........................  A-9
         (h) Compliance with Applicable Laws; Litigation..................  A-9


 
                                      A-i
 
                                                                         ANNEXES


 



                                                                            PAGE
                                                                            ----
                                                                      
         (i) Absence of Changes in Benefit Plans..........................  A-10
         (j) ERISA Compliance.............................................  A-10
         (k) Taxes........................................................  A-12
         (l) Voting Requirements..........................................  A-12
         (m) State Takeover Statutes......................................  A-12
         (n) Accounting Matters...........................................  A-13
         (o) Brokers......................................................  A-13
         (p) Ownership of Acquiror Capital Stock..........................  A-13
         (q) Certain Contracts............................................  A-13
         (r) The Company Rights Agreement.................................  A-13
         (s) Opinion of Financial Advisor.................................  A-13
         (t) Environmental Matters........................................  A-13
         (u) Intellectual Property........................................  A-15
 Section 3.2 Representations and Warranties of Acquiror and Merger Sub....  A-15
         (a) Capitalization of Merger Sub.................................  A-15
         (b) Organization, Standing and Corporate Power...................  A-15
         (c) Subsidiaries.................................................  A-16
         (d) Capital Structure............................................  A-16
         (e) Authority; Noncontravention..................................  A-17
         (f) Reports; Undisclosed Liabilities.............................  A-18
         (g) Information Supplied.........................................  A-18
         (h) Absence of Certain Changes or Events.........................  A-18
         (i) Compliance with Applicable Laws; Litigation..................  A-19
         (j) Absence of Changes in Benefit Plans..........................  A-19
         (k) ERISA Compliance.............................................  A-20
         (l) Taxes........................................................  A-21
         (m) Voting Requirements..........................................  A-22
         (n) State Takeover Statutes......................................  A-22
         (o) Accounting Matters...........................................  A-22
         (p) Brokers......................................................  A-22
         (q) Ownership of the Company Capital Stock.......................  A-22
         (r) Certain Contracts............................................  A-22
         (s) Opinion of Financial Advisor.................................  A-22
         (t) Environmental Matters........................................  A-23
         (u) Intellectual Property........................................  A-23
 
                                   ARTICLE 4
 
                   COVENANTS RELATING TO CONDUCT OF BUSINESS
 
 Section 4.1 Conduct of Business..........................................  A-24
        (a)  Conduct of Business by the Company...........................  A-24
        (b)  Conduct of Business by Acquiror..............................  A-25
        (c)  Coordination of Dividends....................................  A-27
        (d)  Other Actions................................................  A-27
        (e)  Advice of Changes............................................  A-27
        (f)  Control of Other Party's Business............................  A-27
 Section 4.2 No Solicitation by the Company...............................  A-27
 Section 4.3 No Solicitation by Acquiror..................................  A-29


 
                                      A-ii
 
ANNEXES


 



                                                                            PAGE
                                                                            ----
 
                                   ARTICLE 5
 
                             ADDITIONAL AGREEMENTS
 
                                                                      
 Section 5.1  Preparation of the Form S-4 and the Joint Proxy Statement;
               Stockholders Meetings.....................................   A-31
 Section 5.2  Letters of the Company's Accountants.......................   A-32
 Section 5.3  Letters of Acquiror's Accountants..........................   A-32
 Section 5.4  Access to Information; Confidentiality.....................   A-32
 Section 5.5  Reasonable Best Efforts; Cooperation.......................   A-33
 Section 5.6  Stock Options, Restricted Stock and Employment Agreements..   A-34
 Section 5.7  Indemnification............................................   A-35
 Section 5.8  Fees and Expenses..........................................   A-36
 Section 5.9  Public Announcements.......................................   A-37
 Section 5.10 Affiliates.................................................   A-37
 Section 5.11 NYSE Listing...............................................   A-38
 Section 5.12 Stockholder Litigation.....................................   A-38
 Section 5.13 Tax Treatment..............................................   A-38
 Section 5.14 Pooling of Interests.......................................   A-38
 Section 5.15 Standstill Agreements; Confidentiality Agreements..........   A-38
 Section 5.16 Employee Benefit Plans.....................................   A-38
 Section 5.17 Post-Merger Operations.....................................   A-39
 Section 5.18 Acquiror Corporate Office..................................   A-39
 Section 5.19 Acquiror Board of Directors; Acquiror Officers.............   A-39
 
                                   ARTICLE 6
 
                              CONDITIONS PRECEDENT
 
 Section 6.1  Conditions to Each Party's Obligation to Effect the Merger.   A-40
         (a)  Stockholder Approvals......................................   A-40
         (b)  Governmental and Regulatory Approvals......................   A-40
         (c)  No Injunctions or Restraints...............................   A-40
         (d)  Form S-4...................................................   A-40
         (e)  NYSE Listing...............................................   A-40
         (f)  Pooling....................................................   A-40
         (g)  Dissenting Shares..........................................   A-40
         (h)  HSR Act....................................................   A-40
 Section 6.2  Conditions to Obligations of Acquiror......................   A-40
         (a)  Representations and Warranties.............................   A-41
         (b)  Performance of Obligations of the Company..................   A-41
         (c)  Tax Opinion................................................   A-41
         (d)  No Material Adverse Change.................................   A-41
 Section 6.3  Conditions to Obligations of the Company...................   A-41
         (a)  Representations and Warranties.............................   A-41
         (b)  Performance of Obligations of Acquiror.....................   A-41
         (c)  Tax Opinion................................................   A-41
         (d)  No Material Adverse Change.................................   A-41
 Section 6.4  Frustration of Closing Conditions..........................   A-41


 
                                     A-iii
 
                                                                         ANNEXES


 



                                                                            PAGE
                                                                            ----
 
                                   ARTICLE 7
 
                       TERMINATION, AMENDMENT AND WAIVER
 
                                                                      
 Section 7.1  Termination.................................................  A-42
 Section 7.2  Effect of Termination.......................................  A-42
 Section 7.3  Amendment...................................................  A-43
 Section 7.4  Extension; Waiver...........................................  A-43
 Section 7.5  Procedure for Termination, Amendment, Extension or Waiver...  A-43
 
                                   ARTICLE 8
 
                               GENERAL PROVISIONS
 
 Section 8.1  Nonsurvival of Representations and Warranties...............  A-43
 Section 8.2  Notices.....................................................  A-43
 Section 8.3  Definitions.................................................  A-44
 Section 8.4  Interpretation..............................................  A-44
 Section 8.5  Counterparts................................................  A-45
 Section 8.6  Entire Agreement; No Third-Party Beneficiaries..............  A-45
 Section 8.7  Governing Law...............................................  A-45
 Section 8.8  Assignment..................................................  A-45
 Section 8.9  Consent to Jurisdiction.....................................  A-45
 Section 8.10 Headings....................................................  A-45
 Section 8.11 Severability................................................  A-45


 
                                      A-iv
 
ANNEXES


 
                             TABLE OF DEFINED TERMS
 



TERM                                                                   SECTION
- ----                                                                  ----------
                                                                   
Acquiror.............................................................   Recitals
Acquiror Acquisition Agreement.......................................     4.3(b)
Acquiror Authorized Preferred Stock..................................     3.2(d)
Acquiror Benefit Plans...............................................     3.2(j)
Acquiror Board.......................................................    5.19(a)
Acquiror Common Stock................................................     2.1(b)
Acquiror Disclosure Schedule.........................................        3.2
Acquiror Employee Stock Options......................................     3.2(d)
Acquiror Filed SEC Documents.........................................     3.2(h)
Acquiror Intellectual Property.......................................  3.2(u)(i)
Acquiror Notice......................................................     4.3(a)
Acquiror Permits.....................................................     3.2(i)
Acquiror Rights Agreement............................................     3.2(d)
Acquiror SEC Documents...............................................     3.2(f)
Acquiror Stock Plans.................................................     3.2(d)
Acquiror Stockholder Approval........................................     3.2(m)
Acquiror Stockholder Meeting.........................................     5.1(c)
Acquiror Superior Proposal...........................................     4.3(b)
Acquiror Takeover Proposal...........................................     4.3(a)
Acquiror Termination Fee.............................................     5.8(c)
Adjusted Option......................................................     5.6(a)
Adjustment Event.....................................................        2.3
Affiliate............................................................     8.3(a)
Agreement............................................................   Recitals
Certificates.........................................................     2.2(b)
Certificate of Merger................................................        1.3
Cleanup.............................................................. 3.1(t)(iv)
Closing..............................................................        1.2
Closing Date.........................................................        1.2
Code.................................................................   Recitals
Company..............................................................   Recitals
Company Acquisition Agreement........................................     4.2(b)
Company Authorized Preferred Stock...................................     3.1(c)
Company Award........................................................     5.6(b)
Company Benefit Plans................................................     3.1(i)
Company Board........................................................    5.19(a)
Company Common Stock.................................................   Recitals
Company Disclosure Schedule..........................................        3.1
Company Employee Stock Options.......................................     3.1(c)
Company Filed SEC Documents..........................................     3.1(g)
Company Intellectual Property........................................  3.1(u)(i)
Company Notice.......................................................     4.2(a)
Company Permits......................................................     3.1(h)
Company Rights Agreement.............................................     3.1(r)
Company SEC Documents................................................     3.1(e)
Company Stock Plan...................................................     3.1(c)
Company Stockholder Approval.........................................     3.1(l)
Company Stockholders Meeting.........................................     5.1(b)
Company Superior Proposal............................................     4.2(b)


 
                                      A-v
 
                                                                         ANNEXES


 
 



TERM                                                                  SECTION
- ----                                                                ------------
                                                                 
Company Takeover Proposal..........................................       4.2(a)
Company Termination Fee............................................       5.8(b)
Confidentiality Agreement..........................................          5.4
Control............................................................       8.3(a)
Dissenting Shares..................................................       2.1(b)
Dissenting Stockholders............................................       2.1(b)
Effective Time.....................................................          1.3
Environmental Claim................................................    3.1(t)(v)
Environmental Laws.................................................   3.1(t)(vi)
ERISA..............................................................    3.1(j)(i)
ERISA Affiliate....................................................  3.1(j)(iii)
Exchange Act.......................................................       3.1(d)
Exchange Agent.....................................................       2.2(a)
Exchange Fund......................................................       2.2(a)
Exchange Ratio.....................................................       2.1(b)
Foreign Antitrust Laws.............................................       3.1(d)
Form S-4...........................................................       3.1(f)
Governmental Entity................................................       3.1(d)
Hazardous Materials................................................  3.1(t)(vii)
HSR Act............................................................       3.1(d)
Incentive Compensation.............................................      5.16(a)
Indemnified Liabilities............................................       5.7(a)
Indemnified Party(ies).............................................       5.7(a)
Joint Proxy Statement..............................................       3.1(d)
Knowledge..........................................................       8.3(b)
Liens..............................................................       3.1(b)
Material(ly).......................................................       8.3(c)
Material Adverse Change............................................       8.3(c)
Material Adverse Effect............................................       8.3(c)
Material Company Trademarks........................................    3.1(u)(i)
Merger.............................................................     Recitals
Merger Consideration...............................................       2.1(b)
Merger Sub.........................................................     Recitals
Newell Rubbermaid Inc. ............................................       5.1(c)
NYSE...............................................................   2.2(e)(ii)
OGCL...............................................................          1.1
Person.............................................................       8.3(d)
Pooling Affiliate..................................................      5.10(a)
Release............................................................ 3.1(t)(viii)
Restraints.........................................................       6.1(c)
SEC................................................................       3.1(b)
Securities Act.....................................................       3.1(e)
Subsidiary.........................................................       8.3(e)
Surviving Corporation..............................................          1.1
Takeover Statute...................................................       3.1(m)
Tax Certificates...................................................       5.5(c)
Taxes..............................................................   3.1(k)(iv)
Trust Documents....................................................       3.2(d)


 
                                      A-vi
 
ANNEXES


 
                          AGREEMENT AND PLAN OF MERGER
 
  AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of October 20,
1998, among Rubbermaid Incorporated, an Ohio corporation (the "Company"),
Newell Co., a Delaware corporation ("Acquiror"), and Rooster Company, an Ohio
corporation and a wholly owned subsidiary of Acquiror ("Merger Sub").
 
                                  WITNESSETH:
 
  WHEREAS, the respective Boards of Directors of the Company, Acquiror and
Merger Sub have approved the merger of Merger Sub with and into the Company
(the "Merger"), upon the terms and subject to the conditions set forth in this
Agreement, whereby each issued and outstanding common share, par value $1.00
per share, of the Company ("Company Common Stock"), other than Dissenting
Shares (as defined in Section 2.1(b)) and any shares owned by Acquiror, Merger
Sub or any direct or indirect subsidiary of the Company, Acquiror or Merger Sub
or any Company Common Stock held in the treasury of the Company, will be
converted into the right to receive the Merger Consideration (as defined in
Section 2.1(b));
 
  WHEREAS, the respective Boards of Directors of the Company, Acquiror and
Merger Sub have each determined that the Merger and the other transactions
contemplated hereby are consistent with, and in furtherance of, their
respective business strategies and goals;
 
  WHEREAS, the Company, Acquiror and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger;
 
  WHEREAS, for federal income tax purposes, it is intended that the Merger will
qualify as a reorganization under the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"); and
 
  WHEREAS, for financial accounting purposes, it is intended that the Merger
will be accounted for as a pooling-of-interests transaction.
 
  NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
 
                                    ARTICLE
 
                                   The Merger
 
  Section 1.1 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Ohio General Corporation
Law (the "OGCL"), Merger Sub shall be merged with and into the Company at the
Effective Time (as defined in Section 1.3) and the separate corporate existence
of Merger Sub shall thereupon cease. Following the Effective Time, the Company
shall be the surviving corporation (the "Surviving Corporation"), and shall be
a wholly owned subsidiary of Acquiror.
 
  Section 1.2 Closing. The closing of the Merger (the "Closing") will take
place at 10:00 a.m. on a date to be specified by the parties, which shall be no
later than the second business day after satisfaction or waiver (subject to
applicable law) of the conditions (excluding conditions that, by their terms,
cannot be satisfied until the Closing Date) set forth in Article 6, unless
another time or date is agreed to by the parties hereto. The Closing will be
held at the offices of Jones, Day, Reavis & Pogue, North Point, 901 Lakeside
Avenue, Cleveland, Ohio 44114 or such other location as the parties hereto
shall agree to in writing. The date on which the Closing occurs is hereinafter
referred to as the "Closing Date."
 
                                      A-1
                                                                         ANNEXES


 
  Section 1.3 Effective Time. Subject to the provisions of this Agreement, as
soon as practicable on or after the Closing Date, the parties shall (i) file a
Certificate of Merger (the "Certificate of Merger") in such form as is required
by and executed in accordance with the relevant provisions of the OGCL and (ii)
make all other filings or recordings required under the OGCL. The Merger shall
become effective at such time as the Certificate of Merger is duly filed with
the Secretary of State of the State of Ohio, or at such subsequent date or time
as the Company and Acquiror shall agree and specify in the Certificate of
Merger (the date and time the Merger becomes effective being the "Effective
Time").
 
  Section 1.4 Effects of the Merger. The Merger shall have the effects set
forth in the OGCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time all the property, rights, privileges,
powers and franchises of the Company and Merger Sub shall be vested in the
Surviving Corporation, and all debts, liabilities and duties of the Company and
Merger Sub shall become the debts, liabilities and duties of the Surviving
Corporation.
 
  Section 1.5 Articles of Incorporation and Code of Regulations. The articles
of incorporation and code of regulations of Merger Sub shall be the articles of
incorporation and code of regulations, respectively, of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
 
  Section 1.6 Directors and Officers of the Surviving Corporation. The
directors of Merger Sub immediately prior to the Effective Time shall be the
directors of the Surviving Corporation and the officers of the Company
immediately prior to the Effective Time shall be the officers of the Surviving
Corporation, in each case, until the earlier of their death, resignation or
removal or until their respective successors are duly elected and qualified, as
the case may be.
 
                                   ARTICLE 2
 
                   Effect of the Merger on the Capital Stock
                        of the Constituent Corporations;
                            Exchange of Certificates
 
  Section 2.1 Effect on Capital Stock. As of the Effective Time, by virtue of
the Merger and without any action on the part of the holder of any shares of
capital stock of the Company or Merger Sub:
 
  (a) Cancellation of Treasury Stock and Company-Owned Stock. Each share of
Company Common Stock that is owned by Acquiror, Merger Sub and any direct or
indirect subsidiary of the Company, Acquiror or Merger Sub and any Company
Common Stock held in the treasury of the Company shall automatically be
canceled and retired and shall cease to exist, and no consideration shall be
delivered in exchange therefor.
 
  (b) Conversion of Company Common Stock. Subject to Section 2.2(e), each
issued and outstanding share of Company Common Stock (other than shares to be
canceled in accordance with Section 2.1(a) and shares ("Dissenting Shares")
that are owned by stockholders ("Dissenting Stockholders") that have properly
exercised appraisal rights pursuant to Section 1701.85 of the OGCL) shall be
converted into the right to receive 0.7883 (the "Exchange Ratio") fully paid
and nonassessable shares of common stock, par value $1.00 per share (the
"Acquiror Common Stock"), of Acquiror (the "Merger Consideration"). As of the
Effective Time, all such shares of Company Common Stock shall no longer be
outstanding and shall automatically be canceled and retired and shall cease to
exist, and each holder of a certificate representing any such shares of Company
Common Stock shall cease to have any rights with respect thereto, except the
right to receive the Merger Consideration and any cash in lieu of fractional
shares of Acquiror Common Stock to be issued or paid in consideration therefor
upon surrender of such certificate in accordance with Section 2.2, without
interest.
 
                                      A-2
ANNEXES


 
  (c) Capital Stock of Merger Sub. At the Effective Time, each share of common
stock, no par value, of Merger Sub issued and outstanding immediately prior to
the Effective Time shall be converted into one share of common stock of the
Surviving Corporation.
 
  Section 2.2 Exchange of Certificates.
 
  (a) Exchange Agent. First Chicago Trust Company of New York, or such other
national bank or trust company as shall be designated by Acquiror and the
Company prior to the Effective Time, shall act as agent of Acquiror for
purposes of, among other things, mailing and receiving transmittal letters and
distributing certificates for Acquiror Common Stock, and cash in lieu of
fractional shares of Acquiror Common Stock, to the Company stockholders (the
"Exchange Agent"). As of the Effective Time, Acquiror and the Exchange Agent
shall enter into an agreement which shall provide that Acquiror shall deposit
with the Exchange Agent as of the Effective Time, for the benefit of the
holders of shares of Company Common Stock, for exchange in accordance with this
Article 2, through the Exchange Agent, certificates representing the shares of
Acquiror Common Stock (such shares of Acquiror Common Stock, together with any
dividends or distributions with respect thereto with a record date after the
Effective Time, and any cash payable in lieu of any fractional shares of
Acquiror Common Stock being hereinafter referred to as the "Exchange Fund")
issuable pursuant to Section 2.1 in exchange for outstanding shares of Company
Common Stock.
 
  (b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, the Exchange Agent shall mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (the "Certificates")
whose shares were converted into the right to receive the Merger Consideration
pursuant to Section 2.1(b), (i) a letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Exchange Agent and
shall be in such form and have such other provisions as the Company and
Acquiror may reasonably specify) and (ii) instructions for use in surrendering
the Certificates in exchange for the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Exchange Agent, together with such letter
of transmittal, duly executed, and such other documents as may reasonably be
required by the Exchange Agent, the holder of such Certificate shall be
entitled to receive in exchange therefor a certificate representing that number
of whole shares of Acquiror Common Stock which such holder has the right to
receive pursuant to the provisions of this Article 2, certain dividends or
other distributions, if any, in accordance with Section 2.2(c) and cash in lieu
of any fractional share of Acquiror Common Stock in accordance with Section
2.2(e), and the Certificate so surrendered shall forthwith be canceled. In the
event of a transfer of ownership of Company Common Stock which is not
registered in the transfer records of the Company, a certificate representing
the proper number of shares of Company Common Stock may be issued to a person
other than the person in whose name the Certificate so surrendered is
registered if such Certificate is properly endorsed or otherwise in proper form
for transfer and the person requesting such issuance pays any transfer or other
taxes required by reason of the issuance of shares of Acquiror Common Stock to
a person other than the registered holder of such Certificate or establishes to
the satisfaction of Acquiror that such tax has been paid or is not applicable.
Until surrendered as contemplated by this Section 2.2, each Certificate shall
be deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the Merger Consideration that the holder thereof
has the right to receive in respect of such Certificate pursuant to the
provisions of this Article 2, certain dividends or other distributions, if any,
in accordance with Section 2.2(c) and cash in lieu of any fractional share of
Acquiror Common Stock in accordance with Section 2.2(e). No interest shall be
paid or will accrue on any cash payable to holders of Certificates pursuant to
the provisions of this Article 2.
 
  (c) Distributions with Respect to Unexchanged Shares. No dividends or other
distributions with respect to Acquiror Common Stock with a record date after
the Effective Time shall be paid to the holder of any unsurrendered Certificate
with respect to the shares of Acquiror Common Stock
 
                                      A-3
                                                                         ANNEXES


 
represented thereby, and, in the case of Certificates representing Company
Common Stock, no cash payment in lieu of fractional shares shall be paid to any
such holder pursuant to Section 2.2(e), and all such dividends, other
distributions and cash in lieu of fractional shares of Acquiror Common Stock
shall be paid by Acquiror to the Exchange Agent and shall be included in the
Exchange Fund, in each case until the surrender of such Certificate in
accordance with this Article 2. Subject to the effect of applicable escheat or
similar laws, following surrender of any such Certificate there shall be paid
to the holder of the certificate representing whole shares of Acquiror Common
Stock issued in exchange therefor, without interest, (i) at the time of such
surrender, the amount of dividends or other distributions with a record date
after the Effective Time theretofore paid with respect to such whole shares of
Acquiror Common Stock and, in the case of Certificates representing Company
Common Stock, the amount of any cash payable in lieu of a fractional share of
Acquiror Common Stock to which such holder is entitled pursuant to Section
2.2(e) and (ii) at the appropriate payment date, the amount of dividends or
other distributions with a record date after the Effective Time but prior to
such surrender and with a payment date subsequent to such surrender payable
with respect to such whole shares of Acquiror Common Stock.
 
  (d) No Further Ownership Rights in Company Common Stock. All shares of
Acquiror Common Stock issued upon the surrender for exchange of Certificates in
accordance with the terms of this Article 2 (including any cash paid pursuant
to this Article 2) shall be deemed to have been issued (and paid) in full
satisfaction of all rights pertaining to the shares of Company Common Stock,
theretofore represented by such Certificates, subject, however, to Acquiror's
obligation to pay any dividends or make any other distributions with a record
date prior to the Effective Time which may have been declared or made by the
Company on such shares of Company Common Stock which remain unpaid at the
Effective Time, and there shall be no further registration of transfers on the
stock transfer books of the Surviving Corporation of the shares of Company
Common Stock which were outstanding immediately prior to the Effective Time.
If, after the Effective Time, Certificates are presented to the Surviving
Corporation or the Exchange Agent for any reason, they shall be canceled and
exchanged as provided in this Article 2, except as otherwise provided by law.
 
  (e) No Fractional Shares.
 
    (i) No certificates or scrip representing fractional shares of Acquiror
  Common Stock shall be issued upon the surrender for exchange of
  Certificates, no dividend or distribution of Acquiror shall relate to such
  fractional share interests and such fractional share interests will not
  entitle the owner thereof to vote or to any rights of a stockholder of
  Acquiror.
 
    (ii) Each holder of Company Common Stock entitled to receive a fractional
  share of Acquiror Common Stock shall receive in lieu thereof an amount in
  cash equal to the product obtained by multiplying (A) the fractional share
  interest to which such former holder (after taking into account all shares
  of Company Common Stock held at the Effective Time by such holder) would
  otherwise be entitled by (B) the closing price for a share of Acquiror
  Common Stock as reported on the New York Stock Exchange, Inc. ("NYSE")
  Composite Transaction Tape (as reported in The Wall Street Journal, or, if
  not reported thereby, any other authoritative source) on the Closing Date.
 
    (iii) As soon as practicable after the determination of the amount of
  cash, if any, to be paid to holders of Certificates formerly representing
  Company Common Stock with respect to any fractional share interests, the
  Exchange Agent shall make available such amounts to such holders of
  Certificates formerly representing Company Common Stock subject to and in
  accordance with the terms of Section 2.2(c).
 
  (f) Termination of Exchange Fund. Any portion of the Exchange Fund which
remains undistributed to the holders of the Certificates for six months after
the Effective Time shall be delivered to Acquiror, upon demand, and any holders
of the Certificates who have not theretofore complied with this Article 2 shall
thereafter look only to Acquiror for payment of their claim for
 
                                      A-4
ANNEXES


 
Merger Consideration, any dividends or distributions with respect to Acquiror
Common Stock and any cash in lieu of fractional shares of Acquiror Common
Stock.
 
  (g) No Liability. None of Acquiror, the Surviving Corporation or the Exchange
Agent shall be liable to any person in respect of any shares of Acquiror Common
Stock, any dividends or distributions with respect thereto, any cash in lieu of
fractional shares of Acquiror Common Stock or any cash from the Exchange Fund,
in each case, delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
 
  (h) Investment of Exchange Fund. The Exchange Agent shall invest any cash
included in the Exchange Fund, as directed by Acquiror, on a daily basis. Any
interest and other income resulting from such investments shall be paid to
Acquiror.
 
  (i) Lost Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Surviving Corporation, the posting by such person of a bond in such reasonable
amount as the Surviving Corporation may direct as indemnity against any claim
that may be made against it with respect to such Certificate, the Exchange
Agent shall issue in exchange for such lost, stolen or destroyed Certificate
the Merger Consideration and, if applicable, any unpaid dividends and
distributions on shares of Acquiror Common Stock deliverable in respect thereof
and any cash in lieu of fractional shares, in each case, due to such person
pursuant to this Agreement.
 
  Section 2.3 Certain Adjustments. If after the date hereof and on or prior to
the Effective Time the outstanding shares of Acquiror Common Stock or Company
Common Stock shall be changed into a different number of shares by reason of
any reclassification, recapitalization, split-up, combination or exchange of
shares, or any dividend payable in stock or other securities shall be declared
thereon with a record date within such period, or any similar event shall occur
(any such action, an "Adjustment Event"), the Exchange Ratio shall be adjusted
accordingly to provide to the holders of Company Common Stock the same economic
effect and percentage ownership of Acquiror Common Stock as contemplated by
this Agreement prior to such reclassification, recapitalization, split-up,
combination, exchange or dividend or similar event.
 
  Section 2.4 Dissenters' Rights. No Dissenting Stockholder shall be entitled
to any portion of the Merger Consideration or cash in lieu of fractional shares
thereof or any dividends or other distributions pursuant to this Article 2
unless and until the holder thereof shall have failed to perfect or shall have
effectively withdrawn or lost such holder's right to dissent from the Merger
under the OGCL, and any Dissenting Shareholder shall be entitled to receive
only the payment provided by Section 1701.85 of the OGCL with respect to
Company Common Stock owned by such Dissenting Stockholder. If any Person who
otherwise would be deemed a Dissenting Stockholder shall have failed to
properly perfect or shall have effectively withdrawn or lost the right to
dissent with respect to any Company Common Stock, such shares of Company Common
Stock shall thereupon be treated as though such Company Common Stock had been
converted into the right to receive the Merger Consideration with respect to
such Company Common Stock as provided in this Article 2. The Company shall give
Acquiror (i) prompt notice of any written demands for appraisal, attempted
withdrawals of such demands and any other instruments served pursuant to
applicable law received by the Company relating to stockholders' rights of
appraisal and (ii) the opportunity to direct all negotiations and proceedings
with respect to demand for appraisal under the OGCL. The Company shall not,
except with the prior written consent of Acquiror, voluntarily make any payment
with respect to any demands for appraisals of Dissenting Shares, offer to
settle or settle any such demands or approve any withdrawal of any such
demands.
 
  Section 2.5 Further Assurances. At and after the Effective Time, the officers
and directors of the Surviving Corporation will be authorized to execute and
deliver, in the name and on behalf of
 
                                      A-5
                                                                         ANNEXES


 
the Company or Merger Sub, any deeds, bills of sale, assignments or assurances
and to take and do, in the name and on behalf of the Company or Merger Sub, any
other actions and things to vest, perfect or confirm of record or otherwise in
the Surviving Corporation any and all right, title and interest in, to and
under any of the rights, properties or assets acquired or to be acquired by the
Surviving Corporation as a result of, or in connection with, the Merger.
 
                                   ARTICLE 3
 
                         Representations and Warranties
 
  Section 3.1 Representations and Warranties of the Company. Except as
disclosed in the Company Filed SEC Documents (as defined in Section 3.1(g)) or
as set forth on the Disclosure Schedule delivered by the Company to Acquiror
prior to the execution of this Agreement (the "Company Disclosure Schedule"),
the Company hereby represents and warrants to Acquiror and Merger Sub as
follows:
 
  (a) Organization, Standing and Corporate Power. Each of the Company and its
subsidiaries (as defined in Section 8.3(e)) is a corporation or other legal
entity duly organized, validly existing and in good standing (with respect to
jurisdictions which recognize such concept) under the laws of the jurisdiction
in which it is organized and has the requisite corporate or other power, as the
case may be, and authority to carry on its business as now being conducted,
except, as to subsidiaries, for those jurisdictions where the failure to be so
organized, existing or in good standing individually or in the aggregate would
not have a material adverse effect (as defined in Section 8.3(c)) on the
Company. Each of the Company and its subsidiaries is duly qualified or licensed
to do business and is in good standing (with respect to jurisdictions which
recognize such concept) in each jurisdiction in which the nature of its
business or the ownership, leasing or operation of its properties makes such
qualification or licensing necessary, except for those jurisdictions where the
failure to be so qualified or licensed or to be in good standing individually
or in the aggregate would not have a material adverse effect on the Company.
The Company has made available to Acquiror prior to the execution of this
Agreement complete and correct copies of its articles of incorporation and code
of regulations, each as amended to date.
 
  (b) Subsidiaries. Section 3.1(b) of the Company Disclosure Schedule includes
all the subsidiaries of the Company which as of the date of this Agreement are
Significant Subsidiaries (as defined in Rule 1-02 of Regulation S-X of the
Securities and Exchange Commission (the "SEC")). All the outstanding shares of
capital stock of, or other equity interests in, each Significant Subsidiary (i)
have been validly issued and are fully paid and nonassessable, (ii) are owned
directly or indirectly by the Company, free and clear of all pledges, claims,
liens, charges, encumbrances and security interests of any kind or nature
whatsoever (collectively, "Liens") and (iii) are free of any other restriction
(including any restriction on the right to vote, sell or otherwise dispose of
such capital stock or other ownership interests), except in the case of clauses
(ii) and (iii) for any Liens or restrictions that would not have a material
adverse effect on the Company.
 
  (c) Capital Structure. The authorized capital stock of the Company consists
of (i) 400,000,000 shares of Company Common Stock and (ii) 20,000,000 shares of
preferred stock, without par value, of the Company ("Company Authorized
Preferred Stock"). At the close of business on September 30, 1998: (i)
149,975,019 shares of Company Common Stock were issued and outstanding; (ii)
12,702,063 shares of Company Common Stock were held by the Company in its
treasury; (iii) no shares of Company Authorized Preferred Stock were issued or
outstanding; and (iv) 3,210,548 shares of Company Common Stock were subject to
outstanding employee stock options to purchase Company Common Stock granted
under The Amended and Restated 1989 Stock Incentive and Option Plan (the
"Company Stock Plan") at September 30, 1998 (collectively, "Company Employee
Stock Options"). All outstanding shares of capital stock of the Company are,
and all shares which may be issued will be,
 
                                      A-6
ANNEXES


 
when issued, duly authorized, validly issued, fully paid and nonassessable and
not subject to preemptive rights. Except (i) as set forth in this Section
3.1(c), (ii) for changes since September 30, 1998 resulting from the issuance
of shares of Company Common Stock pursuant to the Company Employee Stock
Options, (iii) for outstanding rights issued pursuant to the Company Rights
Agreement, and (iv) as permitted by Section 4.1(a)(ii), (x) there are not
issued, reserved for issuance or outstanding (A) any shares of capital stock or
other voting securities of the Company, (B) any securities of the Company
convertible into or exchangeable or exercisable for shares of capital stock or
voting securities of the Company or (C) any warrants, calls, options or other
rights to acquire from the Company or any Company subsidiary, and no obligation
of the Company or any Company subsidiary to issue, any capital stock, voting
securities or securities convertible into or exchangeable or exercisable for
capital stock or voting securities of the Company and (y) there are no
outstanding obligations of the Company or any Company subsidiary to repurchase,
redeem or otherwise acquire any such securities or, other than agreements
entered into with respect to the Company Stock Plan in effect as of the close
of business on September 30, 1998, to issue, deliver or sell, or cause to be
issued, delivered or sold, any such securities. Neither the Company nor any
Company subsidiary is a party to any voting agreement with respect to the
voting of any such securities. There are no outstanding (A) securities of the
Company or any Company subsidiary convertible into or exchangeable or
exercisable for shares of capital stock or other voting securities or ownership
interests in any Company subsidiary, (B) warrants, calls, options or other
rights to acquire from the Company or any Company subsidiary, and no obligation
of the Company or any Company subsidiary to issue, any capital stock, voting
securities or other ownership interests in, or any securities convertible into
or exchangeable or exercisable for any capital stock, voting securities or
ownership interests in, any Company subsidiary or (C) obligations of the
Company or any Company subsidiary to repurchase, redeem or otherwise acquire
any such outstanding securities of Company subsidiaries or to issue, deliver or
sell, or cause to be issued, delivered or sold, any such securities.
 
  (d) Authority; Noncontravention. The Company has all requisite corporate
power and authority to enter into this Agreement and, subject to the Company
Stockholder Approval (as defined in Section 3.1(l)), to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject, in the case of the
Merger, to the Company Stockholder Approval. This Agreement has been duly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery by Acquiror and Merger Sub, constitutes a legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated by this Agreement
and compliance with the provisions of this Agreement will not, conflict with,
or result in any violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a benefit under, or result in the
creation of any Lien upon any of the properties or assets of the Company or any
of its subsidiaries under, (i) the articles of incorporation or code of
regulations of the Company or the comparable organizational documents of any of
its subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise,
license or similar authorization applicable to the Company or any of its
subsidiaries or their respective properties or assets or (iii) subject to the
governmental filings and other matters referred to in the following sentence,
any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to the Company or any of its subsidiaries or their respective
properties or assets, other than, in the case of clauses (ii) and (iii), any
such conflicts, violations, defaults, rights, losses or Liens that individually
or in the aggregate would not (x) have a material adverse effect on the Company
or (y) reasonably be expected to materially impair or delay the ability of the
Company to perform its obligations under this Agreement. No consent, approval,
order or authorization of, action by or in respect of, or registration,
declaration or filing with, any federal, state, local or foreign government,
 
                                      A-7
                                                                         ANNEXES


 
any court, administrative, regulatory or other governmental agency, commission
or authority or any non-governmental U.S. or foreign self-regulatory agency,
commission or authority or any arbitral tribunal (each, a "Governmental
Entity") is required by the Company or any of its subsidiaries in connection
with the execution and delivery of this Agreement by the Company or the
consummation by the Company of the transactions contemplated hereby, except
for: (1) the filing with the SEC of (A) a proxy statement relating to the
Company Stockholders Meeting (as defined in Section 5.1(b)) (such proxy
statement, together with the proxy statement relating to the Acquiror
Stockholders Meeting (as defined in Section 5.1(c)), in each case as amended or
supplemented from time to time, the "Joint Proxy Statement"), and (B) such
reports under Section 13(a), 13(d), 15(d) or 16(a) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), as may be required in connection
with this Agreement and the transactions contemplated hereby; (2) the filing of
the Certificate of Merger with the Secretary of State of the State of Ohio and
such filings with Governmental Entities to satisfy the applicable requirements
of state securities or "blue sky" laws; (3) the filing of a premerger
notification and report form by the Company under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended ("HSR Act"); (4) such filings,
consents, approvals, orders or authorizations required to be made or obtained
pursuant to the laws of any non-U.S. jurisdiction relating to antitrust matters
or competition ("Foreign Antitrust Laws"); and (5) such consents, approvals,
orders or authorizations the failure of which to be made or obtained
individually or in the aggregate would not (x) have a material adverse effect
on the Company or (y) reasonably be expected to materially impair or delay the
ability of Company to perform its obligations under this Agreement.
 
  (e) Reports; Undisclosed Liabilities. The Company has filed all required
reports, schedules, forms, statements and other documents (including exhibits
and all other information incorporated therein) with the SEC since January 1,
1995 (the "Company SEC Documents"). As of their respective dates, the Company
SEC Documents complied in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act,
as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such Company SEC Documents, and none of the Company
SEC Documents when filed 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. Except to the extent that information contained
in any Company SEC Document has been revised or superseded by a later filed
Company SEC Document, none of the Company SEC Documents contains any untrue
statement of a material fact or omits 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 financial
statements of the Company included in the Company SEC Documents comply as to
form, as of their respective dates of filing with the SEC, 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 (except, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto)
and fairly present in all material respects the consolidated financial position
of the Company and its consolidated subsidiaries as of the dates thereof and
the consolidated statement of earnings, cash flows and shareholders' equity for
the periods then ended (subject, in the case of unaudited statements, to normal
recurring year-end audit adjustments). Except (A) as reflected in such
financial statements or in the notes thereto or (B) for liabilities incurred in
connection with this Agreement or the transactions contemplated hereby, neither
the Company nor any of its subsidiaries has any liabilities or obligations of
any nature which, individually or in the aggregate, would have a material
adverse effect on the Company.
 
  (f) Information Supplied. None of the information supplied or to be supplied
by the Company specifically for inclusion or incorporation by reference in (i)
the registration statement on Form S-4 to be filed with the SEC by Acquiror in
connection with the issuance of Acquiror Common Stock in the
 
                                      A-8
ANNEXES


 
Merger (the "Form S-4") will, at the time the Form S-4 becomes effective under
the Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) the Joint Proxy Statement will, at
the date it is first mailed to the Company's stockholders or at the time of the
Company Stockholders Meeting, 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. The Joint Proxy Statement will comply as
to form in all material respects with the requirements of the Exchange Act and
the rules and regulations thereunder, except that no representation or warranty
is made by the Company with respect to statements made or incorporated by
reference therein based on information supplied by Acquiror or Merger Sub
specifically for inclusion or incorporation by reference in the Joint Proxy
Statement.
 
  (g) Absence of Certain Changes or Events. Except for liabilities incurred in
connection with this Agreement or the transactions contemplated hereby, since
December 31, 1997, the Company and its subsidiaries have conducted their
business only in the ordinary course or as disclosed in any Company Filed SEC
Document, and there has not been (1) any declaration, setting aside or payment
of any dividend or other distribution (whether in cash, stock or property) with
respect to any of the Company's capital stock, other than regular quarterly
cash dividends on the Company Common Stock, (2) any split, combination or
reclassification of any of the Company's capital stock or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for shares of the Company's capital stock, except for
issuances of Company Common Stock upon the exercise of Company Employee Stock
Options awarded prior to September 30, 1998 in accordance with their present
terms or issued pursuant to Section 4.1(a) or in accordance with the terms of
the Company Stock Plan, (3) (A) any granting by the Company or any of its
subsidiaries to any current or former director, executive officer or other key
employee of the Company or its subsidiaries of any increase in compensation,
bonus or other benefits, except for normal increases in the ordinary course of
business or as was required under any employment agreements in effect as of the
date of the most recent audited financial statements included in the Company
SEC Documents filed and publicly available prior to the date of this Agreement
(as amended to the date of this Agreement, the "Company Filed SEC Documents"),
(B) any granting by the Company or any of its subsidiaries to any such current
or former director, executive officer or key employee of any increase in
severance or termination pay, except in the ordinary course of business, or (C)
any entry by the Company or any of its subsidiaries into, or any amendment of,
any employment, deferred compensation, consulting, severance, termination or
indemnification agreement with any such current or former director, executive
officer or key employee, other than in the ordinary course of business, (4)
except insofar as may have been disclosed in the Company Filed SEC Documents or
required by a change in generally accepted accounting principles, any change in
accounting methods, principles or practices by the Company materially affecting
its assets, liabilities or business or (5) except insofar as may have been
disclosed in the Company Filed SEC Documents, any tax election that
individually or in the aggregate would reasonably be expected to have a
material adverse effect on the Company or any of its tax attributes or any
settlement or compromise of any material income tax liability.
 
  (h) Compliance with Applicable Laws; Litigation. The Company, its
subsidiaries and employees hold all permits, licenses, variances, exemptions,
orders, registrations and approvals of all Governmental Entities which are
required for the operation of the businesses of Company and its subsidiaries
(collectively, the "Company Permits"), except where the failure to have any
such Company Permits individually or in the aggregate would not have a material
adverse effect on the Company. The Company and its subsidiaries are in
compliance with the terms of the Company Permits and all applicable statutes,
laws, ordinances, rules and regulations, except where the failure so to comply
individually or in the aggregate would not have a material adverse effect on
the Company. As of the date of this Agreement, except as disclosed in the
Company Filed SEC Documents, no action,
 
                                      A-9
                                                                         ANNEXES


 
demand, requirement or investigation by any Governmental Entity and no suit,
action or proceeding by any person, in each case with respect to the Company or
any of its subsidiaries or any of their respective properties is pending or, to
the knowledge (as defined in Section 8.3(b)) of the Company, threatened, other
than, in each case, those the outcome of which individually or in the aggregate
would not (i) reasonably be expected to have a material adverse effect on the
Company or (ii) reasonably be expected to materially impair or delay the
ability of the Company to perform its obligations under this Agreement.
 
  (i) Absence of Changes in Benefit Plans. Since February 1, 1998, there has
not been any (i) adoption by the Company or any of its subsidiaries of any
collective bargaining agreement or any material bonus, pension, profit sharing,
deferred compensation, incentive compensation, stock ownership, stock purchase,
stock option, phantom stock, retirement, vacation, severance, disability, death
benefit, hospitalization, medical, life, severance or other plan, arrangement
or understanding providing benefits to any current or former employee, officer
or director of Company or any of its wholly owned subsidiaries (collectively,
the "Company Benefit Plans") to which any of the Company's executive officers
is a participant or (ii) amendment to any Company Benefit Plan that resulted in
a material increase in the benefits received or to be received thereunder by
any executive officer of the Company. Since January 1, 1998, there has not been
any material increase in the aggregate benefits provided under the Company
Benefit Plans.
 
  (j) ERISA Compliance.
 
    (i) With respect to the Company Benefit Plans, no event has occurred and,
  to the knowledge of the Company, there exists no condition or set of
  circumstances, in connection with which the Company or any of its
  subsidiaries could be subject to any liability that individually or in the
  aggregate would have a material adverse effect on the Company under the
  Employee Retirement Income Security Act of 1974, as amended ("ERISA"), the
  Code or any other applicable law.
 
    (ii) Each Company Benefit Plan has been administered in accordance with
  its terms, all applicable laws, including ERISA and the Code, and the terms
  of all applicable collective bargaining agreements, except for any failures
  so to administer any Company Benefit Plan that individually or in the
  aggregate would not reasonably be expected to have a material adverse effect
  on the Company. The Company, its subsidiaries and all the Company Benefit
  Plans are in compliance with the applicable provisions of ERISA, the Code
  and all other applicable laws and the terms of all applicable collective
  bargaining agreements, except for any failures to be in such compliance that
  individually or in the aggregate would not reasonably be expected to have a
  material adverse effect on the Company. Each Company Benefit Plan that is
  intended to be qualified under Section 401(a) or 401(k) of the Code has
  received a favorable determination letter from the IRS that it is so
  qualified and each trust established in connection with any Company Benefit
  Plan that is intended to be exempt from federal income taxation under
  Section 501(a) of the Code has received a determination letter from the IRS
  that such trust is so exempt. To the knowledge of the Company, no fact or
  event has occurred since the date of any determination letter from the IRS
  which is reasonably likely to affect adversely the qualified status of any
  such Company Benefit Plan or the exempt status of any such trust, except for
  any occurrence that individually or in the aggregate would not reasonably be
  expected to have a material adverse effect on the Company, and to the
  knowledge of the Company, all contributions to, and payments from, such
  Plans which are required to be made in accordance with such Plans, ERISA or
  the Code have been timely made other than any failures that individually or
  in the aggregate would not reasonably be expected to have a material adverse
  effect on the Company.
 
    (iii) Except as any of the following either individually or in the
  aggregate would not reasonably be expected to have a material adverse effect
  on the Company, (x) neither the Company nor any trade or business, whether
  or not incorporated (an "ERISA Affiliate"), which together with the Company
  would be deemed to be a "single employer" within the meaning of
 
                                      A-10
ANNEXES


 
  Section 4001(b) of ERISA, has incurred any liability under Title IV of ERISA
  and no condition exists that presents a risk to the Company or any ERISA
  Affiliate of the Company of incurring any such liability (other than
  liability for benefits or premiums to the Pension Benefit Guaranty
  Corporation arising in the ordinary course), (y) no Company Benefit Plan has
  incurred an "accumulated funding deficiency" (within the meaning of Section
  302 of ERISA or Section 412 of the Code) whether or not waived and (z) to
  the knowledge of the Company, there are not any facts or circumstances that
  would materially change the funded status of any Company Benefit Plan that
  is a "defined benefit" plan (as defined in Section 3(35) of ERISA) since the
  date of the most recent actuarial report for such plan.
 
    (iv) Neither the Company nor any of its subsidiaries is a party to any
  collective bargaining or other labor union contract applicable to persons
  employed by the Company or any of its subsidiaries and no collective
  bargaining agreement is being negotiated by the Company or any of its
  subsidiaries, in each case that is material to the Company and its
  subsidiaries taken as a whole. As of the date of this Agreement, there is no
  labor dispute, strike or work stoppage against the Company or any of its
  subsidiaries pending or, to the knowledge of the Company, threatened which
  may interfere with the respective business activities of the Company or any
  of its subsidiaries, except where such dispute, strike or work stoppage
  individually or in the aggregate would not reasonably be expected to have a
  material adverse effect on the Company. As of the date of this Agreement,
  (x) to the knowledge of the Company, none of the Company, any of its
  subsidiaries or any of their respective representatives or employees has
  committed any unfair labor practice in connection with the operation of the
  respective businesses of the Company or any of its subsidiaries, and (y)
  there is no charge or complaint against the Company or any of its
  subsidiaries by the National Labor Relations Board or any comparable
  governmental agency pending or threatened in writing, except for any
  occurrence that individually or in the aggregate would not reasonably be
  expected to have a material adverse effect on the Company.
 
    (v) No Company Benefit Plan provides medical benefits (whether or not
  insured) with respect to current or former employees after retirement or
  other termination of service the cost of which is material to the Company
  and its subsidiaries taken as a whole.
 
    (vi) The consummation of the transactions contemplated by this Agreement
  will not, either alone or in combination with another event, (A) entitle any
  current or former employee, officer or director of the Company or any ERISA
  Affiliate of the Company to severance pay, unemployment compensation or any
  other payment, except as expressly provided in this Agreement, (B)
  accelerate the time of payment or vesting, or increase the amount of
  compensation due any such employee, officer or director or (C) constitute a
  "change of control" under any Company Benefit Plan.
 
    (vii) With respect to each Company Benefit Plan: (x) no actions, suits,
  claims or disputes are pending or, to the knowledge of the Company,
  threatened, other than claims for benefits made in accordance with the terms
  of such Company Benefit Plan, except for such actions, suits, claims or
  disputes that individually or in the aggregate would not reasonably be
  expected to have a material adverse effect on the Company; (y) no audits are
  pending with any governmental or regulatory agency and to the knowledge of
  the Company there are no facts which could give rise to any liability in the
  event of such an audit that either individually or in the aggregate would
  have a material adverse effect on the Company; and (z) to the knowledge of
  the Company, all reports and returns required to be filed with any
  governmental agency or distributed to any participant in any Company Benefit
  Plan have been so duly filed or distributed other than any failure to file
  or distribute such reports or returns that individually or in the aggregate
  would not reasonably be expected to have a material adverse effect on the
  Company.
 
    (viii) The Company has not incurred any liability under Code Section 4975,
  and no fact exists which could result in a liability to the Company under
  Code Section 4975 that would reasonably be expected to have a material
  adverse effect on the Company.
 
                                      A-11
                                                                         ANNEXES


 
    (ix) Neither the Company nor any ERISA Affiliate contributes to a
  multiemployer plan described in Section 3(37) of ERISA, no withdrawal
  liability has been incurred with respect to any such plan and no withdrawal
  liability would be incurred upon the withdrawal from any such plan by the
  Company or any ERISA Affiliate as of the date hereof, except for any
  withdrawal that individually or in the aggregate would not have a material
  adverse effect on the Company.
 
  (k) Taxes.
 
    (i) Each of the Company and its subsidiaries has filed all material tax
  returns and reports required to be filed by it and all such returns and
  reports are complete and correct in all material respects, or requests for
  extensions to file such returns or reports have been timely filed, granted
  and have not expired, except to the extent that such failures to file, to be
  complete or correct or to have extensions granted that remain in effect
  individually or in the aggregate would not have a material adverse effect on
  the Company. The Company and each of its subsidiaries has paid (or the
  Company has paid on its behalf) all taxes (as defined below) shown as due on
  such returns, and the most recent financial statements contained in the
  Company SEC Documents reflect an adequate reserve for all taxes payable by
  the Company and its subsidiaries for all taxable periods and portions
  thereof accrued through the date of such financial statements.
 
    (ii) No deficiencies for any taxes have been proposed, asserted or
  assessed against the Company or any of its subsidiaries that are not
  adequately reserved for, except for deficiencies that individually or in the
  aggregate would not have a material adverse effect on the Company.
 
    (iii) Neither the Company nor any of its subsidiaries has taken any action
  or knows of any fact, agreement, plan or other circumstance that is
  reasonably likely to prevent the Merger from qualifying as a reorganization
  within the meaning of Section 368(a) of the Code.
 
    (iv) As used in this Agreement, "taxes" shall include all (x) federal,
  state, local or foreign net and gross income, alternative or add-on minimum,
  environmental, gross receipts, ad valorem, value added, goods and services,
  capital stock, profits, license, single business, employment, severance,
  stamp, unemployment, customs, property, sales, excise, use, occupation,
  service, transfer, payroll, franchise, withholding and other taxes or
  similar governmental duties, charges, fees, levies or other assessments
  including any interest, penalties or additions with respect thereto, (y)
  liability for the payment of any amounts of the type described in clause (x)
  as a result of being a member of an affiliated, consolidated, combined or
  unitary group, and (z) liability for the payment of any amounts as a result
  of being party to any tax sharing agreement or as a result of any express or
  implied obligation to indemnify any other person with respect to the payment
  of any amounts of the type described in clause (x) or (y).
 
  (l) Voting Requirements. The affirmative vote of the holders of two-thirds of
the outstanding shares of Company Common Stock at the Company Stockholders
Meeting to adopt this Agreement (the "Company Stockholder Approval") is the
only vote of the holders of any class or series of the Company's capital stock
necessary to adopt and approve this Agreement and the Merger and the
transactions contemplated hereby. The Board of Directors of the Company has
duly and validly approved and taken all corporate action required to be taken
by the Company Board of Directors for the consummation of the transactions
contemplated by this Agreement.
 
  (m) State Takeover Statutes. The Board of Directors of the Company has taken
all necessary action so that no "fair price," "moratorium," "control share
acquisition" or other similar anti-takeover statute or regulation (each, a
"Takeover Statute") (including the control share acquisition provisions
codified in Sections 1701.831 et seq. of the OGCL and the moratorium provisions
codified in Section 1704.02 et seq. of the OGCL) or any applicable anti-
takeover provision in the Company's articles of incorporation or code of
regulations is applicable to the Merger and the other transactions contemplated
by this Agreement. To the knowledge of the Company, no other state takeover
statute is applicable to the Merger or the other transactions contemplated by
this Agreement.
 
                                      A-12
ANNEXES


 
  (n) Accounting Matters. The Company has disclosed to its independent public
accountants all actions taken by it or its subsidiaries that would impact the
accounting of the business combination to be effected by the Merger as a
pooling of interests. As of the date hereof, the Company believes that the
Merger will qualify for "pooling of interests" accounting.
 
  (o) Brokers. Except for Goldman, Sachs & Co., no broker, investment banker,
financial advisor or other person is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company.
 
  (p) Ownership of Acquiror Capital Stock. Except for shares owned by the
Company Benefit Plans or shares held or managed for the account of another
person or as to which the Company is required to act as a fiduciary or in a
similar capacity, as of the date hereof, neither the Company nor, to its
knowledge without independent investigation, any of its affiliates, (i)
beneficially owns (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, or (ii) is party to any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of, in each case,
shares of capital stock of Acquiror.
 
  (q) Certain Contracts. Except as set forth in the Company Filed SEC Documents
or as permitted pursuant to Section 4.1(a), neither the Company nor any of its
subsidiaries is a party to or bound by (i) any agreement relating to the
incurring of indebtedness (including sale and leaseback and capitalized lease
transactions and other similar financing transactions) providing for payment or
repayment in excess of $100.0 million, (ii) any "material contract" (as such
term is defined in Item 601(b)(10) of Regulation S-K of the SEC) or (iii) any
non-competition agreement which purports to limit in any material respect the
manner in which, or the localities in which, all or any substantial portion of
the business of the Company and its subsidiaries, taken as a whole, or, after
the Effective Time, the business of Acquiror and its subsidiaries, taken as a
whole, is or would be conducted.
 
  (r) The Company Rights Agreement. The Rights Agreement dated June 25, 1996
between the Company and The First National Bank of Boston (the "Company Rights
Agreement") has been amended to (i) render the Company Rights Agreement
inapplicable to the Merger and the other transactions contemplated by this
Agreement, (ii) ensure that (x) none of Acquiror or its wholly owned
subsidiaries is an Acquiring Person (as defined in the Company Rights
Agreement) pursuant to the Company Rights Agreement, (y) a Distribution Date, a
Triggering Event or a Share Acquisition Date (as such terms are defined in the
Company Rights Agreement) does not occur solely by reason of the execution of
this Agreement, the consummation of the Merger, or the consummation of the
other transactions contemplated by this Agreement and (z) ensure that the
Company Rights Agreement will expire or otherwise terminate immediately prior
to the Effective Time.
 
  (s) Opinion of Financial Advisor. The Company has received the opinion of
Goldman, Sachs & Co., dated the date of this Agreement, to the effect that, as
of such date, the Exchange Ratio is fair from a financial point of view to
holders of shares of Company Common Stock (other than Acquiror and its
affiliates), a signed copy of which opinion will be made available to Acquiror
promptly after the date hereof.
 
  (t) Environmental Matters.
 
    (i) During the three-year period immediately preceding the date of this
  Agreement, neither the Company nor any of its subsidiaries has received any
  written communication, whether from a Governmental Entity, citizens' group,
  employee or otherwise, alleging that the Company or any of its subsidiaries
  is not in compliance with applicable Environmental Laws, other than those
  instances of alleged noncompliance which individually or in the aggregate
  would not (x) reasonably be expected to have a material adverse effect on
  the Company or (y) reasonably be expected to materially impair or delay the
  ability of the Company to perform its obligations under this Agreement.
 
                                      A-13
                                                                         ANNEXES


 
    (ii) There is no Environmental Claim pending or, to the knowledge of the
  Company, threatened, against the Company or any of its subsidiaries or, to
  the knowledge of the Company, against any person whose liability for any
  Environmental Claim the Company or any of its subsidiaries has or may have
  retained or assumed either contractually or by operation of law, other than
  those Environmental Claims which individually or in the aggregate would not
  (x) reasonably be expected to have a material adverse effect on the Company
  or (y) reasonably be expected to materially impair or delay the ability of
  the Company to perform its obligations under this Agreement.
 
    (iii) There are no present actions, activities, circumstances, conditions,
  events or incidents, including, without limitation, the Release or presence
  of any Hazardous Material at any property, that could reasonably be expected
  to result in liability under any Environmental Law for the Company or any of
  its subsidiaries or, to the knowledge of the Company, for any person whose
  liability for any Environmental Claim the Company or any of its subsidiaries
  has or may have retained or assumed either contractually or by operation of
  law, other than those liabilities which individually or in the aggregate
  would not (x) reasonably be expected to have a material adverse effect on
  the Company or (y) reasonably be expected to materially impair or delay the
  ability of the Company to perform its obligations under this Agreement.
 
    (iv) As used herein, the term "Cleanup" means all actions required to (w)
  cleanup, remove, treat, manage or remediate Hazardous Materials in the
  indoor or outdoor environment; (x) prevent the Release of Hazardous
  Materials so that they do not migrate, endanger or threaten to endanger
  public health or welfare or the indoor or outdoor environment; (y) perform
  pre-remedial studies and investigations and post-remedial monitoring and
  care; or (z) respond to any government requests for information or documents
  in any way relating to cleanup, removal, treatment or remediation or
  potential cleanup, removal, treatment or remediation of Hazardous Materials
  in the indoor or outdoor environment.
 
    (v) As used herein, the term "Environmental Claim" means any claim,
  action, cause of action, investigation or written notice by any person
  alleging potential liability or responsibility (including, without
  limitation, potential liability for investigatory costs, Cleanup costs,
  governmental response costs, natural resources damages, property damages,
  personal injuries, fines or penalties) arising out of, based on or resulting
  from (x) the presence or Release of any Hazardous Materials at any location,
  whether or not owned or operated by the Company or any of its subsidiaries
  or (y) circumstances forming the basis of any violation of any Environmental
  Law.
 
    (vi) As used herein, the term "Environmental Laws" means all federal,
  state, local and foreign laws and regulations relating to pollution or
  protection of the environment, including, without limitation, laws relating
  to Releases of Hazardous Materials or otherwise relating to the manufacture,
  processing, distribution, use, treatment, storage, disposal, transport or
  handling of Hazardous Materials.
 
    (vii) As used herein, the term "Hazardous Materials" means all substances
  defined as Hazardous Substances, Hazardous Waste, Oils, Pollutants or
  Contaminants in the National Oil and Hazardous Substances Pollution
  Contingency Plan, 40 C.F.R. (S) 300.5, or defined as such by, or regulated
  as such under, any Environmental Law, including all matters adversely
  affecting air, ground, ground water and/or environmental quality or safety,
  including, without limitation, petroleum, petroleum-derived products,
  underground storage tanks and asbestos.
 
    (viii) As used herein, the term "Release" means any release, spill,
  emission, discharge, leaking, pumping, injection, deposit, disposal,
  dispersal, leaching or migration into the environment (including, without
  limitation, ambient air, surface water, groundwater and surface or
  subsurface strata) or into or out of any property (including the abatement
  or discarding of barrels or other containers containing Hazardous
  Materials), including the movement of Hazardous Materials through, on or in
  the air, soil, surface water, ground water or property.
 
                                      A-14
ANNEXES


 
  (u) Intellectual Property.
 
    (i) The Company and its subsidiaries own or have a binding, enforceable
  right to use all letters patent, patent applications, trade names, brand
  names, trademarks, service marks, trademark and service mark registrations
  and applications, copyright registrations and applications, both domestic
  and foreign (collectively, the "Company Intellectual Property") used in
  their businesses substantially as currently conducted except for such
  Company Intellectual Property, the failure of which to own or have a
  binding, enforceable right to use individually or in the aggregate would not
  reasonably be expected to have a material adverse effect on the Company.
  Neither the Company nor any of its subsidiaries has received any written
  notice of infringement of or conflict with and, to the knowledge of the
  Company, there are no infringements of or conflicts with, the rights of
  others with respect to the use of any Company Intellectual Property that
  individually or in the aggregate, in either such case, would reasonably be
  expected to have a material adverse effect on the Company or would
  reasonably be expected to materially impair or delay the ability of the
  Company to perform its obligations under this Agreement. Neither the Company
  nor any of its subsidiaries has received any written notice that the conduct
  of another person's business or the nature of any products sold or services
  provided by another person infringes upon or conflicts with the Company's
  registered trademarks set forth in its Annual Report on Form 10-K for the
  fiscal year ended December 31, 1997 (the "Material Company Trademarks")
  other than those infringements or conflicts that individually or in the
  aggregate would not reasonably be expected to (x) have a material adverse
  effect on the Company or (y) materially impair or delay the ability of the
  Company to perform its obligations under this Agreement.
 
    (ii) The Company has conducted a comprehensive review of its computer
  systems' ability to process properly year date codes after December 31,
  1999, has formulated a plan to modify or replace programs where necessary
  and believes that all necessary reprogramming efforts will be completed
  prior to December 31, 1999, except for any failures to complete such
  reprogramming efforts as would not individually or in the aggregate have a
  material adverse effect on the Company.
 
  Section 3.2 Representations and Warranties of Acquiror and Merger Sub. Except
as disclosed in the Acquiror Filed SEC Documents (as defined in Section 3.2(h))
or as set forth on the Disclosure Schedule delivered by Acquiror to the Company
prior to the execution of this Agreement (the "Acquiror Disclosure Schedule"),
Acquiror and Merger Sub each hereby represents and warrants to the Company as
follows:
 
  (a) Capitalization of Merger Sub. The authorized capital stock of Merger Sub
consists of 100 shares of common stock, no par value, all of which are validly
issued and outstanding. All of the issued and outstanding capital stock of
Merger Sub is, and at the Effective Time will be, owned by Acquiror, and there
are (i) no other shares of capital stock or voting securities of Merger Sub,
(ii) no securities of Merger Sub convertible into or exchangeable for shares of
capital stock or voting securities of Merger Sub and (iii) no options or other
rights to acquire from Merger Sub, and no obligations of Merger Sub to issue,
any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of Merger Sub. Merger Sub
has not conducted any business prior to the date hereof and has no, and prior
to the Effective Time will have no, assets, liabilities or obligations of any
nature other than those incident to its formation and pursuant to this
Agreement and the Merger and the other transactions contemplated by this
Agreement.
 
  (b) Organization, Standing and Corporate Power. Each of Acquiror and its
subsidiaries is a corporation or other legal entity duly organized, validly
existing and in good standing (with respect to jurisdictions which recognize
such concept) under the laws of the jurisdiction in which it is organized and
has the requisite corporate or other power, as the case may be, and authority
to carry on its business as now being conducted, except, as to subsidiaries,
for those jurisdictions where the failure
 
                                      A-15
                                                                         ANNEXES


 
to be so organized, existing or in good standing individually or in the
aggregate would not have a material adverse effect on Acquiror. Each of
Acquiror and its subsidiaries is duly qualified or licensed to do business and
is in good standing (with respect to jurisdictions which recognize such
concept) in each jurisdiction in which the nature of its business or the
ownership, leasing or operation of its properties makes such qualification or
licensing necessary, except for those jurisdictions where the failure to be so
qualified or licensed or to be in good standing individually or in the
aggregate would not have a material adverse effect on Acquiror. Acquiror has
made available to the Company prior to the execution of this Agreement complete
and correct copies of its certificate of incorporation and by-laws and the
articles of incorporation and code of regulations of Merger Sub, each as
amended to date.
 
  (c) Subsidiaries. Section 3.2(c) of the Acquiror Disclosure Schedule includes
all the subsidiaries of Acquiror which as of the date of this Agreement are
Significant Subsidiaries (as defined in Rule 1-02 of Regulation S-X of the
SEC). All the outstanding shares of capital stock of, or other equity interests
in, each Significant Subsidiary (i) have been validly issued and are fully paid
and nonassessable, (ii) are owned directly or indirectly by Acquiror, free and
clear of all Liens and (iii) are free of any other restriction (including any
restriction on the right to vote, sell or otherwise dispose of such capital
stock or other ownership interests), except in the case of clauses (ii) and
(iii) for any Liens or restrictions that would not have a material adverse
effect on Acquiror.
 
  (d) Capital Structure. The authorized capital stock of Acquiror consists of
shares of (i) 400,000,000 shares of Acquiror Common Stock and (ii) 10,000,000
shares of preferred stock of Acquiror, consisting of 10,000 shares without par
value and 9,990,000 shares par value $1.00 per share ("Acquiror Authorized
Preferred Stock"). At the close of business on September 30, 1998: (i)
162,634,182 shares of Acquiror Common Stock were issued and outstanding; (ii)
20,834 shares of Acquiror Common Stock in the aggregate were held by Acquiror
in its treasury; (iii) no shares of Acquiror Preferred Stock were issued and
outstanding; (iv) 2,147,237 shares of Acquiror Common Stock were subject to
outstanding employee stock options pursuant to the plans set forth in Section
3.2(d)(iv) of the Acquiror Disclosure Schedule (collectively, the "Acquiror
Stock Plans") at September 30, 1998 (collectively, "Acquiror Employee Stock
Options"); and (v) 9,865,000 shares of Acquiror Common Stock were reserved for
issuance upon the conversion of outstanding convertible trust preferred
securities of a subsidiary trust of Acquiror pursuant to the Amended and
Restated Trust Agreement, dated as of December 12, 1997 among Newell Co., as
Depositor, The Chase Manhattan Bank, as Property Trustee, Chase Manhattan Bank
Delaware, as Delaware Trustee and C.R. Davenport, Brett E. Gries and Ronn L.
Claussen, as Administrative Trustees, the Junior Convertible Subordinated
Indenture for the 5.25% Convertible Subordinated Debentures, dated as of
December 12, 1997, among Newell Co. and The Chase Manhattan Bank, as Indenture
Trustee, and the Guaranty Agreement between Newell Co. and The Chase Manhattan
Bank, as Guaranty Trustee, dated December 12, 1997 (the "Trust Documents"). All
outstanding shares of capital stock of Acquiror are, and all shares which may
be issued will be, when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. Except (i) as set forth in
this Section 3.2(d), (ii) for changes since September 30, 1998 resulting from
the issuance of shares of Acquiror Common Stock pursuant to the Acquiror
Employee Stock Options, (iii) for up to an aggregate of 9,865,000 shares of
Acquiror Common Stock authorized for issuance as of September 30, 1998 upon the
conversion of outstanding convertible trust preferred securities of a
subsidiary trust of Acquiror pursuant to the Trust Documents, (iv) for
outstanding preferred stock purchase rights issued pursuant to the Rights
Agreement, dated as of October 20, 1988, by and between Acquiror and First
Chicago Trust Company of New York (formerly known as Morgan Shareholders
Service Trust Company) or the Rights Agreement, dated as of August 6, 1998, by
and between Acquiror and First Chicago Trust Company (referred to herein
collectively as the "Acquiror Rights Agreement"), and (v) as permitted by
Section 4.1(b)(ii), (x) there are not issued, reserved for issuance or
outstanding (A) any shares of capital stock or other voting securities of
Acquiror, (B) any securities of Acquiror convertible into or exchangeable or
exercisable for shares of capital stock or voting securities of Acquiror or (C)
any warrants, calls, options or other rights to
 
                                      A-16
ANNEXES


 
acquire from Acquiror or any Acquiror subsidiary, and no obligation of Acquiror
or any Acquiror subsidiary to issue, any capital stock, voting securities or
securities convertible into or exchangeable or exercisable for capital stock or
voting securities of Acquiror and (y) there are no outstanding obligations of
Acquiror or any Acquiror subsidiary to repurchase, redeem or otherwise acquire
any such securities or to issue, deliver or sell, or cause to be issued,
delivered or sold, any such securities. Neither Acquiror nor any Acquiror
subsidiary is a party to any voting agreement with respect to the voting of any
such securities. There are no outstanding (A) securities of Acquiror or any
Acquiror subsidiary convertible into or exchangeable or exercisable for shares
of capital stock or other voting securities or ownership interests in any
Acquiror subsidiary, (B) warrants, calls, options or other rights to acquire
from Acquiror or any Acquiror subsidiary, and no obligation of Acquiror or any
Acquiror subsidiary to issue, any capital stock, voting securities or other
ownership interests in, or any securities convertible into or exchangeable or
exercisable for any capital stock, voting securities or ownership interests in,
any Acquiror subsidiary or (C) obligations of Acquiror or any Acquiror
subsidiary to repurchase, redeem or otherwise acquire any such outstanding
securities of Acquiror subsidiaries or to issue, deliver or sell, or cause to
be issued, delivered or sold, any such securities.
 
  (e) Authority; Noncontravention. Each of Acquiror and Merger Sub has all
requisite corporate power and authority to enter into this Agreement and,
subject to the Acquiror Stockholder Approval (as defined in Section 3.2(m)), to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by Acquiror and Merger Sub and the consummation by
Acquiror and Merger Sub of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Acquiror and Merger
Sub, subject, in the case of the issuance of Acquiror Common Stock in
connection with the Merger, to the Acquiror Stockholder Approval. This
Agreement has been duly executed and delivered by Acquiror and Merger Sub and,
assuming the due authorization, execution and delivery by the Company,
constitutes a legal, valid and binding obligation of Acquiror and Merger Sub,
enforceable against Acquiror and Merger Sub in accordance with its terms. The
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated by this Agreement and compliance with the provisions
of this Agreement will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or
loss of a benefit under, or result in the creation of any Lien upon any of the
properties or assets of Acquiror or Merger Sub or any of its subsidiaries
under, (i) the certificate of incorporation or by-laws of Acquiror or the
comparable organizational documents of any of its subsidiaries, (ii) any loan
or credit agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, license or similar authorization
applicable to Acquiror or any of its subsidiaries or their respective
properties or assets or (iii) subject to the governmental filings and other
matters referred to in the following sentence, any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Acquiror or any of
its subsidiaries or their respective properties or assets, other than, in the
case of clauses (ii) and (iii), any such conflicts, violations, defaults,
rights, losses or Liens that individually or in the aggregate would not (x)
have a material adverse effect on Acquiror or (y) reasonably be expected to
materially impair or delay the ability of Acquiror or Merger Sub to perform its
obligations under this Agreement. No consent, approval, order or authorization
of, action by, or in respect of, or registration, declaration or filing with,
any Governmental Entity is required by Acquiror or any of its subsidiaries in
connection with the execution and delivery of this Agreement by Acquiror or the
consummation by Acquiror of the transactions contemplated hereby, except for:
(1) the filing with the SEC of the Joint Proxy Statement relating to the
Acquiror Stockholders Meeting; (2) the filing with and declaration of
effectiveness by the SEC of the Form S-4; (3) the filing with the SEC of such
reports under Section 13(a), 13(d), 15(d) or 16(a) of the Exchange Act as may
be required in connection with this Agreement and the transactions contemplated
hereby; (4) the filing of the Certificate of Merger with the Secretary of State
of the State of Ohio and such filings with Governmental Entities to satisfy the
applicable requirements of state securities or "blue sky" laws; (5) such
filings with and approvals of the NYSE to permit the shares of Acquiror Common
Stock that are
 
                                      A-17
                                                                         ANNEXES


 
to be issued in the Merger and under the Company Stock Plan to be listed on the
NYSE; (6) the filing of a premerger notification and report form by Acquiror
under the HSR Act; (7) such filings, consents, approvals, orders or
authorizations required to be made or obtained pursuant to Foreign Antitrust
Laws; and (8) such consents, approvals, orders or authorizations the failure of
which to be made or obtained individually or in the aggregate would not (x)
have a material adverse effect on Acquiror or (y) reasonably be expected to
materially impair or delay the ability of Acquiror or Merger Sub to perform its
obligations under this Agreement.
 
  (f) Reports; Undisclosed Liabilities. Acquiror has filed all required
reports, schedules, forms, statements and other documents (including exhibits
and all other information incorporated therein) with the SEC since January 1,
1995 (the "Acquiror SEC Documents"). As of their respective dates, the Acquiror
SEC Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such Acquiror SEC
Documents, and none of the Acquiror SEC Documents when filed 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. Except to the extent that information contained in any Acquiror SEC
Document has been revised or superseded by a later filed Acquiror SEC Document,
none of the Acquiror SEC Documents contains any untrue statement of a material
fact or omits 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 financial
statements of Acquiror included in the Acquiror SEC Documents comply as to
form, as of their respective dates of filing with the SEC, 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 (except, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto)
and fairly present in all material respects the consolidated financial position
of Acquiror and its consolidated subsidiaries as of the dates thereof and the
consolidated statements of income, stockholders' equity and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
recurring year-end audit adjustments). Except (A) as reflected in such
financial statements or in the notes thereto or (B) for liabilities incurred in
connection with this Agreement or the transactions contemplated hereby, neither
Acquiror nor any of its subsidiaries has any liabilities or obligations of any
nature which, individually or in the aggregate, would have a material adverse
effect on Acquiror.
 
  (g) Information Supplied. None of the information supplied or to be supplied
by Acquiror specifically for inclusion or incorporation by reference in (i) the
Form S-4 will, at the time the Form S-4 becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or (ii) the Joint Proxy Statement will, at the date it
is first mailed to Acquiror's stockholders or at the time of the Acquiror
Stockholders Meeting, 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. The Form S-4 and the Joint Proxy Statement will
comply as to form in all material respects with the requirements of the
Securities Act and the Exchange Act, respectively, and the rules and
regulations thereunder, except that no representation or warranty is made by
Acquiror with respect to statements made or incorporated by reference therein
based on information supplied by the Company specifically for inclusion or
incorporation by reference in the Form S-4 or the Joint Proxy Statement.
 
  (h) Absence of Certain Changes or Events. Except for liabilities incurred in
connection with this Agreement or the transactions contemplated hereby, since
December 31, 1997, Acquiror and its subsidiaries have conducted their business
only in the ordinary course or as disclosed in any Acquiror Filed SEC Document,
and there has not been (1) any declaration, setting aside or payment of any
 
                                      A-18
ANNEXES


 
dividend or other distribution (whether in cash, stock or property) with
respect to any of Acquiror's capital stock, other than regular quarterly cash
dividends on the Acquiror Common Stock, (2) any split, combination or
reclassification of any of Acquiror's capital stock or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for shares of Acquiror's capital stock, except for issuances
of Acquiror Common Stock upon the exercise of Acquiror Employee Stock Options
awarded prior to September 30, 1998 in accordance with their present terms or
issued pursuant to Section 4.1(b) or in accordance with the terms of the
Acquiror Stock Plans, (3) (A) any granting by Acquiror or any of its
subsidiaries to any current or former director, executive officer or other key
employee of Acquiror or its subsidiaries of any increase in compensation, bonus
or other benefits, except for normal increases in the ordinary course of
business or as was required under any employment agreements in effect as of the
date of the most recent audited financial statements included in the Acquiror
SEC Documents filed and publicly available prior to the date of this Agreement
(as amended to the date of this Agreement, the "Acquiror Filed SEC Documents"),
(B) any granting by Acquiror or any of its subsidiaries to any such current or
former director, executive officer or key employee of any increase in severance
or termination pay, except in the ordinary course of business or pursuant to
the Acquiror Stock Plans, or (C) any entry by Acquiror or any of its
subsidiaries into, or any amendment of, any employment, deferred compensation,
consulting, severance, termination or indemnification agreement with any such
current or former director, executive officer or key employee, other than in
the ordinary course of business, (4) except insofar as may have been disclosed
in the Acquiror Filed SEC Documents or required by a change in generally
accepted accounting principles, any change in accounting methods, principles or
practices by Acquiror materially affecting its assets, liabilities or business
or (5) except insofar as may have been disclosed in the Acquiror Filed SEC
Documents, any tax election that individually or in the aggregate would
reasonably be expected to have a material adverse effect on Acquiror or any of
its tax attributes or any settlement or compromise of any material income tax
liability.
 
  (i) Compliance with Applicable Laws; Litigation. Acquiror, its subsidiaries
and employees hold all permits, licenses, variances, exemptions, orders,
registrations and approvals of all Governmental Entities which are required for
the operation of the businesses of Acquiror and its subsidiaries (collectively,
the "Acquiror Permits") except where the failure to have any such Acquiror
Permits individually or in the aggregate would not have a material adverse
effect on Acquiror. Acquiror and its subsidiaries are in compliance with the
terms of the Acquiror Permits and all applicable statutes, laws, ordinances,
rules and regulations, except where the failure so to comply individually or in
the aggregate would not have a material adverse effect on Acquiror. As of the
date of this Agreement, except as disclosed in the Acquiror Filed SEC
Documents, no action, demand, requirement or investigation by any Governmental
Entity and no suit, action or proceeding by any person, in each case with
respect to Acquiror or any of its subsidiaries or any of their respective
properties is pending or, to the knowledge of Acquiror, threatened, other than,
in each case, those the outcome of which individually or in the aggregate would
not (i) reasonably be expected to have a material adverse effect on Acquiror or
(ii) reasonably be expected to materially impair or delay the ability of
Acquiror or Merger Sub to perform its obligations under this Agreement.
 
  (j) Absence of Changes in Benefit Plans. Since February 1, 1998, there has
not been any (i) adoption by Acquiror or any of its subsidiaries of any
collective bargaining agreement or any material bonus, pension, profit sharing,
deferred compensation, incentive compensation, stock ownership, stock purchase,
stock option, phantom stock, retirement, vacation, severance, disability, death
benefit, hospitalization, medical or other plan, arrangement or understanding
providing benefits to any current or former employee, officer or director of
Acquiror or any of its wholly owned subsidiaries (collectively, the "Acquiror
Benefit Plans") to which any of Acquiror's executive officers is a participant
or (ii) amendment to any Acquiror Benefit Plan that resulted in a material
increase in the benefits received or to be received thereunder by any executive
officer of Acquiror. Since January 1, 1998, there has not been any material
increase in the aggregate benefits provided under the Acquiror Benefits Plans.
 
                                      A-19
                                                                         ANNEXES


 
  (k) ERISA Compliance.
 
    (i) With respect to the Acquiror Benefit Plans, no event has occurred and,
  to the knowledge of Acquiror, there exists no condition or set of
  circumstances, in connection with which Acquiror or any of its subsidiaries
  could be subject to any liability that individually or in the aggregate
  would have a material adverse effect on Acquiror under ERISA, the Code or
  any other applicable law.
 
    (ii) Each Acquiror Benefit Plan has been administered in accordance with
  its terms, all applicable laws, including ERISA and the Code, and the terms
  of all applicable collective bargaining agreements, except for any failures
  so to administer any Acquiror Benefit Plan that individually or in the
  aggregate would not reasonably be expected to have a material adverse effect
  on Acquiror. Acquiror, its subsidiaries and all the Acquiror Benefit Plans
  are in compliance with the applicable provisions of ERISA, the Code and all
  other applicable laws and the terms of all applicable collective bargaining
  agreements, except for any failures to be in such compliance that
  individually or in the aggregate would not reasonably be expected to have a
  material adverse effect on Acquiror. Each Acquiror Benefit Plan that is
  intended to be qualified under Section 401(a) or 401(k) of the Code has
  received a favorable determination letter from the IRS that it is so
  qualified and each trust established in connection with any Acquiror Benefit
  Plan that is intended to be exempt from federal income taxation under
  Section 501(a) of the Code has received a determination letter from the IRS
  that such trust is so exempt. To the knowledge of Acquiror, no fact or event
  has occurred since the date of any determination letter from the IRS which
  is reasonably likely to affect adversely the qualified status of any such
  Acquiror Benefit Plan or the exempt status of any such trust, except for any
  occurrence that individually or in the aggregate would not reasonably be
  expected to have a material adverse effect on Acquiror, and to the knowledge
  of Acquiror, all contributions to, and payments from, such Plans which are
  required to be made in accordance with such Plans, ERISA or the Code have
  been timely made other than any failures that individually or in the
  aggregate would not reasonably be expected to have a material adverse effect
  on Acquiror.
 
    (iii) Except as any of the following either individually or in the
  aggregate would not reasonably be expected to have a material adverse effect
  on Acquiror, (x) neither Acquiror nor any ERISA Affiliate of Acquiror, which
  together with Acquiror would be deemed to be a "single employer" within the
  meaning of Section 4001(b) of ERISA, has incurred any liability under Title
  IV of ERISA and no condition exists that presents a risk to Acquiror or any
  ERISA Affiliate of Acquiror of incurring any such liability (other than
  liability for benefits or premiums to the Pension Benefit Guaranty
  Corporation arising in the ordinary course), (y) no Acquiror Benefit Plan
  has incurred an "accumulated funding deficiency" (within the meaning of
  Section 302 of ERISA or Section 412 of the Code) whether or not waived and
  (z) to the knowledge of Acquiror, there are not any facts or circumstances
  that would materially change the funded status of any Acquiror Benefit Plan
  that is a "defined benefit" plan (as defined in Section 3(35) of ERISA)
  since the date of the most recent actuarial report for such plan.
 
    (iv) Neither Acquiror nor any of its subsidiaries is a party to any
  collective bargaining or other labor union contract applicable to persons
  employed by Acquiror or any of its subsidiaries and no collective bargaining
  agreement is being negotiated by Acquiror or any of its subsidiaries, in
  each case that is material to Acquiror and its subsidiaries taken as a
  whole. As of the date of this Agreement, there is no labor dispute, strike
  or work stoppage against Acquiror or any of its subsidiaries pending or, to
  the knowledge of Acquiror, threatened which may interfere with the
  respective business activities of Acquiror or any of its subsidiaries,
  except where such dispute, strike or work stoppage individually or in the
  aggregate would not reasonably be expected to have a material adverse effect
  on Acquiror. As of the date of this Agreement, to the knowledge of Acquiror,
  none of Acquiror, any of its subsidiaries or any of their respective
  representatives or employees has committed any unfair labor practice in
  connection with the operation of the respective businesses of Acquiror or
  any of its subsidiaries, and there is no charge or complaint against
  Acquiror or any of its subsidiaries by the National Labor Relations Board or
  any
 
                                      A-20
ANNEXES


 
  comparable governmental agency pending or threatened in writing, except for
  any occurrence that individually or in the aggregate would not reasonably be
  expected to have a material adverse effect on Acquiror.
 
    (v) No Acquiror Benefit Plan provides medical benefits (whether or not
  insured) with respect to current or former employees after retirement or
  other termination of service the cost of which is material to Acquiror and
  its subsidiaries taken as a whole.
 
    (vi) No amounts payable under the Acquiror Benefit Plans solely as a
  result of the consummation of the transactions contemplated by this
  Agreement will fail to be deductible for federal income tax purposes by
  virtue of Section 280G of the Code. The consummation of the transactions
  contemplated by this Agreement will not, either alone or in combination with
  another event, (A) entitle any current or former employee, officer or
  director of Acquiror or any ERISA Affiliate of Acquiror to severance pay,
  unemployment compensation or any other payment, except as expressly provided
  in this Agreement (B) accelerate the time of payment or vesting, or increase
  the amount of compensation due any such employee, officer or director or (C)
  constitute a "change of control" under any Acquiror Benefit Plan.
 
    (vii) With respect to each Acquiror Benefit Plan: (x) no actions, suits,
  claims or disputes are pending or, to the knowledge of Acquiror, threatened,
  other than claims for benefits made in accordance with the terms of such
  Acquiror Benefit Plan, except for such actions, suits, claims or disputes
  that individually or in the aggregate would not reasonably be expected to
  have a material adverse effect on Acquiror; (y) no audits are pending with
  any governmental or regulatory agency and to the knowledge of Acquiror there
  are no facts which could give rise to any liability in the event of such an
  audit that either individually or in the aggregate would have a material
  adverse effect on the Acquiror; and (z) to the knowledge of Acquiror, all
  reports and returns required to be filed with any governmental agency or
  distributed to any participant in any Acquiror Benefit Plan have been so
  duly filed or distributed other than any failure to file or distribute such
  reports or returns that individually or in the aggregate would not
  reasonably be expected to have a material adverse effect on Acquiror.
 
    (viii) Acquiror has not incurred any liability under Code Section 4975,
  and no fact exists which could result in a liability to Acquiror under Code
  Section 4975 that would reasonably be expected to have a material adverse
  effect on the Company.
 
    (ix) Neither Acquiror nor any ERISA Affiliate contributes to a
  multiemployer plan described in Section 3(37) of ERISA, no withdrawal
  liability has been incurred with respect to any such plan and no withdrawal
  liability would be incurred upon the withdrawal from any such plan by
  Acquiror or any ERISA Affiliate as of the date hereof, except for any
  withdrawal that individually or in the aggregate would not have a material
  adverse effect on Acquiror.
 
  (l) Taxes.
 
    (i) Each of Acquiror and its subsidiaries has filed all material tax
  returns and reports required to be filed by it and all such returns and
  reports are complete and correct in all material respects, or requests for
  extensions to file such returns or reports have been timely filed, granted
  and have not expired, except to the extent that such failures to file, to be
  complete or correct or to have extensions granted that remain in effect
  individually or in the aggregate would not have a material adverse effect on
  Acquiror. Acquiror and each of its subsidiaries has paid (or Acquiror has
  paid on its behalf) all taxes shown as due on such returns, and the most
  recent financial statements contained in the Acquiror SEC Documents reflect
  an adequate reserve for all taxes payable by Acquiror and its subsidiaries
  for all taxable periods and portions thereof accrued through the date of
  such financial statements.
 
    (ii) No deficiencies for any taxes have been proposed, asserted or
  assessed against Acquiror or any of its subsidiaries that are not adequately
  reserved for, except for deficiencies that individually or in the aggregate
  would not have a material adverse effect on Acquiror.
 
                                      A-21
                                                                         ANNEXES


 
    (iii) Neither Acquiror nor any of its subsidiaries has taken any action or
  knows of any fact, agreement, plan or other circumstance that is reasonably
  likely to prevent the Merger from qualifying as a reorganization within the
  meaning of Section 368(a) of the Code.
 
  (m) Voting Requirements. The affirmative vote at the Acquiror Stockholders
Meeting (the "Acquiror Stockholder Approval") of the holders of a majority of
the voting power of all outstanding shares of Acquiror Common Stock is the only
vote of the holders of any class or series of Acquiror's capital stock
necessary to approve the issuance of Acquiror Common Stock to be issued
pursuant to this Agreement. The Board of Directors of Acquiror has duly and
validly approved and taken all corporate action required to be taken by the
Acquiror Board of Directors for the consummation of the transactions
contemplated by this Agreement.
 
  (n) State Takeover Statutes. The Board of Directors of Acquiror has taken all
necessary action so that no Takeover Statute (including the interested
stockholder provisions codified in Section 203 of the Delaware General
Corporation Law) or any applicable anti-takeover provision in the Acquiror's
certificate of incorporation or by-laws is applicable to the Merger and the
other transactions contemplated by this Agreement. To the knowledge of
Acquiror, no other state takeover statute is applicable to the Merger or the
other transactions contemplated by this Agreement.
 
  (o) Accounting Matters. Acquiror has disclosed to its independent public
accountants all actions taken by it or its subsidiaries that would impact the
accounting of the business combination to be effected by the Merger as a
pooling of interests. As of the date hereof, Acquiror believes that the Merger
will qualify for "pooling of interests" accounting.
 
  (p) Brokers. Except for Robert W. Baird & Co. Incorporated, no broker,
investment banker, financial advisor or other person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Acquiror or Merger Sub.
 
  (q) Ownership of the Company Capital Stock. Except for shares owned by
Acquiror Benefit Plans or shares held or managed for the account of another
person or as to which Acquiror is required to act as a fiduciary or in a
similar capacity, as of the date hereof, neither Acquiror nor, to its knowledge
without independent investigation, any of its affiliates, (i) beneficially owns
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, or
(ii) is party to any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of, in each case, shares of capital
stock of the Company.
 
  (r) Certain Contracts. Except as set forth in the Acquiror Filed SEC
Documents or as permitted pursuant to Section 4.1(b), neither Acquiror nor any
of its subsidiaries is a party to or bound by (i) any agreement relating to the
incurring of indebtedness (including sale and leaseback and capitalized lease
transactions and other similar financing transactions but excluding commercial
paper) providing for payment or repayment in excess of $100.0 million, (ii) any
"material contract" (as such term is defined in Item 601(b)(10) of Regulation
S-K of the SEC) or (iii) any non-competition agreement which purports to limit
in any material respect the manner in which, or localities in which, all or any
substantial portion of the business of Acquiror and its subsidiaries, taken as
a whole, is or would be conducted.
 
  (s) Opinion of Financial Advisor. Acquiror has received the opinion of Robert
W. Baird & Co. Incorporated, dated the date of this Agreement, to the effect
that, as of such date, the Exchange Ratio for the conversion of Company Common
Stock into Acquiror Common Stock pursuant to the Merger is fair to Acquiror
from a financial point of view, a signed copy of which opinion will be made
available to the Company promptly after the date hereof.
 
                                      A-22
ANNEXES


 
  (t) Environmental Matters.
 
    (i) During the three-year period immediately preceding the date of this
  Agreement, neither Acquiror nor any of its subsidiaries has received any
  written communication, whether from a Governmental Entity, citizens' group,
  employee or otherwise, alleging that Acquiror or any of its subsidiaries is
  not in compliance with applicable Environmental Laws, other than those
  instances of alleged noncompliance which individually or in the aggregate
  would not (x) reasonably be expected to have a material adverse effect on
  Acquiror or (y) reasonably be expected to materially impair or delay the
  ability of Acquiror to perform its obligations under this Agreement.
 
    (ii) There is no Environmental Claim pending or, to the knowledge of
  Acquiror, threatened, against Acquiror or any of its subsidiaries or, to the
  knowledge of Acquiror, against any person whose liability for any
  Environmental Claim Acquiror or any of its subsidiaries has or may have
  retained or assumed either contractually or by operation of law, other than
  those Environmental Claims which individually or in the aggregate would not
  (x) reasonably be expected to have a material adverse effect on Acquiror or
  (y) reasonably be expected to materially impair or delay the ability of
  Acquiror to perform its obligations under this Agreement.
 
    (iii) There are no present actions, activities, circumstances, conditions,
  events or incidents, including, without limitation, the Release or presence
  of any Hazardous Material at any property, that could reasonably be expected
  to result in liability under any Environmental Law for Acquiror or any of
  its subsidiaries or, to the knowledge of Acquiror, for any person whose
  liability for any Environmental Claim Acquiror or any of its subsidiaries
  has or may have retained or assumed either contractually or by operation of
  law, other than those liabilities which individually or in the aggregate
  would not (x) reasonably be expected to have a material adverse effect on
  Acquiror or (y) reasonably be expected to materially impair or delay the
  ability of Acquiror to perform its obligations under this Agreement.
 
  (u) Intellectual Property.
 
    (i) Acquiror and its subsidiaries own or have a binding, enforceable right
  to use all letters patent, patent applications, trade names, brand names,
  trademarks, service marks, trademark and service mark registrations and
  applications, copyright registrations and applications, both domestic and
  foreign (collectively, the "Acquiror Intellectual Property") used in their
  businesses substantially as currently conducted except for such Acquiror
  Intellectual Property, the failure of which to own or have a binding,
  enforceable right to use individually or in the aggregate would not
  reasonably be expected to have a material adverse effect on Acquiror.
  Neither Acquiror nor any of its subsidiaries has received any written notice
  of infringement of or conflict with and, to the knowledge of the Acquiror,
  there are no infringements of or conflicts with, the rights of others with
  respect to the use of any Acquiror Intellectual Property that individually
  or in the aggregate, in either such case, would reasonably be expected to
  have a material adverse effect on Acquiror or would reasonably be expected
  to materially impair or delay the ability of Acquiror to perform its
  obligations under this Agreement. Neither Acquiror nor any of its
  subsidiaries has received any written notice that the conduct of another
  person's business or the nature of any of products sold or services provided
  by another person infringes upon or conflicts with Acquiror's registered
  trademarks set forth in its Annual Report on Form 10-K for the fiscal year
  ended December 31, 1997 other than those infringements or conflicts that
  individually or in the aggregate would not reasonably be expected to have a
  material adverse effect on Acquiror or would not reasonably be expected to
  materially impair or delay the ability of Acquiror to perform its
  obligations under this Agreement.
 
    (ii) Acquiror has conducted a comprehensive review of its computer
  systems' ability to process properly year date codes after December 31,
  1999, has formulated a plan to modify or replace programs where necessary
  and believes that all necessary reprogramming efforts will be completed
  prior to December 31, 1999, except for any failures to complete such
  reprogramming efforts as would not individually or in the aggregate have a
  material adverse effect on Acquiror.
 
                                      A-23
                                                                         ANNEXES


 
                                   ARTICLE 4
 
                   Covenants Relating to Conduct of Business
 
  Section 4.1 Conduct of Business.
 
  (a) Conduct of Business by the Company. Except as set forth in Section 4.1(a)
of the Company Disclosure Schedule, except as otherwise expressly contemplated
by this Agreement or except as consented to by Acquiror, such consent not to be
unreasonably withheld or delayed, during the period from the date of this
Agreement to the Effective Time, the Company shall, and shall cause its
subsidiaries to, carry on their respective businesses in the ordinary course
consistent with past practice and in compliance in all material respects with
all applicable laws and regulations and, to the extent consistent therewith,
use all reasonable efforts to preserve intact their current business
organizations (other than internal organizational realignments), use all
reasonable efforts to keep available the services of their current officers and
other key employees and preserve their relationships with those persons having
business dealings with them to the end that their goodwill and ongoing
businesses shall be unimpaired at the Effective Time. Without limiting the
generality of the foregoing (but subject to the above exceptions), during the
period from the date of this Agreement to the Effective Time, the Company shall
not, and shall not permit any of its subsidiaries to:
 
    (i) other than dividends and distributions by a direct or indirect wholly
  owned subsidiary of the Company to its parent, or by a subsidiary that is
  partially owned by the Company or any of its subsidiaries, provided that the
  Company or any such subsidiary receives or is to receive its proportionate
  share thereof, and other than the regular quarterly cash dividends with
  respect to the Company Common Stock, (x) declare, set aside or pay any
  dividends on, or make any other distributions in respect of, any of its
  capital stock, (y) split, combine or reclassify any of its capital stock or
  issue or authorize the issuance of any other securities in respect of, in
  lieu of or in substitution for shares of its capital stock, except for
  issuances of the Company Common Stock upon the exercise of the Company
  Employee Stock Options under the Company Stock Plan or in connection with
  other awards under the Company Stock Plan, in each case, outstanding as of
  September 30, 1998 and in accordance with their present terms or issued
  pursuant to Section 4.1(a)(ii) or (z) except pursuant to agreements entered
  into with respect to the Company Stock Plan that are in effect as of the
  close of business on September 30, 1998, purchase, redeem or otherwise
  acquire any shares of capital stock of the Company or any of its
  subsidiaries or any other securities thereof or any rights, warrants or
  options to acquire any such shares or other securities;
 
    (ii)  issue, deliver, sell, pledge or otherwise encumber or subject to any
  Lien any shares of its capital stock, any other voting securities or any
  securities convertible into, or any rights, warrants or options to acquire,
  any such shares, voting securities or convertible securities, other than the
  issuance of Company Common Stock upon the exercise of the Company Employee
  Stock Options or in connection with other awards under the Company Stock
  Plan (I) outstanding as of September 30, 1998 and in accordance with their
  present terms or granted after the date thereof in the ordinary course of
  business consistent with past practice or (II) after consulting with
  Acquiror, otherwise granted after the date hereof so long as (x) the amount
  of the Company Common Stock subject to the Company Employee Stock Options
  and/or other awards under the Company Stock Plan granted after September 30,
  1998 do not exceed 1,100,000 shares of Company Common Stock in the
  aggregate; and (y) the amount of performance shares under the Company Stock
  Plan granted after September 30, 1998 do not exceed 125,000 performance
  shares in the aggregate; provided, however, that any such grants made after
  the date of this Agreement shall not have terms that would impair the
  parties' ability to obtain pooling of interests accounting treatment for the
  Merger (including, without limitation, provisions for accelerated vesting
  upon a "change of control" of the Company);
 
    (iii) amend its articles of incorporation, code of regulations or other
  comparable organizational documents, or, in the case of the Company, merge
  or consolidate with any person;
 
                                      A-24
ANNEXES


 
    (iv) acquire or agree to acquire by merging or consolidating with, or by
  purchasing a substantial portion of the assets of, or by any other manner,
  any business or any person, except for such acquisitions for which the
  aggregate consideration (including indebtedness directly or indirectly
  assumed) is less than $200.0 million;
 
    (v) sell, lease, license, mortgage or otherwise encumber or subject to any
  Lien or otherwise dispose of any of its properties or assets (x) other than
  in the ordinary course of business consistent with past practice or (y) for
  an aggregate consideration (including indebtedness directly or indirectly
  assumed) in excess of $200.0 million; provided, however, that, prior to
  effecting any such sale or disposition, the Company obtains written
  assurance from its independent public accountants that such sale or
  disposition will not impair the parties' ability to obtain pooling of
  interests accounting treatment for the Merger;
 
    (vi) take any action that would cause the representations and warranties
  set forth in clauses (3), (4) or (5) of Section 3.1(g) to no longer be true
  and correct (with each reference in Section 3.1(g) to "ordinary course of
  business" being deemed for purposes of this Section 4.1(a)(vi) to be
  immediately followed by "consistent with past practice");
 
    (vii) except as provided in Section 4.2, the Company shall not amend,
  modify or waive any provision of the Company Rights Agreement, and shall not
  take any action to redeem the rights issued thereunder or render the rights
  issued thereunder inapplicable to a transaction, other than to permit
  another transaction that the Board of Directors of the Company has
  determined is a Company Superior Proposal;
 
    (viii) license (other than pursuant to agreements outstanding as of the
  date hereof), transfer or otherwise dispose of, or permit to lapse, any
  rights in the Material Company Trademarks other than licenses in the
  ordinary course of business consistent with past practice; or
 
    (ix) authorize, or commit or agree to take, any of the foregoing actions;
 
provided that the limitations set forth in this Section 4.1(a) (other than
clause (iii)) shall not apply to any transaction to which the only parties are
the Company and any wholly owned subsidiary or subsidiaries of the Company.
 
  (b) Conduct of Business by Acquiror. Except as otherwise expressly
contemplated by this Agreement or except as consented to by the Company, such
consent not to be unreasonably withheld or delayed, during the period from the
date of this Agreement to the Effective Time, Acquiror shall, and shall cause
its subsidiaries to, carry on their respective businesses in the ordinary
course consistent with past practice and in compliance in all material respects
with all applicable laws and regulations and, to the extent consistent
therewith, use all reasonable efforts to preserve intact their current business
organizations (other than internal organizational realignments), use all
reasonable efforts to keep available the services of their current officers and
other key employees and preserve their relationships with those persons having
business dealings with them to the end that their goodwill and ongoing
businesses shall be unimpaired at the Effective Time. Without limiting the
generality of the foregoing (but subject to the above exceptions), during the
period from the date of this Agreement to the Effective Time, Acquiror shall
not, and shall not permit any of its subsidiaries to:
 
    (i) other than dividends and distributions by a direct or indirect wholly
  owned subsidiary of Acquiror to its parent, or by a subsidiary that is
  partially owned by Acquiror or any of its subsidiaries, provided that
  Acquiror or any such subsidiary receives or is to receive its proportionate
  share thereof, and other than the regular quarterly cash dividends with
  respect to the Acquiror Common Stock, (x) declare, set aside or pay any
  dividends on, or make any other distributions in respect of, any of its
  capital stock, (y) split, combine or reclassify any of its capital stock or
  issue or authorize the issuance of any other securities in respect of, in
  lieu of or in substitution for shares of its capital stock, except for
  issuances of Acquiror Common Stock upon
 
                                      A-25
                                                                         ANNEXES


 
  the exercise of Acquiror Employee Stock Options under the Acquiror Stock
  Plans or in connection with other awards under the Acquiror Stock Plans, in
  each case, outstanding as of September 30, 1998 and in accordance with their
  present terms or issued pursuant to Section 4.1(b)(ii) or (z) purchase,
  redeem or otherwise acquire any shares of capital stock of Acquiror or any
  of its subsidiaries or any other securities thereof or any rights, warrants
  or options to acquire any such shares or other securities;
 
    (ii) issue, deliver, sell, pledge or otherwise encumber or subject to any
  Lien any shares of its capital stock, any other voting securities or any
  securities convertible into, or any rights, warrants or options to acquire,
  any such shares, voting securities or convertible securities, other than (x)
  the issuance of shares of Acquiror Common Stock permitted by Section
  4.1(b)(iv), (y) the issuance of up to an aggregate of 9,865,000 shares of
  Acquiror Common Stock upon the conversion of outstanding convertible trust
  preferred securities of a subsidiary trust of Acquiror pursuant to the Trust
  Documents and (z) the issuance of Acquiror Common Stock or options to
  purchase shares of Acquiror Common Stock upon the exercise of Acquiror
  Employee Stock Options or in connection with other awards under the Acquiror
  Stock Plans (I) outstanding as of September 30, 1998 and in accordance with
  their present terms or granted after the date thereof in the ordinary course
  of business consistent with past practice or (II) after consulting with the
  Company, otherwise granted after the date hereof so long as the amount of
  Acquiror Common Stock subject to Acquiror Employee Stock Options and/or
  other awards under the Acquiror Stock Plans granted after September 30, 1998
  do not exceed 1,100,000 shares of Acquiror Common Stock in the aggregate;
  provided, however, that any such grants made after the date of this
  Agreement shall not have terms that would impair the parties' ability to
  obtain pooling of interests accounting treatment for the Merger;
 
    (iii) amend its certificate of incorporation, by-laws or other comparable
  organizational documents;
 
    (iv) acquire or agree to acquire by merging or consolidating with, or by
  purchasing a substantial portion of the assets of, or by any other manner,
  any business or any person, except for such acquisitions for which the
  aggregate consideration (including indebtedness directly or indirectly
  assumed) is not more than $500.0 million, of which not more than $300.0
  million may be paid through the issuance of shares of Acquiror Common Stock
  which shall be valued at the closing price of the Acquiror Common Stock on
  the NYSE on the day prior to the announcement of any such acquisition;
 
    (v) sell, lease, license, mortgage or otherwise encumber or subject to any
  Lien or otherwise dispose of any of its properties or assets (x) other than
  in the ordinary course of business consistent with past practice or (y) for
  an aggregate consideration (including indebtedness directly or indirectly
  assumed) in excess of $200.0 million; provided, however, that, prior to
  effecting any such sale or disposition, Acquiror obtains written assurance
  from its independent public accountants that such sale or disposition will
  not impair the parties' ability to obtain pooling of interests accounting
  treatment for the Merger;
 
    (vi) take any action that would cause the representations and warranties
  set forth in clauses (3), (4) or (5) of Section 3.2(h) to no longer be true
  and correct (with each reference in Section 3.2(h) to "ordinary course of
  business" being deemed for purposes of this Section 4.l(b)(vi) to be
  immediately followed by "consistent with past practice");
 
    (vii) except as provided in Section 4.3, Acquiror shall not amend, modify
  or waive any provision of the Acquiror Rights Agreement, and shall not take
  any action to redeem the rights issued thereunder or render the rights
  issued thereunder inapplicable to a transaction, other than to permit
  another transaction that the Board of Directors of Acquiror has determined
  is an Acquiror Superior Proposal; or
 
    (viii) authorize, or commit or agree to take, any of the foregoing
  actions;
 
                                      A-26
ANNEXES


 
provided that the limitations set forth in this Section 4.1(b) (other than
clause (iii)) shall not apply to any transaction to which the only parties are
Acquiror and any wholly owned subsidiary or subsidiaries of Acquiror.
 
  (c) Coordination of Dividends. Subject to Section 5.14, each of Acquiror and
the Company shall coordinate with the other regarding the declaration and
payment of dividends in respect of the Acquiror Common Stock and the Company
Common Stock and the record dates and payment dates relating thereto, it being
the intention of Acquiror and the Company that any holder of the Company Common
Stock or Acquiror Common Stock shall not receive two dividends, or fail to
receive one dividend, for any single calendar quarter with respect to its
shares of the Company Common Stock and/or shares of Acquiror Common Stock,
including shares of Acquiror Common Stock that a holder receives in exchange
for shares of the Company Common Stock pursuant to the Merger.
 
  (d) Other Actions. Except as required by law, the Company and Acquiror shall
not, and shall not permit any of their respective subsidiaries to, voluntarily
take any action that would reasonably be expected to result in any of the
conditions to the Merger set forth in Article 6 not being satisfied.
 
  (e) Advice of Changes. The Company and Acquiror shall promptly advise the
other party orally and in writing to the extent it has knowledge of any change
or event having, or which, insofar as can reasonably be foreseen, would
reasonably be expected to have a material adverse effect on such party or on
the truth of their respective representations and warranties or the ability of
the conditions set forth in Article 6 to be satisfied; provided, however, that
no such notification shall affect the representations, warranties, covenants or
agreements of the parties (or remedies with respect thereto) or the conditions
to the obligations of the parties under this Agreement.
 
  (f) Control of Other Party's Business. Nothing contained in this Agreement
shall give Acquiror, directly or indirectly, the right to control or direct the
Company's operations prior to the Effective Time. Nothing contained in this
Agreement shall give the Company, directly or indirectly, the right to control
or direct Acquiror's operations prior to the Effective Time. Prior to the
Effective Time, each of Acquiror and the Company shall exercise, consistent
with the terms and conditions of this Agreement, complete control and
supervision over its respective operations.
 
  Section 4.2 No Solicitation by the Company.
 
  (a) The Company shall not, nor shall it permit any of its subsidiaries to,
nor shall it authorize or permit any of its directors, officers or employees or
any investment banker, financial advisor, attorney, accountant or other
representative retained by it or any of its subsidiaries to, directly or
indirectly through another person, (i) solicit, initiate or encourage
(including by way of furnishing information), or take any other action designed
to facilitate, any inquiries or the making of any proposal which constitutes
any Company Takeover Proposal (as defined below) or (ii) participate in any
discussions or negotiations regarding any Company Takeover Proposal; provided,
however, that if, at any time, the Board of Directors of the Company determines
in good faith, after consultation with outside counsel, that it is necessary to
do so in order to act in a manner consistent with its fiduciary duties to the
Company's stockholders under applicable law, the Company may, in response to a
Company Superior Proposal (as defined in Section 4.2(b)) which was not
solicited by it or which did not otherwise result from a breach of this Section
4.2(a) and subject to providing prior written notice of its decision to take
such action to Acquiror (the "Company Notice") and compliance with Section
4.2(c), following delivery of the Company Notice (x) furnish information with
respect to the Company and its subsidiaries to any person making a Company
Superior Proposal pursuant to a customary confidentiality agreement (as
determined by the Company after consultation with its outside counsel) that is
no less restrictive than the Confidentiality Agreement and (y) participate in
discussions or negotiations regarding such Company Superior Proposal. For
purposes of this Agreement, "Company Takeover Proposal" means any inquiry,
proposal or offer from any person relating to any (w) direct or indirect
acquisition or
 
                                      A-27
                                                                         ANNEXES


 
purchase of a business that constitutes 15% or more of the net revenues, net
income or the assets of the Company and its subsidiaries, taken as a whole, (x)
direct or indirect acquisition or purchase of 15% or more of any class of
equity securities of the Company or any of its subsidiaries whose business
constitutes 15% or more of the net revenues, net income or assets of the
Company and its subsidiaries, taken as a whole, (y) tender offer or exchange
offer that if consummated would result in any person beneficially owning 15% or
more of any class of equity securities of the Company or any of its
subsidiaries whose business constitutes 15% or more of the net revenues, net
income or assets of the Company and its subsidiaries, taken as a whole, or (z)
merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving the Company or any of its
subsidiaries whose business constitutes 15% or more of the net revenues, net
income or assets of the Company and its subsidiaries, taken as a whole, other
than the transactions contemplated by this Agreement.
 
  (b) Except as expressly permitted by this Section 4.2, neither the Board of
Directors of the Company nor any committee thereof shall (i) withdraw or
modify, or propose publicly to withdraw or modify, in a manner adverse to
Acquiror, the approval or recommendation by such Board of Directors or such
committee of the Merger or this Agreement, (ii) approve or recommend, or
propose publicly to approve or recommend, any Company Takeover Proposal or
(iii) cause the Company to enter into any letter of intent, agreement in
principle, acquisition agreement or other similar agreement (each, a "Company
Acquisition Agreement") related to any Company Takeover Proposal.
Notwithstanding the foregoing, in the event that the Board of Directors of the
Company determines in good faith, after consultation with outside counsel, that
in light of a Company Superior Proposal it is necessary to do so in order to
act in a manner consistent with its fiduciary duties to the Company's
stockholders under applicable law, the Board of Directors of the Company may
(subject to this and the following sentences) terminate this Agreement in order
to concurrently enter into such Company Acquisition Agreement with respect to a
Company Superior Proposal; provided, however, that the Company may not
terminate this Agreement pursuant to this Section 4.2(b) unless and until (i)
three business days have elapsed following the delivery to Acquiror of a
written notice of such determination by the Board of Directors of the Company
and (x) the Company has delivered to Acquiror the written notice required by
Section 4.2(c) below, and (y) during such three business day period, the
Company otherwise cooperates with Acquiror with respect to the Company Takeover
Proposal that constitutes a Company Superior Proposal with the intent of
enabling Acquiror to engage in good faith negotiations so that the transactions
contemplated hereby may be effected and (ii) at the end of such three business
day period the Board of Directors of the Company continues reasonably to
believe that the Company Takeover Proposal constitutes a Company Superior
Proposal. For purposes of this Agreement, a "Company Superior Proposal" means
any proposal made by a third party to acquire, directly or indirectly,
including pursuant to a tender offer, exchange offer, merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction, for consideration consisting of cash and/or securities, more than
50% of the combined voting power of the shares of Company Common Stock then
outstanding or all or substantially all the assets of the Company and otherwise
on terms which the Board of Directors of the Company determines in its good
faith judgment (based on the advice of a financial advisor of nationally
recognized reputation) to be more favorable to the Company's stockholders than
the Merger and for which financing, to the extent required, is then committed
or which, in the good faith judgment of the Board of Directors of the Company,
is reasonably capable of being obtained by such third party.
 
  (c) In addition to the obligations of the Company set forth in paragraphs (a)
and (b) of this Section 4.2, the Company shall immediately advise Acquiror
orally and in writing of any request for information or of any Company Takeover
Proposal, the material terms and conditions of such request or Company Takeover
Proposal and the identity of the person making such request or Company Takeover
Proposal. The Company will keep Acquiror reasonably informed of the status and
details (including amendments and proposed amendments) of any such request or
Company Takeover Proposal.
 
                                      A-28
ANNEXES


 
  (d) Nothing contained in this Section 4.2 shall prohibit the Company from
taking and disclosing to its stockholders a position contemplated by Rule 14e-
2(a) promulgated under the Exchange Act or from making any disclosure to the
Company's stockholders if, in the good faith judgment of the Board of Directors
of the Company, after consultation with outside counsel, failure so to disclose
would be inconsistent with its obligations under applicable law; provided,
however, that, except as expressly permitted by paragraph (a) of this Section
4.2 in connection with a Company Superior Proposal, neither the Company nor its
Board of Directors nor any committee thereof shall withdraw or modify, or
propose publicly to withdraw or modify, its position with respect to this
Agreement or the Merger or approve or recommend, or propose publicly to approve
or recommend, a Company Takeover Proposal.
 
  Section 4.3 No Solicitation by Acquiror.
 
  (a) Acquiror shall not, nor shall it permit any of its subsidiaries to, nor
shall it authorize or permit any of its directors, officers or employees or any
investment banker, financial advisor, attorney, accountant or other
representative retained by it or any of its subsidiaries to, directly or
indirectly through another person, (i) solicit, initiate or encourage
(including by way of furnishing information), or take any other action designed
to facilitate, any inquiries or the making of any proposal which constitutes
any Acquiror Takeover Proposal (as defined below) or (ii) participate in any
discussions or negotiations regarding any Acquiror Takeover Proposal; provided,
however, that if, at any time, the Board of Directors of Acquiror determines in
good faith, after consultation with outside counsel, that it is necessary to do
so in order to act in a manner consistent with its fiduciary duties to
Acquiror's stockholders under applicable law, Acquiror may, in response to an
Acquiror Superior Proposal (as defined in Section 4.3(b)) which was not
solicited by it or which did not otherwise result from a breach of this Section
4.3(a) and subject to providing prior written notice of its decision to take
such action to the Company (the "Acquiror Notice") and compliance with Section
4.3(c), following delivery of the Acquiror Notice (x) furnish information with
respect to Acquiror and its subsidiaries to any person making an Acquiror
Superior Proposal pursuant to a customary confidentiality agreement (as
determined by Acquiror after consultation with its outside counsel) that is no
less restrictive than the Confidentiality Agreement and (y) participate in
discussions or negotiations regarding such Acquiror Superior Proposal. For
purposes of this Agreement, "Acquiror Takeover Proposal" means any inquiry,
proposal or offer from any person relating to any (w) direct or indirect
acquisition or purchase of a business that constitutes 15% or more of the net
revenues, net income or the assets of Acquiror and its subsidiaries, taken as a
whole, (x) direct or indirect acquisition or purchase of 15% or more of any
class of equity securities of Acquiror or of 15% or more of any class of equity
securities of any of its subsidiaries whose business constitutes 15% or more of
the net revenues, net income or assets of Acquiror and its subsidiaries, taken
as a whole, (y) tender offer or exchange offer that if consummated would result
in any person beneficially owning 15% or more of any class of equity securities
of Acquiror or any of its subsidiaries whose business constitutes 15% or more
of the net revenues, net income or assets of Acquiror and its subsidiaries,
taken as a whole, or (z) merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
Acquiror or any of its subsidiaries whose business constitutes 15% or more of
the net revenues, net income or assets of Acquiror and its subsidiaries, taken
as a whole, other than the transactions contemplated by this Agreement.
 
  (b) Except as expressly permitted by this Section 4.3, neither the Board of
Directors of Acquiror nor any committee thereof shall (i) withdraw or modify,
or propose publicly to withdraw or modify, in a manner adverse to the Company,
the approval or recommendation by such Board of Directors or such committee of
the Merger, this Agreement or the issuance of Acquiror Common Stock in
connection with the Merger, (ii) approve or recommend, or propose publicly to
approve or recommend, any Acquiror Takeover Proposal or (iii) cause Acquiror to
enter into any letter of intent, agreement in principle, acquisition agreement
or other similar agreement (each, an "Acquiror Acquisition Agreement") related
to any Acquiror Takeover Proposal. Notwithstanding the foregoing, in the event
 
                                      A-29
                                                                         ANNEXES


 
that the Board of Directors of Acquiror determines in good faith, after
consultation with outside counsel, that in light of an Acquiror Superior
Proposal it is necessary to do so in order to act in a manner consistent with
its fiduciary duties to Acquiror's stockholders under applicable law, the Board
of Directors of Acquiror may (subject to this and the following sentences)
terminate this Agreement in order to concurrently enter into such Acquiror
Acquisition Agreement with respect to an Acquiror Superior Proposal; provided,
however, that Acquiror may not terminate this Agreement pursuant to this
Section 4.3(b) unless and until (i) three business days have elapsed following
the delivery to the Company of a written notice of such determination by the
Board of Directors of Acquiror and (x) Acquiror has delivered to the Company
the written notice required by Section 4.3(c) below, and (y) during such three
business day period, Acquiror otherwise cooperates with the Company with
respect to an Acquiror Takeover Proposal that constitutes an Acquiror Superior
Proposal with the intent of enabling the Company to engage in good faith
negotiations so that the transactions contemplated hereby may be effected and
(ii) at the end of such three business day period the Board of Directors of
Acquiror continues reasonably to believe that the Acquiror Takeover Proposal
constitutes an Acquiror Superior Proposal. For purposes of this Agreement, an
"Acquiror Superior Proposal" means any proposal made by a third party to
acquire, directly or indirectly, including pursuant to a tender offer, exchange
offer, merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction, for consideration consisting
of cash and/or securities, more than 50% of the combined voting power of the
shares of Acquiror Common Stock then outstanding or all or substantially all
the assets of Acquiror and otherwise on terms which the Board of Directors of
Acquiror determines in its good faith judgment (based on the advice of a
financial advisor of nationally recognized reputation) to be more favorable to
Acquiror's stockholders than the Merger and for which financing, to the extent
required, is then committed or which, in the good faith judgment of the Board
of Directors of Acquiror, is reasonably capable of being obtained by such third
party.
 
  (c) In addition to the obligations of Acquiror set forth in paragraphs (a)
and (b) of this Section 4.3, Acquiror shall immediately advise the Company
orally and in writing of any request for information or of any Acquiror
Takeover Proposal, the material terms and conditions of such request or
Acquiror Takeover Proposal and the identity of the person making such request
or Acquiror Takeover Proposal. Acquiror will keep the Company reasonably
informed of the status and details (including amendments and proposed
amendments) of any such request or Acquiror Takeover Proposal.
 
  (d) Nothing contained in this Section 4.3 shall prohibit Acquiror from taking
and disclosing to its stockholders a position contemplated by Rule 14e-2(a)
promulgated under the Exchange Act or from making any disclosure to Acquiror's
stockholders if, in the good faith judgment of the Board of Directors of
Acquiror, after consultation with outside counsel, failure so to disclose would
be inconsistent with its obligations under applicable law; provided, however,
that, except as expressly permitted by paragraph (a) of this Section 4.3 in
connection with an Acquiror Superior Proposal, neither Acquiror nor its Board
of Directors nor any committee thereof shall withdraw or modify, or propose
publicly to withdraw or modify, its position with respect to this Agreement,
the Merger, the issuance of Acquiror Common Stock in connection with the
Merger, or approve or recommend, or propose publicly to approve or recommend,
an Acquiror Takeover Proposal.
 
                                      A-30
ANNEXES


 
                                   ARTICLE 5
 
                             Additional Agreements
 
  Section 5.1 Preparation of the Form S-4 and the Joint Proxy Statement;
Stockholders Meetings.
 
  (a) As soon as practicable following the date of this Agreement, the Company
and Acquiror shall prepare and file with the SEC the Joint Proxy Statement and
Acquiror shall prepare and file with the SEC the Form S-4, in which the Joint
Proxy Statement will be included as a prospectus. Each of the Company and
Acquiror shall use reasonable best efforts to have the Form S-4 declared
effective under the Securities Act as promptly as practicable after such
filing. The Company will use all reasonable best efforts to cause the Joint
Proxy Statement to be mailed to the Company's stockholders, and Acquiror will
use all reasonable best efforts to cause the Joint Proxy Statement to be mailed
to Acquiror's stockholders, in each case as promptly as practicable after the
Form S-4 is declared effective under the Securities Act. Acquiror shall also
take any action (other than qualifying to do business in any jurisdiction in
which it is not now so qualified or to file a general consent to service of
process) required to be taken under any applicable state securities laws in
connection with the issuance of Acquiror Common Stock in the Merger and the
Company shall furnish all information concerning the Company and the holders of
the Company Common Stock as may be reasonably requested in connection with any
such action. No filing of, or amendment or supplement to, the Form S-4 will be
made by Acquiror or to the Joint Proxy Statement will be made by Acquiror or
the Company without providing the other party the opportunity to review and
comment thereon. Acquiror will advise the Company, promptly after it receives
notice thereof, of the time when the Form S-4 has become effective or any
supplement or amendment has been filed, the issuance of any stop order, the
suspension of the qualification of the Acquiror Common Stock issuable in
connection with the Merger for offering or sale in any jurisdiction, or any
request by the SEC for amendment of the Joint Proxy Statement or the Form S-4
or comments thereon and responses thereto or requests by the SEC for additional
information. If at any time prior to the Effective Time any information
relating to the Company or Acquiror, or any of their respective affiliates,
officers or directors, should be discovered by the Company or Acquiror which
should be set forth in an amendment or supplement to any of the Form S-4 or the
Joint Proxy Statement, so that any of such documents would not include any
misstatement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, the party which discovers such information shall
promptly notify the other party hereto and an appropriate amendment or
supplement describing such information shall be promptly filed with the SEC
and, to the extent required by law, disseminated to the stockholders of the
Company and Acquiror.
 
  (b) The Company shall, as soon as practicable following the date of this
Agreement, duly call, give notice of, convene and hold a meeting of its
stockholders (the "Company Stockholders Meeting") for the purpose of obtaining
the Company Stockholder Approval and shall, through its Board of Directors,
recommend to its stockholders the approval and adoption of this Agreement, the
Merger and the other transactions contemplated hereby. Without limiting the
generality of the foregoing but subject to its rights pursuant to Section 4.2
and Section 7.1(f), the Company agrees that its obligations pursuant to the
first sentence of this Section 5.1(b) shall not be affected by the
commencement, public proposal, public disclosure or communication to the
Company of any Company Takeover Proposal.
 
  (c) Acquiror shall, as soon as practicable following the date of this
Agreement, duly call, give notice of, convene and hold a meeting of its
stockholders (the "Acquiror Stockholders Meeting") for the purposes of
obtaining the Acquiror Stockholder Approval and the change of Acquiror's name
to "Newell Rubbermaid Inc." and shall, through its Board of Directors,
recommend to its stockholders the approval of the issuance of Acquiror Common
Stock to be issued pursuant to this Agreement. Without limiting the generality
of the foregoing but subject to its rights pursuant to Section 4.3 and Section
7.1(d), Acquiror agrees that its obligations pursuant to the first sentence of
this Section 5.1(c)
 
                                      A-31
                                                                         ANNEXES


 
shall not be affected by the commencement, public proposal, public disclosure
or communication to Acquiror of any Acquiror Takeover Proposal.
 
  (d) Acquiror and the Company will use all reasonable efforts to hold the
Company Stockholders Meeting and the Acquiror Stockholders Meeting on the same
date and as soon as practicable after the date hereof.
 
  Section 5.2 Letters of the Company's Accountants.
 
  (a) The Company shall use reasonable best efforts to cause to be delivered to
Acquiror two letters from the Company's independent accountants, one dated a
date within two business days before the date on which the Form S-4 shall
become effective and one dated a date within two business days before the
Closing Date, each addressed to Acquiror, in form and substance reasonably
satisfactory to Acquiror and customary in scope and substance for comfort
letters delivered by independent public accountants in connection with
registration statements similar to the Form S-4.
 
  (b) The Company shall use reasonable best efforts to cause to be delivered to
Acquiror and Acquiror's independent accountants two letters from the Company's
independent accountants addressed to Acquiror and the Company, one dated as of
the date the Form S-4 is effective reporting that, as of the date of the
letter, the Company qualifies as a "combining company" under Opinion 16 of the
Accounting Principles Board and applicable SEC rules and regulations, and one
dated as of the Closing Date reporting that the Merger will qualify as a
"pooling of interests" transaction under Opinion 16 of the Accounting
Principles Board and applicable SEC rules and regulations.
 
  Section 5.3 Letters of Acquiror's Accountants.
 
  (a) Acquiror shall use reasonable best efforts to cause to be delivered to
the Company two letters from Acquiror's independent accountants, one dated a
date within two business days before the date on which the Form S-4 shall
become effective and one dated a date within two business days before the
Closing Date, each addressed to the Company, in form and substance reasonably
satisfactory to the Company and customary in scope and substance for comfort
letters delivered by independent public accountants in connection with
registration statements similar to the Form S-4.
 
  (b) Acquiror shall use reasonable best efforts to cause to be delivered to
the Company and the Company's independent accountants two letters from
Acquiror's independent accountants addressed to the Company and Acquiror, one
dated as of the date the Form S-4 is effective reporting that, as of the date
of the letter, Acquiror qualifies as a "combining company" under Opinion 16 of
the Accounting Principles Board and applicable SEC rules and regulations, and
one dated as of the Closing Date reporting that the Merger will qualify as a
"pooling of interests" transaction under Opinion 16 of the Accounting
Principles Board and applicable SEC rules and regulations.
 
  Section 5.4 Access to Information; Confidentiality. To the extent permitted
by applicable law and subject to the Agreement dated October 2, 1998, between
Acquiror and the Company (the "Confidentiality Agreement"), each of the Company
and Acquiror shall, and shall cause each of its respective subsidiaries to,
afford to the other party and to the officers, employees, accountants, counsel,
financial advisors and other representatives of such other party, reasonable
access during normal business hours during the period prior to the Effective
Time to all their respective properties, books, contracts, commitments,
personnel and records and, during such period, each of the Company and Acquiror
shall, and shall cause each of its respective subsidiaries to, furnish promptly
to the other party (a) a copy of each report, schedule, registration statement
and other document filed by it during such period pursuant to the requirements
of federal or state securities laws and (b) all other information concerning
its business, properties and personnel as such other party may reasonably
request. Any review pursuant to this Section 5.4 shall be for the purposes of
confirming the accuracy of any representation or warranty contained in this
Agreement given by Acquiror and Merger Sub to
 
                                      A-32
ANNEXES


 
the Company, or by the Company to Acquiror and Merger Sub and facilitating
transition planning. Each of the Company and Acquiror will hold, and will cause
its respective officers, employees, accountants, counsel, financial advisors
and other representatives and affiliates to hold, any nonpublic information in
accordance with the terms of the Confidentiality Agreement.
 
  Section 5.5 Reasonable Best Efforts; Cooperation.
 
  (a) Upon the terms and subject to the conditions set forth in this Agreement,
each of the parties agrees to use reasonable best efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated by this
Agreement, including (i) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities and the making of
all necessary registrations and filings and the taking of all steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity, (ii) the obtaining of all necessary
consents, approvals or waivers from third parties, (iii) the defending of any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions contemplated
hereby, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or reversed, and (iv)
the execution and delivery of any additional instruments necessary to
consummate the transactions contemplated by, and to fully carry out the
purposes of, this Agreement. Nothing set forth in this Section 5.5(a) will
limit or affect actions permitted to be taken pursuant to Sections 4.2 and 4.3.
 
  (b) In connection with and without limiting the foregoing, the Company and
Acquiror shall (i) take all action necessary to ensure that no state takeover
statute or similar statute or regulation is or becomes applicable to the
Merger, this Agreement or any of the other transactions contemplated hereby and
(ii) if any state takeover statute or similar statute or regulation becomes
applicable to the Merger, this Agreement or any of the other transactions
contemplated hereby, take all action necessary to ensure that the Merger and
the other transactions contemplated hereby may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger and the other
transactions contemplated by this Agreement.
 
  (c) Each of Acquiror and the Company shall cooperate with each other in
obtaining opinions of Schiff Hardin & Waite, counsel to Acquiror, and Jones,
Day, Reavis & Pogue, counsel to the Company, dated as of the Closing Date, to
the effect that the Merger will constitute a reorganization within the meaning
of Section 368(a) of the Code. In connection therewith, each of Acquiror and
the Company shall deliver to Schiff Hardin & Waite and Jones, Day, Reavis &
Pogue customary representation letters in form and substance reasonably
satisfactory to such counsel and the Company shall obtain any representation
letters from appropriate stockholders and shall deliver any such letters
obtained to Schiff Hardin & Waite and Jones, Day, Reavis & Pogue (the
representation letters referred to in this sentence are collectively referred
to as the "Tax Certificates").
 
  (d) Each of Acquiror and the Company shall consult and cooperate with the
other with respect to significant developments in its business and shall give
reasonable consideration to the other's views with respect thereto.
 
  (e) Each of Acquiror and the Company shall (i) make the filings required of
such party under the HSR Act with respect to the Merger and the other
transactions contemplated by this Agreement within ten days after the date of
this Agreement, (ii) comply at the earliest practicable date with any request
under the HSR Act for additional information, documents or other materials
received by such party from the Federal Trade Commission or the Department of
Justice or any other Governmental Entity in respect of such filings or the
Merger and the other transactions contemplated by this
 
                                      A-33
                                                                         ANNEXES


 
Agreement, and (iii) cooperate with the other party in connection with making
any filing under the HSR Act and in connection with any filings, conferences or
other submissions related to resolving any investigation or other inquiry by
any such Governmental Authority under the HSR Act with respect to the Merger
and the other transactions contemplated by this Agreement.
 
  Section 5.6 Stock Options, Restricted Stock and Employment Agreements.
 
  (a) As of the Effective Time, (i) each outstanding Company Employee Stock
Option shall be converted into an option (an "Adjusted Option") to purchase the
number of shares of Acquiror Common Stock equal to the number of shares of
Company Common Stock subject to such Company Employee Stock Option immediately
prior to the Effective Time multiplied by the Exchange Ratio (rounded to the
nearest whole number of shares of Acquiror Common Stock), at an exercise price
per share equal to the exercise price for each such share of Company Common
Stock subject to such option divided by the Exchange Ratio (rounded down to the
nearest whole cent), and all references in each such option to the Company
shall be deemed to refer to Acquiror, where appropriate, and (ii) Acquiror
shall assume the obligations of the Company under the Company Stock Plan. The
other terms of each Adjusted Option, and the plans or agreements under which
they were issued, shall continue to apply in accordance with their terms. The
date of grant of each Adjusted Option shall be the date on which the
corresponding Company Employee Stock Option was granted.
 
  (b) To the extent that there are any outstanding awards (including restricted
stock, deferred stock and performance shares) (each, a "Company Award") under
the Company Stock Plan at the Effective Time, then, as of the Effective Time,
(i) each such Company Award shall be converted into the same instrument of
Acquiror, in each case with such adjustments (and no other adjustments) to the
terms of such Company Awards as are necessary to preserve the value inherent in
such Company Awards with no detrimental effects on the holder thereof and (ii)
Acquiror shall assume the obligations of the Company under the Company Awards.
The other terms of each Company Award, and the plans or agreements under which
they were issued, shall continue to apply in accordance with their terms.
 
  (c) The Company and Acquiror agree that each of the Company Stock Plan and
Acquiror Stock Plans shall be amended, to the extent necessary, to reflect the
transactions contemplated by this Agreement, including, but not limited to the
conversion of shares of the Company Common Stock held or to be awarded or paid
pursuant to such benefit plans, programs or arrangements into shares of
Acquiror Common Stock on a basis consistent with the transactions contemplated
by this Agreement. The Company and Acquiror agree to submit the amendments to
the Acquiror Stock Plans or the Company Stock Plan to their respective
stockholders, if such submission is determined to be necessary by counsel to
the Company or Acquiror after consultation with one another; provided, however,
that such approval shall not be a condition to the consummation of the Merger.
 
  (d) Acquiror shall (i) reserve for issuance the number of shares of Acquiror
Common Stock that will become subject to the benefit plans, programs and
arrangements referred to in this Section 5.6 and (ii) issue or cause to be
issued the appropriate number of shares of Acquiror Common Stock pursuant to
applicable plans, programs and arrangements, upon the exercise or maturation of
rights existing thereunder on the Effective Time or thereafter granted or
awarded. No later than the Effective Time, Acquiror shall prepare and file with
the SEC a registration statement on Form S-8 (or other appropriate form)
registering a number of shares of Acquiror Common Stock necessary to fulfill
Acquiror's obligations under this Section 5.6. Such registration statement
shall be kept effective (and the current status of the prospectus required
thereby shall be maintained) for at least as long as Adjusted Options or the
Company Awards remain outstanding.
 
  (e) As soon as practicable after the Effective Time, Acquiror shall deliver
to the holders of the Company Employee Stock Options and Company Awards
appropriate notices setting forth such holders' rights pursuant to the Company
Stock Plan and the agreements evidencing the grants of such
 
                                      A-34
ANNEXES


 
Company Employee Stock Options and Company Awards and that such Company
Employee Stock Options and Company Awards and the related agreements shall be
assumed by Acquiror and shall continue in effect on the same terms and
conditions (subject to the adjustments required by this Section after giving
effect to the Merger).
 
  (f) Following the Effective Time, (i) Acquiror shall cause the Surviving
Corporation to honor in accordance with their terms all written employment,
severance and other compensation agreements of the Company and its subsidiaries
and (ii) Acquiror shall cause the Surviving Corporation to provide severance
benefits to employees of the Surviving Corporation in accordance with Section
5.6(f) of the Acquiror Disclosure Schedule.
 
  Section 5.7 Indemnification.
 
  (a) From and after the Effective Time, Acquiror shall, to the fullest extent
not prohibited by applicable law, indemnify, defend and hold harmless each
person who is now, or has been at any time prior to the date hereof, or who
becomes prior to the Effective Time, an officer, director or employee of the
Company or any of its subsidiaries (each, an "Indemnified Party" and
collectively, the "Indemnified Parties") against (i) all losses, expenses
(including reasonable attorneys' fees and expenses), claims, damages or
liabilities or, subject to the proviso of the next succeeding sentence, amounts
paid in settlement, arising out of actions or omissions occurring at or prior
to the Effective Time (and whether asserted or claimed prior to, at or after
the Effective Time) that are, in whole or in part, based on or arising out of
the fact that such person is or was a director, officer or employee of the
Company or any of its subsidiaries or served as a fiduciary under or with
respect to any employee benefit plan (within the meaning of Section 3(3) of
ERISA) at any time maintained by or contributed to by the Company or any of its
subsidiaries ("Indemnified Liabilities"), and (ii) all Indemnified Liabilities
to the extent they are based on or arise out of or pertain to the transactions
contemplated by this Agreement. In the event of any such loss, expense, claim,
damage or liability (whether or not arising before the Effective Time), (i)
Acquiror shall pay the reasonable fees and expenses of counsel selected by the
Indemnified Parties, which counsel shall be reasonably satisfactory to
Acquiror, promptly after statements therefor are received and otherwise advance
to such Indemnified Party upon request reimbursement of documented expenses
reasonably incurred, (ii) Acquiror and the Company will cooperate in the
defense of such matter and (iii) any determination required to be made with
respect to whether an Indemnified Party's conduct complies with the standards
set forth under applicable law and the articles of incorporation or code of
regulations shall be made by independent counsel mutually acceptable to
Acquiror and the Indemnified Party; provided, however, that Acquiror shall not
be liable for any settlement effected without its written consent (which
consent shall not be unreasonably withheld or delayed). In the event that any
Indemnified Party is required to bring any action to enforce rights or to
collect moneys due under this Agreement and is successful in such action,
Acquiror shall reimburse such Indemnified Party for all of its expenses in
bringing and pursuing such action. Each Indemnified Party shall be entitled to
the advancement of expenses to the full extent contemplated in this Section
5.7(a) in connection with any such action. In addition, from and after the
Effective Time, directors and officers of the Company who become directors or
officers of Acquiror will be entitled to indemnification under Acquiror's
Restated Certificate of Incorporation and Bylaws, as the same may be amended
from time to time in accordance with their terms and applicable law, and to all
other indemnity rights and protections as are afforded to other directors and
officers of Acquiror.
 
  (b) In the event that Acquiror or any of its successors or assigns (i)
consolidates with or merges into any other person and is not the continuing or
surviving corporation or entity of such consolidation or merger or (ii)
transfers or conveys all or substantially all of its properties and assets to
any person, then, and in each such case, proper provision will be made so that
the successors and assigns of Acquiror assume the obligations set forth in this
Section 5.7.
 
  (c) For six years after the Effective Time, Acquiror shall maintain in effect
the Company's current directors' and officers' liability insurance covering
acts or omissions occurring prior to the
 
                                      A-35
                                                                         ANNEXES


 
Effective Time with respect to those persons who are currently covered by the
Company's directors' and officers' liability insurance policy on terms with
respect to such coverage and amount no less favorable than those of such policy
in effect on the date hereof, provided that Acquiror may substitute therefor
policies of Acquiror or its subsidiaries containing terms with respect to
coverage and amount no less favorable to such directors or officers; provided,
further, that in no event shall Acquiror be required to pay aggregate premiums
for insurance under this Section 5.7(c) in excess of 200% of the aggregate
premiums paid by the Company in 1998 for such purpose; provided, further, that
if the annual premiums of such insurance coverage exceed such amount, Acquiror
shall be obligated to obtain a policy with the best coverage available, in the
reasonable judgment of the Board of Directors of Acquiror, for a cost up to but
not exceeding such amount. In addition, for six years after the Effective Time,
Acquiror shall maintain in effect the Company's current fiduciary liability
insurance policies for employees who serve or have served as fiduciaries under
or with respect to any employee benefit plans described in Section 5.7(a) with
coverages and in amounts no less favorable than those of such policy in effect
on the date hereof.
 
  (d) The provisions of this Section 5.7 (i) are intended to be for the benefit
of, and will be enforceable by, each indemnified party, his or her heirs and
his or her representatives and (ii) are in addition to, and not in substitution
for, any other rights to indemnification or contribution that any such person
may have by contract or otherwise.
 
  Section 5.8 Fees and Expenses.
 
  (a) Except as provided in this Section 5.8, all fees and expenses incurred in
connection with the Merger, this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such fees or expenses, whether or
not the Merger is consummated, except that each of Acquiror and the Company
shall bear and pay one-half of the costs and expenses incurred in connection
with the filing, printing and mailing of the Form S-4 and the Joint Proxy
Statement (including SEC filing fees).
 
  (b) In the event that (i) this Agreement is terminated by the Company
pursuant to Section 7.1(f), then the Company shall promptly, but in no event
later than two days after the date of termination pursuant to this clause (i),
pay Acquiror a fee equal to $140.0 million (the "Company Termination Fee"),
payable by wire transfer of same day funds, or (ii)(x) a Company Takeover
Proposal shall have been made known to the Company or any of its subsidiaries
or has been made directly to its stockholders generally or any person shall
have publicly announced an intention (whether or not conditional) to make a
Company Takeover Proposal which, in any such case, has not been publicly
withdrawn prior to the Company Stockholders Meeting, (y) thereafter, this
Agreement is terminated by either the Company or Acquiror pursuant to Section
7.1(b)(ii), and (z) within 18 months of such termination the Company or any of
its subsidiaries enters into any Company Acquisition Agreement or consummates
any Company Takeover Proposal (for the purposes of the foregoing proviso the
terms "Company Acquisition Agreement" and "Company Takeover Proposal" shall
have the meanings assigned to such terms in Section 4.2 except that the
references to "15%" in the definition of "Company Takeover Proposal" in Section
4.2(a) shall be deemed to be references to "35%" and "Company Takeover
Proposal" shall only be deemed to refer to a transaction involving the Company,
or with respect to assets (including the shares of any subsidiary), the Company
and its subsidiaries, taken as a whole, and not any of its subsidiaries alone),
then the Company shall pay Acquiror the Company Termination Fee, payable by
wire transfer of same day funds, no later than two days after the first to
occur of the execution of a Company Acquisition Agreement or the consummation
of a Company Takeover Proposal. The Company acknowledges that the agreements
contained in this Section 5.8(b) are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, Acquiror
would not enter into this Agreement.
 
  (c) In the event that (i) this Agreement is terminated by Acquiror pursuant
to Section 7.1(d), then Acquiror shall promptly, but in no event later than two
days after the date of such termination, pay
 
                                      A-36
ANNEXES


 
the Company a fee equal to $140.0 million (the "Acquiror Termination Fee"),
payable by wire transfer of same day funds, or (ii) (x) an Acquiror Takeover
Proposal shall have been made known to Acquiror or any of its subsidiaries or
has been made directly to its stockholders generally or any person shall have
publicly announced an intention (whether or not conditional) to make an
Acquiror Takeover Proposal which, in any such case, has not been publicly
withdrawn prior to the Acquiror Stockholders Meeting, (y) thereafter, this
Agreement is terminated by either the Company or Acquiror pursuant to Section
7.1(b)(iii), and (z) within 18 months of such termination Acquiror or any of
its subsidiaries enters into any Acquiror Acquisition Agreement or consummates
any Acquiror Takeover Proposal (for the purposes of the foregoing proviso the
terms "Acquiror Acquisition Agreement" and "Acquiror Takeover Proposal" shall
have the meanings assigned to such terms in Section 4.3 except that the
references to "15%" in the definition of "Acquiror Takeover Proposal" in
Section 4.3(a) shall be deemed to be references to "35%" and "Acquiror Takeover
Proposal" shall only be deemed to refer to a transaction involving Acquiror, or
with respect to assets (including the shares of any subsidiary), Acquiror and
its subsidiaries, taken as a whole, and not any of its subsidiaries alone),
then Acquiror shall pay the Company the Acquiror Termination Fee, payable by
wire transfer of same day funds, no later than two days after the first to
occur of the execution of an Acquiror Acquisition Agreement or the consummation
of an Acquiror Takeover Proposal. Acquiror acknowledges that the agreements
contained in this Section 5.8(c) are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, the Company
would not enter into this Agreement.
 
  Section 5.9 Public Announcements. Acquiror and the Company will consult with
each other before issuing, and provide each other the opportunity to review,
comment upon and concur with, any press release or other public statements with
respect to the transactions contemplated by this Agreement, including the
Merger, and shall not issue any such press release or make any such public
statement prior to such consultation, except as either party may determine is
required by applicable law, court process or by obligations pursuant to any
listing agreement with any national securities exchange. The parties agree that
the initial press release to be issued with respect to the transactions
contemplated by this Agreement shall be in the form heretofore agreed to by the
parties.
 
  Section 5.10 Affiliates.
 
  (a) Not less than 45 days prior to the Effective Time, the Company shall
deliver to Acquiror a list of names and addresses of each person who, in the
Company's reasonable judgment, is an affiliate within the meaning of Rule 145
of the rules and regulations promulgated under the Securities Act or otherwise
applicable SEC accounting releases with respect to pooling of interests
accounting treatment (each such person, a "Pooling Affiliate") of the Company.
The Company shall provide Acquiror such information and documents as Acquiror
shall reasonably request for purposes of reviewing such list. The Company shall
deliver or cause to be delivered to Acquiror, not later than 30 days prior to
the Effective Time, an affiliate letter in the form attached hereto as Exhibit
5.10(a), executed by each of the Pooling Affiliates of the Company identified
in the foregoing list. Acquiror shall be entitled to place legends as specified
in such affiliate letters on the certificates evidencing any of the Acquiror
Common Stock to be received by the Pooling Affiliates of the Company pursuant
to the terms of this Agreement, and to issue appropriate stop transfer
instructions to the transfer agent for the Acquiror Common Stock, consistent
with the terms of such letters.
 
  (b) Not less than 45 days prior to the Effective Time, Acquiror shall deliver
to the Company a list of names and addresses of each person who, in Acquiror's
reasonable judgment is a Pooling Affiliate of Acquiror. Acquiror shall provide
the Company such information and documents as the Company shall reasonably
request for purposes of reviewing such list. Acquiror shall deliver or cause to
be delivered to the Company, not later than 30 days prior to the Effective
Time, an affiliate letter in the form attached hereto as Exhibit 5.10(b),
executed by each Pooling Affiliate of Acquiror identified in the foregoing
list.
 
                                      A-37
                                                                         ANNEXES


 
  Section 5.11 NYSE Listing. Acquiror shall use its reasonable best efforts to
cause the Acquiror Common Stock issuable to the Company's stockholders as
contemplated by this Agreement to be approved for listing on the NYSE, subject
to official notice of issuance, as promptly as practicable after the date
hereof, and in any event prior to the Closing Date.
 
  Section 5.12 Stockholder Litigation. Each of the Company and Acquiror shall
give the other the reasonable opportunity to participate in the defense of any
stockholder litigation against the Company or Acquiror, as applicable, and its
directors relating to the transactions contemplated by this Agreement.
 
  Section 5.13 Tax Treatment. Each of Acquiror and the Company shall use
reasonable best efforts to cause the Merger to qualify as a reorganization
under the provisions of Section 368(a) of the Code and to obtain the opinions
of counsel referred to in Sections 6.2(c) and 6.3(c), including, without
limitation, forebearing from taking any action that would cause the Merger not
to qualify as a reorganization under the provisions of Section 368(a) of the
Code.
 
  Section 5.14 Pooling of Interests. Each of the Company and Acquiror shall use
their respective reasonable best efforts to cause the transactions contemplated
by this Agreement, including the Merger, to be accounted for as a pooling of
interests under Opinion 16 of the Accounting Principles Board and applicable
SEC rules and regulations, and such accounting treatment to be accepted by each
of the Company's and Acquiror's independent certified public accountants,
respectively, and to be accepted by the SEC, and each of the Company and
Acquiror agrees that, notwithstanding any action permitted by Section 4.1(a) or
4.1(b), it will not knowingly take any action that would cause such accounting
treatment not to be obtained.
 
  Section 5.15 Standstill Agreements; Confidentiality Agreements. During the
period from the date of this Agreement through the Effective Time, neither the
Company nor Acquiror shall terminate, amend, modify or waive any provision of
any confidentiality or standstill agreement to which it or any of its
respective subsidiaries is a party, other than (a) the Confidentiality
Agreement, pursuant to its terms or by written agreement of the parties
thereto, (b) confidentiality agreements under which the Company or Acquiror, as
the case may be, does not provide any confidential information to third parties
or (c) standstill agreements that do not relate to the equity securities of the
Company or any of its subsidiaries or Acquiror or any of its subsidiaries, as
the case may be. During such period, the Company or Acquiror, as the case may
be, shall enforce, to the fullest extent permitted under applicable law, the
provisions of any such agreement, including by obtaining injunctions to prevent
any breaches of such agreements and to enforce specifically the terms and
provisions thereof in any court of the United States of America or of any state
having jurisdiction.
 
  Section 5.16 Employee Benefit Plans.
 
  (a) For a period of at least three years after the Effective Time but subject
to the next sentence, Acquiror shall, or shall cause the Surviving Corporation
and each subsidiary of the Surviving Corporation to, provide employees of the
Company and each subsidiary of the Company with either benefits that are
substantially similar to those provided under the Company Benefit Plans as of
the date hereof or benefits that are substantially similar to those provided to
similarly situated employees of the Acquiror. For a period of at least one year
after the Effective Time, Acquiror shall, or shall cause the Surviving
Corporation and each subsidiary of the Surviving Corporation to, provide to
each continuing employee of the Company and each subsidiary of the Company: (i)
annual salary compensation in an amount not less than the annual salary
compensation such employee was entitled to receive from the Company or such
subsidiary of the Company immediately prior to the Effective Time based on such
employee's base salary then in effect, and (ii) payments under incentive bonus
and profit sharing plans with respect to the year ended December 31, 1999,
including, without limitation, the Company's ISP Plan (the "Incentive
Compensation"), based on the greater of: (A) the Incentive Compensation to
which such employee would have been entitled pursuant to the Company's
Incentive
 
                                      A-38
ANNEXES


 
Compensation plans in effect immediately prior to the Effective Time, or (B)
the Incentive Compensation to which such employee would be entitled pursuant to
any alternative Incentive Compensation plan as to which such employee may
become entitled to participate, at the option of the Acquiror, after the
Effective Time.
 
  (b) For purposes of (i) eligibility to participate, (ii) vesting and (iii)
eligibility for early retirement under Acquiror's defined benefit pension plans
(but not for benefit accrual or any other purposes), employees of the Company
and its subsidiaries as of the Effective Time shall receive credit under any
employee benefit plan, program or arrangement established or maintained by
Acquiror or the Surviving Corporation or any of its subsidiaries and made
available to such employees for service accrued prior to the Effective Time
with the Company or any of its subsidiaries.
 
  Section 5.17 Post-Merger Operations.
 
  (a) For a period of at least two years after the Effective Time, Acquiror and
its subsidiaries shall provide charitable contributions within the service
areas of the Company and its subsidiaries at levels substantially comparable to
the levels of charitable contributions provided by the Company and its
subsidiaries within the two-year period immediately prior to the Effective
Time.
 
  (b) Acquiror and the Company acknowledge that after the Effective Time and in
connection with the integration process Acquiror will undertake a study of all
of the plants and headquarters of Acquiror and its subsidiaries in an effort to
rationalize the operations of Acquiror and its subsidiaries. Any decision as
part of this process that would materially adversely affect the communities in
which the headquarters of each of the Company's Home, Juvenile, Infant and
Commercial operating divisions are located must be approved or ratified by the
Acquiror Board.
 
  Section 5.18 Acquiror Corporate Office. Promptly after the date hereof,
Acquiror and the Company will undertake a study to (i) determine a new location
for Acquiror's corporate offices for its senior executive officers and (ii)
develop a timetable pursuant to which the move of Acquiror's corporation
offices for its senior executive officers to such new location will be
effected. The Company and Acquiror acknowledge that such new location will not
be Wooster, Ohio, Freeport, Illinois or Beloit, Wisconsin.
 
  Section 5.19 Acquiror Board of Directors; Acquiror Officers.
 
  (a) Prior to the Effective Time, Acquiror's Board of Directors (the "Acquiror
Board") shall take such action as may be necessary to cause the number of
directors comprising the Acquiror Board at the Effective Time to be 15 persons,
consisting of (i) 9 persons designated by the Chairman of the Nominating
Committee of the Acquiror Board and (ii) 6 persons designated by the Chairman
of the Nominating Committee of the Company Board of Directors ("Company Board")
and reasonably acceptable to the Chairman of the Nominating Committee of
Acquiror. Acquiror shall take such action as may be necessary to cause such
persons to become directors of Acquiror. In furtherance thereof, Acquiror shall
use its reasonable best efforts to obtain the resignation of such directors of
Acquiror as is necessary to permit the Company's designees to be elected to the
Acquiror Board. The initial designation of the Company's director designees
among the three classes of the Acquiror Board shall be as designated by the
Chairman of the Nominating Committee of Acquiror and reasonably acceptable to
the Chairman of the Nominating Committee of the Company. If, prior to the
Effective Time, any Company director designee shall decline or be unable to
serve, the Company shall designate another person to serve in such person's
stead.
 
  (b) Effective as of the Effective Time, William P. Sovey shall be Chairman of
the Acquiror Board, John J. McDonough shall be Vice Chairman of the Acquiror
Board and Chief Executive Officer of Acquiror and Wolfgang R. Schmitt shall be
Vice Chairman--Integration and Strategy of the Acquiror Board, in each case,
until the earlier of their death, resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.
 
                                      A-39
                                                                         ANNEXES


 
                                   ARTICLE 6
 
                              Conditions Precedent
 
  Section 6.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
 
  (a) Stockholder Approvals. Each of the Company Stockholder Approval and the
Acquiror Stockholder Approval shall have been obtained.
 
  (b) Governmental and Regulatory Approvals. All consents, approvals and
actions of, filings with and notices to any Governmental Entity required of the
Company, Acquiror or any of their subsidiaries to consummate the Merger and the
other transactions contemplated hereby, the failure of which to be obtained or
taken is reasonably expected to have a material adverse effect on the Surviving
Corporation and its subsidiaries, taken as a whole, shall have been obtained in
form and substance reasonably satisfactory to each of Acquiror and the Company.
 
  (c) No Injunctions or Restraints. No judgment, order, decree, statute, law,
ordinance, rule or regulation, entered, enacted, promulgated, enforced or
issued by any court or other Governmental Entity of competent jurisdiction or
other legal restraint or prohibition (collectively, "Restraints") shall be in
effect (i) preventing the consummation of the Merger, (ii) prohibiting or
limiting the ownership or operation by the Company or Acquiror and their
respective subsidiaries of any material portion of the business or assets of
the Company or Acquiror and their respective subsidiaries taken as a whole, or
compelling the Company or Acquiror and their respective subsidiaries to dispose
of or hold separate any material portion of the business or assets of the
Company or Acquiror and their respective subsidiaries, taken as a whole, as a
result of the Merger or any of the other transactions contemplated by this
Agreement or (iii) which otherwise is reasonably likely to have a material
adverse effect on the Company or Acquiror, as applicable; provided, however,
that each of the parties shall have used its reasonable best efforts to prevent
the entry of any such Restraints and to appeal as promptly as possible any such
Restraints that may be entered.
 
  (d) Form S-4. The Form S-4 shall have become effective under the Securities
Act and shall not be the subject of any stop order or proceedings seeking a
stop order.
 
  (e) NYSE Listing. The shares of Acquiror Common Stock issuable to the
Company's stockholders as contemplated by this Agreement shall have been
approved for listing on the NYSE, subject to official notice of issuance.
 
  (f) Pooling. Each of Acquiror and the Company shall have received a letter of
its independent public accountants, dated as of the Closing Date, in form and
substance reasonably satisfactory, in each case, to Acquiror and the Company,
stating that the Merger will qualify as a "pooling of interests" transaction
under Opinion 16 of the Accounting Principles Board and applicable SEC rules
and regulations.
 
  (g) Dissenting Shares. Dissenting Shares shall not exceed 9% of the shares of
Company Common Stock outstanding on the Closing Date.
 
  (h) HSR Act. The waiting or similar period (including any extension thereof)
applicable to the consummation of the Merger under the HSR Act and any
applicable Foreign Antitrust Law shall have expired or been terminated.
 
  Section 6.2 Conditions to Obligations of Acquiror. The obligation of Acquiror
to effect the Merger is further subject to satisfaction or waiver of the
following conditions:
 
                                      A-40
ANNEXES


 
  (a) Representations and Warranties. The representations and warranties of the
Company set forth herein shall be true and correct both when made and at and as
of the Closing Date, as if made at and as of such time (except to the extent
expressly made as of an earlier date, in which case as of such date), except
where the failure of such representations and warranties to be so true and
correct (without giving effect to any limitation as to "materiality" or
"material adverse effect" set forth therein) would not have, individually or in
the aggregate, a material adverse effect on the Company.
 
  (b) Performance of Obligations of the Company. The Company shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date.
 
  (c) Tax Opinion. Acquiror shall have received from Schiff Hardin & Waite,
counsel to Acquiror, an opinion dated as of the Closing Date, to the effect
that the Merger will constitute a "reorganization" within the meaning of
Section 368(a) of the Code, and Acquiror and the Company will each be a party
to such reorganization within the meaning of Section 368(b) of the Code. In
rendering such opinion, counsel for Acquiror may require delivery of, and rely
upon, the Tax Certificates.
 
  (d) No Material Adverse Change. At any time after the date of this Agreement
there shall not have occurred any material adverse change relating to the
Company; provided that this condition shall no longer be applicable following
Acquiror Stockholder Approval.
 
  Section 6.3 Conditions to Obligations of the Company. The obligation of the
Company to effect the Merger is further subject to satisfaction or waiver of
the following conditions:
 
  (a) Representations and Warranties. The representations and warranties of
Acquiror set forth herein shall be true and correct both when made and at and
as of the Closing Date, as if made at and as of such time (except to the extent
expressly made as of an earlier date, in which case as of such date), except
where the failure of such representations and warranties to be so true and
correct (without giving effect to any limitation as to "materiality" or
"material adverse effect" set forth therein) would not have, individually or in
the aggregate, a material adverse effect on Acquiror.
 
  (b) Performance of Obligations of Acquiror. Acquiror shall have performed in
all material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date.
 
  (c) Tax Opinion. The Company shall have received from Jones, Day, Reavis &
Pogue, counsel to the Company, an opinion dated as of the Closing Date, to the
effect that the Merger will constitute a "reorganization" within the meaning of
Section 368(a) of the Code, and Acquiror and the Company will each be a party
to such reorganization within the meaning of Section 368(b) of the Code. In
rendering such opinion, counsel for the Company may require delivery of, and
rely upon, the Tax Certificates.
 
  (d) No Material Adverse Change. At any time after the date of this Agreement
there shall not have occurred any material adverse change relating to Acquiror;
provided that this condition shall no longer be applicable following the
Company Stockholder Approval.
 
  Section 6.4 Frustration of Closing Conditions. Neither Acquiror nor the
Company may rely on the failure of any condition set forth in Section 6.1, 6.2
or 6.3, as the case may be, to be satisfied if such failure was caused by such
party's failure to use reasonable best efforts to consummate the Merger and the
other transactions contemplated by this Agreement, as required by and subject
to Section 5.5.
 
                                      A-41
                                                                         ANNEXES


 
                                   ARTICLE 7
 
                       Termination, Amendment and Waiver
 
  Section 7.1 Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether before or after the Company Stockholder Approval
or the Acquiror Stockholder Approval:
 
  (a) by mutual written consent of Acquiror and the Company;
 
  (b) by either Acquiror or the Company:
 
    (i) if the Merger shall not have been consummated by June 30, 1999;
  provided, however, that the right to terminate this Agreement pursuant to
  this Section 7.1(b)(i) shall not be available to any party whose failure to
  perform any of its obligations under this Agreement results in the failure
  of the Merger to be consummated by such time;
 
    (ii) if the Company Stockholder Approval shall not have been obtained at a
  Company Stockholders Meeting duly convened therefor or at any adjournment or
  postponement thereof,
 
    (iii) if the Acquiror Stockholder Approval shall not have been obtained at
  an Acquiror Stockholders Meeting duly convened therefor or at any
  adjournment or postponement thereof, or
 
    (iv) if any Restraint having any of the effects set forth in Section
  6.1(c) shall be in effect and shall have become final and nonappealable;
  provided, that the party seeking to terminate this Agreement pursuant to
  this Section 7.1(b)(iv) shall have used reasonable best efforts to prevent
  the entry of and to remove such Restraint;
 
  (c) by Acquiror, if the Company shall have breached or failed to perform in
any material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform
would give rise to a material adverse change relating to the Company and (A) is
not cured within 30 days after written notice thereof or (B) is incapable of
being cured by the Company;
 
  (d) by Acquiror in accordance with Section 4.3(b); provided that, in order
for the termination of this Agreement pursuant to this paragraph (d) to be
deemed effective, Acquiror shall have complied with all provisions contained in
Section 4.3, including the notice provisions therein, and the applicable
requirements, including the payment of the Acquiror Termination Fee, of Section
5.8;
 
  (e) by the Company, if Acquiror shall have breached or failed to perform in
any material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform
would give rise to a material adverse change relating to Acquiror and (A) is
not cured within 30 days after written notice thereof or (B) is incapable of
being cured by Acquiror; or
 
  (f) by the Company in accordance with Section 4.2(b); provided that, in order
for the termination of this Agreement pursuant to this Section 7.1(f) to be
deemed effective, the Company shall have complied with all provisions of
Section 4.2, including the notice provisions therein, and the applicable
requirements, including the payment of the Company Termination Fee, of Section
5.8.
 
  Section 7.2 Effect of Termination. In the event of termination of this
Agreement by either the Company or Acquiror as provided in Section 7.1, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Acquiror or the Company, other than the provisions
of Section 3.1(o), Section 3.2(p), the last sentence of Section 5.4, Section
5.8, this Section 7.2 and Article 8, which provisions survive such termination,
provided, however, that nothing herein shall relieve any party from any
liability for any willful and material breach by such party of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
 
                                      A-42
ANNEXES


 
  Section 7.3 Amendment. This Agreement may be amended by the parties at any
time before or after the Company Stockholder Approval or the Acquiror
Stockholder Approval; provided, however, that after any such approval, there
shall not be made any amendment that by law requires further approval by the
stockholders of the Company or Acquiror without the further approval of such
stockholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties.
 
  Section 7.4 Extension; Waiver. At any time prior to the Effective Time, a
party may (a) extend the time for the performance of any of the obligations or
other acts of the other party, (b) waive any inaccuracies in the
representations and warranties of the other party contained in this Agreement
or in any document delivered pursuant to this Agreement or (c) subject to the
proviso of Section 7.3, waive compliance by the other party with any of the
agreements or conditions contained in this Agreement. Any agreement on the part
of a party to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party. The failure of any
party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of such rights.
 
  Section 7.5 Procedure for Termination, Amendment, Extension or Waiver. A
termination of this Agreement pursuant to Section 7.1 shall, in order to be
effective, require, in the case of Acquiror or the Company, action by its Board
of Directors or, with respect to any amendment to this Agreement, the duly
authorized committee of its Board of Directors to the extent permitted by law.
 
                                   ARTICLE 8
 
                               General Provisions
 
  Section 8.1 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time. This Section 8.1
shall not limit any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time.
 
  Section 8.2 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally, telecopied (which is confirmed) or sent by
overnight courier (providing proof of delivery) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
 
  (a)if to the Company, to: Rubbermaid Incorporated
                            1147 Akron Road
                            Wooster, Ohio 44691
                            Telecopy No.: (330) 287-2982
                            Attention: Chief Executive
                            Officer
 
    with a copy to:         Jones, Day, Reavis & Pogue
                            North Point
                            901 Lakeside Avenue
                            Cleveland, Ohio 44114
                            Telecopy No.: (216) 579-0212
                            Attention: Lyle G. Ganske, Esq.
 
                                      A-43
                                                                         ANNEXES


 
  (b) if to Acquiror or Merger
      Sub, to
                            Newell Co.
                            4000 Auburn Street
                            Rockford, Illinois 61101
                            Telecopy No.: (815) 969-6106
                            Attention: General Counsel
 
    with a copy to:         Schiff Hardin & Waite
                            6600 Sears Tower
                            Chicago, Illinois 60606
                            Telecopy No.: (312) 258-5600
                            Attention: Frederick L.
                            Hartmann, Esq.
 
  Section 8.3 Definitions. For purposes of this Agreement:
 
  (a) an "affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person, where "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a person, whether through the ownership
of voting securities, by contract or otherwise;
 
  (b) "knowledge" of any person which is not an individual means the knowledge
of such person's executive officers;
 
  (c) "material adverse change" or "material adverse effect" means, when used
in connection with the Company, Acquiror or Merger Sub, any change, effect,
event, occurrence or state of facts that is, or would reasonably be expected to
be, materially adverse to the business, financial condition or results of
operations of such party and its subsidiaries taken as a whole, other than any
change, effect, event or occurrence (i) relating to the economy or securities
markets of the United States or any other region in general, (ii) resulting
from entering into this Agreement or the consummation of the transactions
contemplated hereby or the announcement thereof, or (iii) relating to its
business, financial condition or results of operations that has been disclosed
in writing to the other party prior to the date of this Agreement, and the
terms "material" and "materially" have correlative meanings;
 
  (d) "person" means an individual, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization or
other entity; and
 
  (e) a "subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person.
 
  Section 8.4 Interpretation. When a reference is made in this Agreement to an
Article, Section or Exhibit, such reference shall be to an Article or Section
of, or an Exhibit to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation". The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. All terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein.
The definitions contained in this Agreement are applicable to the singular as
well as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any agreement, instrument or statute
defined or
 
                                      A-44
ANNEXES


 
referred to herein or in any agreement or instrument that is referred to herein
means such agreement, instrument or statute as from time to time amended,
modified or supplemented, including (in the case of agreements or instruments)
by waiver or consent and (in the case of statutes) by succession of comparable
successor statutes and references to all attachments thereto and instruments
incorporated therein. References to a person are also to its permitted
successors and assigns.
 
  Section 8.5 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other parties.
 
  Section 8.6 Entire Agreement: No Third-Party Beneficiaries. This Agreement
(including the documents and instruments referred to herein), and the
Confidentiality Agreement (a) constitute the entire agreement, and supersede
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter of this Agreement and (b) except for
the provisions of Article 2, Section 5.6 and Section 5.7, are not intended to
confer upon any person other than the parties any rights or remedies.
 
  Section 8.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF OHIO, REGARDLESS OF THE LAWS THAT
MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
 
  Section 8.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by either of the parties hereto without
the prior written consent of the other party. Any assignment in violation of
the preceding sentence shall be void. Subject to the preceding two sentences,
this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.
 
  Section 8.9 Consent to Jurisdiction. Each of the parties hereto (a) consents
to submit itself to the personal jurisdiction of any federal court located in
the State of New York or any New York state court, in either case located in
the Southern District of New York, in the event any dispute arises out of this
Agreement or any of the transactions contemplated by this Agreement, (b) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court, and (c) agrees that it will not
bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a federal court sitting
in the State of New York or a New York state court, in either case located in
the Southern District of New York.
 
  Section 8.10 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
 
  Section 8.11 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
 
                                      A-45
                                                                         ANNEXES


 
  IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan of
Merger to be signed by their respective officers thereunto duly authorized, all
as of the date first written above.
 
                                   Rubbermaid Incorporated
 
                                                 /s/ James A. Morgan
                                   By: ________________________________________
                                      Name: James A. Morgan
                                      Title: Senior Vice President, General
                                       Counsel and Secretary
 
 
                                   Newell Co.
 
                                              /s/ William T. Alldredge
                                   By: ________________________________________
                                      Name: William T. Alldredge
                                      Title: Vice President
 
 
                                   Rooster Company
 
                                               /s/ Dale L. Matschullat
                                   By: ________________________________________
                                      Name: Dale L. Matschullat
                                      Title: Vice President--General Counsel
 
                                      A-46
ANNEXES


 
                                                                         ANNEX B
 
                        FORM OF CERTIFICATE OF AMENDMENT

 
                                       OF
 
                     RESTATED CERTIFICATE OF INCORPORATION
 
                                       OF
 
                                   NEWELL CO.
 
            Adopted in accordance with the provisions of Section 242
            of the General Corporation Law of the State of Delaware
 
  I, Dale L. Matschullat, Vice President--General Counsel of Newell Co., a
corporation existing under the laws of the State of Delaware, do hereby certify
as follows:
 
  FIRST: That the name of the corporation is Newell Co.
 
  SECOND: That Article First of the Restated Certificate of Incorporation of
the corporation, as heretofore amended, has been amended in its entirety to
read as follows:
 
          FIRST: The name of the corporation is Newell Rubbermaid Inc.
 
  THIRD: That the foregoing amendment has been duly adopted in accordance with
provisions of the General Corporation Law of the State of Delaware by the
majority vote of all the outstanding shares entitled to vote at a meeting of
stockholders.
 
  IN WITNESS WHEREOF, I have signed this certificate this    day of        ,
1999.
 
                                   Newell Co.
 
                                   By: ________________________________________
                                      Dale L. Matschullat
                                      Vice President--General Counsel
 
Attest:
 
new80pa
- --------------------------
Richard H. Wolff
Corporate Secretary
 
                                      B-1
 

                                                                         ANNEXES






                                                                         ANNEX C


 
                                                                                        

                                                                                                                BAIRD/A NORTHWESTERN
                                                                                                                      MUTUAL COMPANY
- ------------------------------------------------------------------------------------------------------------------------------------
ROBERT W. BAIRD & CO. INCORPORATED     777 EAST WISCONSIN AVENUE    MILWAUKEE, WI 53202-5391    414-765-3758

 





 
                                                                October 20, 1998
 
Board of Directors
Newell Co.
One Millington Road
Beloit, Wisconsin 53511
 
Ladies and Gentlemen:
 
  Newell Co. (the "Company") proposes to enter into an Agreement and Plan of
Merger (the "Agreement") with Rubbermaid Incorporated ("Seller") and Rooster
Company, a wholly owned subsidiary of the Company ("Merger Sub"). Pursuant to
the Agreement, at the Effective Time (as defined in the Agreement), Merger Sub
shall be merged with and into Seller (the "Merger") and each issued and
outstanding share of common stock, par value $1.00 per share ("Seller Common
Stock"), of Seller (other than Dissenting Shares (as defined in the Agreement)
and shares owned by the Company or Merger Sub, any direct or indirect
subsidiary of the Company, Seller or Merger Sub, or held in the treasury of
Seller) will be converted solely into the right to receive 0.7883 of one share
of common stock, par value $1.00 per share ("Company Common Stock"), of the
Company (the "Exchange Ratio").
 
  You have requested our opinion as to the fairness, from a financial point of
view, of the Exchange Ratio to the Company.
 
  Robert W. Baird & Co. Incorporated ("Baird"), as part of its investment
banking business, is engaged in the evaluation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements, and valuations for estate, corporate
and other purposes.
 
  In conducting our investigation and analysis and in arriving at our opinion
herein, we have reviewed such information and taken into account such financial
and economic factors as we have deemed relevant under the circumstances. In
that connection, we have, among other things: (i) reviewed certain internal
information, primarily financial in nature, including projections, concerning
the business and operations of the Company and Seller furnished to us for
purposes of our analysis, as well as publicly available information including
but not limited to the Company's and Seller's recent filings with the
Securities and Exchange Commission and equity analyst research reports prepared
by various investment banking firms including Baird; (ii) reviewed the
Agreement in the form presented to the Company's Board of Directors; (iii)
compared the historical market prices and trading activity of the Company
Common Stock and Seller Common Stock with those of certain other publicly
traded companies we deemed relevant; (iv) compared the financial position and
operating results of the Company and Seller with those of certain other
publicly traded companies we deemed relevant; (v) compared the proposed
financial terms of the Merger with the financial terms of certain other
business combinations we deemed relevant and (vi) reviewed certain potential
pro forma effects of the Merger on the Company. We have held discussions with
members of the Company's and Seller's respective senior managements concerning
the Company's and Seller's historical and current financial condition and
operating results, as well as the future prospects of the Company and Seller on
a standalone and combined basis. We have also considered such other
information, financial studies, analysis and investigations and financial,
economic and market criteria which we deemed relevant for the preparation of
this opinion.
 
                                      C-1
 
 
                                                                                                                          
                     MEMBER NEW YORK STOCK EXCHANGE, INC. AND OTHER PRINCIPAL EXCHANGES. MEMBER SIPC.                        ANNEXES

 


 
 
  In arriving at our opinion, we have assumed and relied upon the accuracy and
completeness of all of the financial and other information that was publicly
available or provided us by or on behalf of the Company and Seller, and have
not been engaged to independently verify any such information. We have assumed,
with your consent, that (i) all material assets and liabilities (contingent or
otherwise, known or unknown) of the Company and Seller are as set forth in
their respective financial statements, (ii) the Merger will be accounted for
under the pooling-of-interests method, (iii) the cost savings and operating
synergies resulting from the Merger will be realized as contemplated by the
Company's management and (iv) the Merger will be consummated in accordance with
the terms of the Agreement in the form presented to the Company's Board of
Directors, without any amendment thereto and without waiver by the Company or
Seller of any of the conditions to their respective obligations thereunder. We
have also assumed that the projections and other financial forecasts (including
estimates of cost savings and operating synergies resulting from the Merger
developed by the Company's management) examined by us were reasonably prepared
on bases reflecting the best available estimates and good faith judgments of
the Company's and Seller's senior managements as to future performance of the
Company and Seller. In conducting our review, we have not undertaken nor
obtained an independent evaluation or appraisal of any of the assets or
liabilities (contingent or otherwise) of the Company or Seller nor have we made
a physical inspection of the properties or facilities of the Company or Seller.
Our opinion necessarily is based upon economic, monetary and market conditions
as they exist and can be evaluated on the date hereof, and does not predict or
take into account any changes which may occur, or information which may become
available, after the date hereof. Furthermore, we express no opinion as to the
price or trading range at which the Seller's or the Company's securities
(including, but not limited to, the Company Common Stock and the Seller Common
Stock) will trade following the date hereof.
 
  Our opinion has been prepared at the request and for the information of the
Board of Directors of the Company, and shall not be used for any other purpose
or disclosed to any other party without the prior written consent of Baird;
provided, however, that this letter may be reproduced in full in the Joint
Proxy Statement-Prospectus to be provided to the Company's stockholders in
connection with the Merger. This opinion does not address the relative merits
of the Merger and any other potential transactions or business strategies
considered by the Company's Board of Directors, and does not constitute a
recommendation to any shareholder of the Company as to how any such shareholder
should vote with respect to the Merger. Baird has acted as financial advisor to
the Company in connection with the Merger, and will receive a fee for rendering
this opinion and an additional fee upon consummation of the Merger. In the
past, we have provided financial advisory services to the Company in connection
with various acquisitions and divestitures, and served as a co-manager of the
Company's Convertible Quarterly Income Preferred Securities, for which we
received our customary compensation.
 
  In the ordinary course of our business, we may from time to time trade the
securities of the Company and Seller for our own account or the accounts of our
customers and, accordingly, may at any time hold long or short positions in
such securities.
 
  Based upon and subject to the foregoing, we are of the opinion that, as of
the date hereof, the Exchange Ratio is fair, from a financial point of view, to
the Company.
 
                                   Very truly yours,
 
                                   Robert W. Baird & Co. Incorporated
 
                                      C-2
 
ANNEXES


 
                                                                         ANNEX D
 
- --------------------------------------------------------------------------------
   
Goldman, Sachs & Co.  85 Broad Street  New York, New York 10004     
   
Tel: 212-902-1000     
 
[LOGO OF GOLDMAN SACHS]
 
- --------------------------------------------------------------------------------
 
                                                                October 20, 1998
 
PERSONAL AND CONFIDENTIAL
Board of Directors
Rubbermaid Incorporated
1147 Akron Road
Wooster, OH 44691-6000
 
Ladies and Gentlemen:
 
  You have requested our opinion as to the fairness from a financial point of
view to the holders of the outstanding shares of Common Stock, par value $1.00
per share (the "Company Common Stock"), of Rubbermaid Incorporated (the
"Company") of the exchange ratio of 0.7883 shares of Common Stock, par value
$1.00 per share (the "Newell Common Stock"), of Newell Co. ("Newell") to be
received for each share of Company Common Stock (the "Exchange Ratio") pursuant
to the Agreement and Plan of Merger, dated as of October 20, 1998, by and
between Newell, Rooster Company, a wholly-owned subsidiary of Newell, and the
Company (the "Agreement").
 
  Goldman, Sachs & Co. ("Goldman Sachs"), as part of its investment banking
business, is continually engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for estate, corporate
and other purposes. We are familiar with the Company having provided certain
investment banking services to the Company from time to time, including having
acted as its financial advisor in connection with the sale of its office
products business in June 1997 and the acquisition of Curver Consumer Products
in November 1997. We have also acted as financial advisor to the Company in
connection with, and have participated in certain of the negotiations leading
to, the Agreement. In addition, we have provided certain investment banking
services to Newell from time to time, including having acted as lead-managing
underwriter in the public offering of $500 million of 5.25% Convertible
Quarterly Income Preferred Securities in December 1997. Goldman Sachs may
provide investment banking services to Newell and its subsidiaries in the
future.
 
  In connection with this opinion, we have reviewed, among other things, the
Agreement; Annual Reports to Stockholders and Annual Reports on Form 10-K of
the Company and Newell for the five years ended December 31, 1997; certain
interim reports to stockholders and Quarterly Reports on Form 10-Q of the
Company and Newell; certain other communications from the Company and Newell to
their respective stockholders; certain internal financial analyses and
forecasts for the Company and Newell prepared by the management of the Company,
including certain projected cost savings and operating synergies expected to
result from the transaction contemplated by the Agreement (the "Synergies");
and certain internal financial analyses and forecasts for Newell prepared by
the
 
                                      D-1
 
New York | London | Tokyo | Boston | Chicago | Dallas |
Frankfurt | George Town | Hong Kong | Houston | Los
Angeles | Memphis
Miami | Milan | Montreal | Osaka | Paris | Philadelphia |                ANNEXES
San Francisco | Singapore | Sydney | Toronto | Vancouver |
Zurich


 
management of Newell. We also have held discussions with members of the senior
managements of the Company and Newell regarding the strategic rationale for,
and the potential benefits of, the transaction contemplated by the Agreement
and the past and current business operations, financial condition and future
prospects of the Company and Newell, respectively. In addition, we have
reviewed the reported price and trading activity for the Company Common Stock
and the Newell Common Stock, compared certain financial and stock market
information for the Company and Newell with similar information for certain
other companies the securities of which are publicly traded, reviewed the
financial terms of certain recent business combinations in the consumer
products industry specifically and in other industries generally and performed
such other studies and analyses as we considered appropriate.
 
  We have relied upon the accuracy and completeness of all of the financial and
other information reviewed by us and have assumed such accuracy and
completeness for purposes of rendering this opinion. In that regard, we have
assumed with your consent that the internal financial forecasts prepared by the
managements of the Company and Newell, and the Synergies, have been reasonably
prepared on a basis reflecting the best currently available estimates and
judgments of the Company and Newell, as the case may be. In addition, we have
not made an independent evaluation or appraisal of the assets and liabilities
of the Company or Newell or any of their subsidiaries and we have not been
furnished with any such evaluation or appraisal. We have assumed with your
consent that the transaction contemplated by the Agreement will be accounted
for as a pooling-of-interests under generally accepted accounting principles.
Our advisory services and the opinion expressed herein are provided for the
information and assistance of the Board of Directors of the Company in
connection with its consideration of the transaction contemplated by the
Agreement and such opinion does not constitute a recommendation as to how
holders of Company Common Stock should vote with respect to such transaction.
 
  Based upon and subject to the foregoing and based upon such other matters as
we consider relevant, it is our opinion that as of the date hereof the Exchange
Ratio pursuant to the Agreement is fair from a financial point of view to
holders of Company Common Stock.
 
 
                                      D-2
 
ANNEXES


 
                                                                         ANNEX E
 
                               OHIO REVISED CODE
                     TITLE XVII CORPORATIONS--PARTNERSHIPS
                     CHAPTER 1701: GENERAL CORPORATION LAW
 
SECTION 1701.85 QUALIFICATIONS OF AND PROCEDURES FOR DISSENTING SHAREHOLDERS
 
  (A)(1) A shareholder of a domestic corporation is entitled to relief as a
dissenting shareholder in respect of the proposals described in sections
1701.74, 1701.76, and 1701.84 of the Revised Code, only in compliance with this
section.
 
  (2) If the proposal must be submitted to the shareholders of the corporation
involved, the dissenting shareholder shall be a record holder of the shares of
the corporation as to which he seeks relief as of the date fixed for the
determination of shareholders entitled to notice of a meeting of the
shareholders at which the proposal is to be submitted, and such shares shall
not have been voted in favor of the proposal. Not later than ten days after the
date on which the vote on the proposal was taken at the meeting of the
shareholders, the dissenting shareholder shall deliver to the corporation a
written demand for payment to him of the fair cash value of the shares as to
which he seeks relief, which demand shall state his address, the number and
class of such shares, and the amount claimed by him as the fair cash value of
the shares.
 
  (3) The dissenting shareholder entitled to relief under division (C) of
section 1701.84 of the Revised Code in the case of a merger pursuant to section
1701.80 of the Revised Code and a dissenting shareholder entitled to relief
under division (E) of section 1701.84 of the Revised Code in the case of a
merger pursuant to section 1701.801 of the Revised Code shall be a record
holder of the shares of the corporation as to which he seeks relief as of the
date on which the agreement of merger was adopted by the directors of that
corporation. Within twenty days after he has been sent the notice provided in
section 1701.80 or 1701.801 of the Revised Code, the dissenting shareholder
shall deliver to the corporation a written demand for payment with the same
information as that provided for in division (A)(2) of this section.
 
  (4) In the case of a merger or consolidation, a demand served on the
constituent corporation involved constitutes service on the surviving or the
new entity, whether the demand is served before, on, or after the effective
date of the merger or consolidation.
 
  (5) If the corporation sends to the dissenting shareholder, at the address
specified in his demand, a request for the certificates representing the shares
as to which he seeks relief, the dissenting shareholder, within fifteen days
from the date of the sending of such request, shall deliver to the corporation
the certificates requested so that the corporation may forthwith endorse on
them a legend to the effect that demand for the fair cash value of such shares
has been made. The corporation promptly shall return such endorsed certificates
to the dissenting shareholder. A dissenting shareholder's failure to deliver
such certificates terminates his rights as a dissenting shareholder, at the
option of the corporation, exercised by written notice sent to the dissenting
shareholder within twenty days after the lapse of the fifteen-day period,
unless a court for good cause shown otherwise directs. If shares represented by
a certificate on which such a legend has been endorsed are transferred, each
new certificate issued for them shall bear a similar legend, together with the
name of the original dissenting holder of such shares. Upon receiving a demand
for payment from a dissenting shareholder who is the record holder of
uncertificated securities, the corporation shall make an appropriate notation
of the demand for payment in its shareholder records. If uncertificated shares
for which payment has been demanded are to be transferred, any new certificate
issued for the shares
 
                                      E-1
 
                                                                         ANNEXES


 
shall bear the legend required for certificated securities as provided in this
paragraph. A transferee of the shares so endorsed, or of uncertificated
securities where such notation has been made, acquires only such rights in the
corporation as the original dissenting holder of such shares had immediately
after the service of a demand for payment of the fair cash value of the shares.
A request under this paragraph by the corporation is not an admission by the
corporation that the shareholder is entitled to relief under this section.
 
  (B) Unless the corporation and the dissenting shareholder have come to an
agreement on the fair cash value per share of the shares as to which the
dissenting shareholder seeks relief, the dissenting shareholder or the
corporation, which in the case of a merger or consolidation may be the
surviving or new entity, within three months after the service of the demand by
the dissenting shareholder, may file a complaint in the court of common pleas
of the county in which the principal office of the corporation that issued the
shares is located or was located when the proposal was adopted by the
shareholders of the corporation, or, if the proposal was not required to be
submitted to the shareholders, was approved by the directors. Other dissenting
shareholders, within that three-month period, may join as plaintiffs or may be
joined as defendants in any such proceeding, and any two or more such
proceedings may be consolidated. The complaint shall contain a brief statement
of the facts including the vote and the facts entitling the dissenting
shareholder to the relief demanded. No answer to such a complaint is required.
Upon the filing of such a complaint, the court, on motion of the petitioner,
shall enter an order fixing a date for a hearing on the complaint and requiring
that a copy of the complaint and a notice of the filing and of the date for
hearing be given to the respondent or defendant in the manner in which summons
is required to be served or substituted service is required to be made in other
cases. On the day fixed for the hearing on the complaint or any adjournment of
it, the court shall determine from the complaint and from such evidence as is
submitted by either party whether the dissenting shareholder is entitled to be
paid the fair cash value of any shares and, if so, the number and class of such
shares. If the court finds that the dissenting shareholder is so entitled, the
court may appoint one or more persons as appraisers to receive evidence and to
recommend a decision on the amount of the fair cash value. The appraisers have
such power and authority as is specified in the order of their appointment. The
court thereupon shall make a finding as to the fair cash value of a share and
shall render judgment against the corporation for the payment of it, with
interest at such rate and from such date as the court considers equitable. The
costs of the proceeding, including reasonable compensation to the appraisers to
be fixed by the court, shall be assessed or appointed as the court considers
equitable. The proceeding is a special proceeding and final orders in it may be
vacated, modified, or reversed on appeal pursuant to the rules of Appellate
Procedure and, to the extent not in conflict with those rules, Chapter 2505. of
the Revised Code. If, during the pendency of any proceeding instituted under
this section, a suit or proceeding is or has been instituted to enjoin or
otherwise to prevent the carrying out of the action as to which the shareholder
has dissented, the proceeding instituted under this section shall be stayed
until the final determination of the other suit or proceeding. Unless any
provision in division (D) of this section is applicable, the fair cash value of
the shares that is agreed upon by the parties or fixed under this section shall
be paid within thirty days after the date of final determination of such value
under this division, the effective date of the amendment to the articles, or
the consummation of the other action involved, whichever occurs last. Upon the
occurrence of the last such event, payment shall be made immediately to a
holder of uncertificated securities entitled to such payment. In the case of
holders of shares represented by certificates, payment shall be made only upon
and simultaneously with the surrender to the corporation of the certificates
representing the shares for which the payment is made.
 
  (C) If the proposal was required to be submitted to the shareholders of the
corporation, a fair cash value as to those shareholders shall be determined as
of the date prior to the day on which the vote by the shareholders was taken
and, in the case of a merger pursuant to section 1701.80 or 1701.801 of the
Revised Code, fair cash value as to shareholders of a constituent subsidiary
corporation shall be determined as of the day before the adoption of the
agreement of merger by the directors of the
 
                                      E-2
 
ANNEXES


 
particular subsidiary corporation. The fair cash value of a share for the
purposes of this section is the amount that a willing seller who is under no
compulsion to sell would be willing to accept and that a willing buyer who is
under no compulsion to purchase would be willing to pay, but in no event shall
the fair cash value of a share exceed the amount specified in the demand of the
particular shareholder. In computing such fair cash value, any appreciation or
depreciation in market value resulting from the proposal submitted to the
directors or to the shareholders shall be excluded.
 
  (D)(1) The right and obligation of a dissenting shareholder to receive such
fair cash value and to sell such shares as to which he seeks relief, and the
right and obligation of the corporation to purchase such shares and to pay the
fair cash value of them terminates if any of the following applies:
 
    (a) The dissenting shareholder has not complied with this section, unless
  the corporation by its directors waives such failure;
 
    (b) The corporation abandons the action involved or is finally enjoined or
  prevented from carrying it out, or the shareholders rescind their adoption
  of the action involved;
 
    (c) The dissenting shareholder withdraws his demand, with the consent of
  the corporation by its directors;
 
    (d) The corporation and the dissenting shareholder have not come to an
  agreement as to the fair cash value per share, and neither the shareholder
  nor the corporation has filed or jointed in a complaint under division (B)
  of this section within the period provided in that division.
 
  (2) For purposes of division (D)(1) of this section, if the merger or
consolidation has become effective and the surviving or new entity is not a
corporation, action required to be taken by the directors of the corporation
shall be taken by the general partners of a surviving or new partnership or the
comparable representatives of any other surviving or new entity.
 
  (E) From the time of the dissenting shareholder's giving of the demand until
either the termination of the rights and obligations arising from it or the
purchase of the shares by the corporation, all other rights accruing from such
shares, including voting and dividend or distribution rights, are suspended. If
during the suspension, any dividend or distribution is paid in money upon
shares of such class or any dividend, distribution, or interest is paid in
money upon any securities issued in extinguishment of or in substitution for
such shares, an amount equal to the dividend, distribution, or interest which,
except for the suspension, would have been payable upon such shares or
securities, shall be paid to the holder of record as a credit upon the fair
cash value of the shares. If the right to receive fair cash value is terminated
other than by the purchase of the shares by the corporation, all rights of the
holder shall be restored and all distributions which, except for the
suspension, would have been made shall be made to the holder of record of the
shares at the time of termination.
 
                                      E-3
 
                                                                         ANNEXES



         [Outside back cover page of joint proxy statement/prospectus]

 
                    [LOGO OF NEWELL] & [LOGO OF RUBBERMAID]

 Partners with our environment. Printed on recycled paper with soy-based ink.

            [RECYCLE LOGO]                       [SOY INK LOGO]


                                                                      3350-PS-99


 

                PART II INFORMATION NOT REQUIRED IN PROSPECTUS
 
Item 20. Indemnification of Directors and Officers.
 
  Section 102 of the Delaware law allows a corporation to eliminate the
personal liability of a director to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, except in cases
where the director breached his or her duty of loyalty to the corporation or
its stockholders, failed to act in good faith, engaged in intentional
misconduct or a knowing violation of the law, willfully or negligently
authorized the unlawful payment of a dividend or approved an unlawful stock
redemption or repurchase or obtained an improper personal benefit. Newell's
certificate of incorporation contains a provision which eliminates directors'
personal liability as set forth above.
 
  Newell's certificate of incorporation and bylaws provide in effect that
Newell shall indemnify its directors and officers to the extent permitted by
Delaware law. Section 145 of the Delaware law provides that a Delaware
corporation has the power to indemnify its directors, officers, employees and
agents in certain circumstances.
 
  Subsection (a) of Section 145 of the Delaware law empowers a corporation to
indemnify any director, officer, employee or agent, or former director,
officer, employee or agent, who was or is a party or is threatened to be made
a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation), against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with such action, suit or proceeding provided that such
director, officer, employee or agent acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, provided
that such director, officer, employee or agent had no reasonable cause to
believe that his or her conduct was unlawful.
 
  Subsection (b) of Section 145 of the Delaware law empowers a corporation to
indemnify any director, officer, employee or agent, or former director,
officer, employee or agent, who was or is a party or is threatened to be made
a party to any threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor by reason of the
fact that such person acted in any of the capacities set forth above, against
expenses (including attorneys' fees) actually and reasonably incurred in
connection with the defense or settlement of such action or suit provided that
such person acted in good faith and in a manner he or she reasonably believed
to be in or not opposed to the best interests of the corporation, except that
no indemnification may be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Delaware Court of Chancery shall
determine that despite the adjudication of liability such person is fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper.
 
  Section 145 further provides that to the extent that a director or officer
or employee of a corporation has been successful in the defense of any action,
suit or proceeding referred to in subsections (a) and (b) or in the defense of
any claim, issue or matter therein, he or she shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him
or her in connection therewith; that indemnification provided by Section 145
shall not be deemed exclusive of any other rights to which the party seeking
indemnification may be entitled; and the corporation is empowered to purchase
and maintain insurance on behalf of a director, officer, employee or agent of
the corporation against any liability asserted against him or her or incurred
by him or her in any such capacity or arising out of his or her status as such
whether or not the corporation would have the power to indemnify him or her
against such liabilities under Section 145; and that, unless indemnification
is ordered by a court, the determination that indemnification under
subsections (a) and
 
                                     II-1


 
(b) of Section 145 is proper because the director, officer, employee or agent
has met the applicable standard of conduct under such subsections shall be
made by (1) a majority vote of the directors who are not parties to such
action, suit or proceeding, even though less than a quorum, or (2) if there
are no such directors, or if such directors so direct, by independent legal
counsel in a written opinion, or (3) by the stockholders.
 
  Newell has in effect insurance policies for general officers' and directors'
liability insurance covering all of Newell's officers and directors. Newell
also has entered into indemnification agreements with each of its officers and
directors that provide that the officers and directors will be entitled to
their indemnification rights as they existed at the time they entered into the
agreements, regardless of subsequent changes in Newell's indemnification
policy.
 
  Pursuant to the merger agreement, Newell will, to the fullest extent not
prohibited by applicable law, indemnify, defend and hold harmless each person
who is now, or has been at any time prior to the date of the merger agreement,
or who becomes prior to the merger, an officer, director of employee of
Rubbermaid or any of its subsidiaries against any losses, expenses, claims,
damages or liabilities (1) arising out of acts or omissions occurring at or
prior to the time of the merger that are based on or arising out of the fact
that such person is or was a director, officer or employee of Rubbermaid or
any of its subsidiaries or served as a fiduciary under or with respect to any
Rubbermaid employee benefit plan and (2) to the extent they are based on or
arise out of the transactions contemplated by the merger agreement. In
addition, from and after the time of the merger, directors and officers of
Rubbermaid who become directors or officers of Newell will be entitled to
indemnification under Newell's certificate of incorporation and bylaws, as the
same may be amended from time to time in accordance with their terms and
applicable law, and to all other indemnity rights and protections as are
afforded to other directors and officers of Newell.
 
  Additionally, for six years after the merger, Newell will maintain in effect
Rubbermaid's current directors' and officers' liability insurance covering
acts or omissions occurring prior to the merger with respect to those persons
who are currently covered by Rubbermaid's directors' and officers' liability
insurance policy on terms with respect to such coverage and amount no less
favorable than those of such policy in effect on the date of the merger
agreement; provided that Newell may substitute policies of Newell or its
subsidiaries containing terms with respect to coverage and amount no less
favorable to such directors or officers. Newell will not be required to pay
aggregate premiums for the insurance described in this paragraph in excess of
200% of the aggregate premiums paid by Rubbermaid in 1998, except that if the
annual premiums of such insurance coverage exceed such amount, Newell will be
obligated to obtain a policy with the best coverage available, in the
reasonable judgment of the Newell Board, for a cost up to but not exceeding
such amount.
 
  For six years after the merger, Newell will also maintain in effect
Rubbermaid's current fiduciary liability insurance policies for employees who
serve or have served as fiduciaries under any Rubbermaid benefit plan with
coverages and in amounts no less favorable than those of such policy in effect
on the date of the merger agreement.
 
Item 21. Exhibits and Financial Statement Schedules.
 
  (a) Exhibits.
 



 Exhibit
 Number  Description
 ------- -----------
      
  2.1     Agreement and Plan of Merger dated as of October 20, 1998, among
          Newell, Rubbermaid and Rooster Company (included as Annex A to the
          joint proxy statement/prospectus contained in this registration
          statement).
  3.1     Restated Certificate of Incorporation of Newell, as amended as of
          May 10, 1995 (incorporated by reference to Exhibit 3.1 to Newell's
          Quarterly Report on Form 10-Q for the quarter ended June 30,
          1995).
  3.2     Form of Amendment to Restated Certificate of Incorporation of
          Newell, as amended (included as Annex B to the joint proxy
          statement/prospectus contained in this registration statement).


 
 
                                     II-2


 



 Exhibit
 Number  Description
 ------- -----------
      
  3.3     Bylaws of Newell, as amended through November 9, 1995 (incorporated
          by reference to Exhibit 4.2 to Pre-Effective Amendment No. 1 to
          Newell's Registration Statement on Form S-3 (Reg. No. 33-64225),
          filed with the Securities and Exchange Commission on January 23,
          1996).
  3.4     Form of Amendment to Bylaws of Newell.
  4.1     Specimen Newell Common Stock Certificate.
  4.2     Specimen Newell Rubbermaid Inc. Common Stock Certificate.
  4.3     Rights Agreement, dated as of August 6, 1998, between Newell and
          First Chicago Trust Company of New York (incorporated by reference
          to Exhibit I to Newell's Registration Statement on Form 8-A12B (Reg.
          No. 1-09608), filed with the Securities and Exchange Commission on
          August 28, 1998).
  5.1     Opinion of Schiff Hardin & Waite regarding the validity of the
          securities being registered.
  8.1     Opinion of Schiff Hardin & Waite regarding certain federal income
          tax consequences relating to the merger.
  8.2     Opinion of Jones, Day, Reavis & Pogue regarding certain federal
          income tax consequences relating to the merger.
 23.1     Consent of Arthur Andersen LLP.
 23.2     Consent of KPMG LLP.
 23.3     Consent of Schiff Hardin & Waite (included in the opinion filed as
          Exhibit 5.1 to this registration statement).
 23.4     Consent of Schiff Hardin & Waite (included in the opinion filed as
          Exhibit 8.1 to this registration statement).
 23.5     Consent of Jones, Day, Reavis & Pogue (included in the opinion filed
          as Exhibit 8.2 to this registration statement).
 23.6     Consent of Robert W. Baird & Co. Incorporated.
 23.7     Consent of Goldman, Sachs & Co.
 24.1     Power of Attorney (included as part of the signature pages to this
          registration statement).
 99.1     Form of Newell Proxy Card.
 99.2     Form of Rubbermaid Proxy Card.
 99.3     Consent of Tom H. Barrett.
 99.4     Consent of Scott S. Cowen.
 99.5     Consent of Thomas J. Falk.
 99.6     Consent of William D. Marohn.
 99.7     Consent of Wolfgang R. Schmitt.
 99.8     Consent of Gordon R. Sullivan.


 
  (b) Financial Statement Schedules.
 
  Not applicable.
 
  (c) Reports, Opinions or Appraisals.
 
  The opinions of Robert W. Baird & Co. Incorporated and Goldman, Sachs & Co.
are included as Annex C and Annex D, respectively, to the joint proxy
statement/prospectus contained in this registration statement.
 
                                     II-3


 
Item 22. Undertakings.
 
  The undersigned registrant hereby undertakes:
 
    (1) That prior to any public reoffering of the securities registered
  hereunder through use of a prospectus which is a part of this registration
  statement, by any person or party who is deemed to be an underwriter within
  the meaning of Rule 145(c), such reoffering prospectus will contain the
  information called for by the applicable registration form with respect to
  reofferings by persons who may be deemed underwriters, in addition to the
  information called for by the other items of the applicable form.
 
    (2) That every prospectus (i) that is filed pursuant to paragraph (1)
  immediately preceding, or (ii) that purports to meet the requirements of
  Section 10(a)(3) of the Securities Act of 1933 and is used in connection
  with an offering of securities subject to Rule 415, will be filed as a part
  of an amendment to the registration statement and will not be used until
  such amendment is effective, and that, for purposes of determining any
  liability under the Securities Act of 1933, each such post-effective
  amendment shall be deemed to be a new registration statement relating to
  the securities offered therein, and the offering of such securities at that
  time shall be deemed to be the initial bona fide offering thereof.
 
    (3) That, for purposes of determining any liability under the Securities
  Act of 1933, each filing of the registrant's annual report pursuant to
  Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
  applicable, each filing of an employee benefit plan's annual report
  pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
  incorporated by reference in the registration statement shall be deemed to
  be a new registration statement relating to the securities offered therein,
  and the offering of such securities at that time shall be deemed to be the
  initial bona fide offering thereof.
 
    (4) Insofar as indemnification for liabilities arising under the
  Securities Act of 1933 may be permitted to directors, officers and
  controlling persons of the registrant pursuant to the foregoing provisions,
  or otherwise, the registrant has been advised that in the opinion of the
  Securities and Exchange Commission such indemnification is against public
  policy as expressed in the Securities Act of 1933 and is, therefore,
  unenforceable. In the event that a claim for indemnification against such
  liabilities (other than the payment by registrant of expenses incurred or
  paid by a director, officer or controlling person of the registrant in the
  successful defense of any action, suit or proceeding) is asserted by such
  director, officer or controlling person in connection with the securities
  being registered, the registrant will, unless in the opinion of its counsel
  the matter has been settled by controlling precedent, submit to a court of
  appropriate jurisdiction the question whether such indemnification by it is
  against public policy as expressed in the Securities Act of 1933 and will
  be governed by the final adjudication of such issue.
 
    (5) To respond to requests for information that is incorporated by
  reference into the joint proxy statement/prospectus pursuant to Item 4,
  10(b), 11 or 13 of Form S-4, within one business day of receipt of such
  request, and to send the incorporated documents by first class mail or
  other equally prompt means. This includes information contained in
  documents filed subsequent to the effective date of the registration
  statement through the date of responding to the request.
 
    (6) To supply by means of a post-effective amendment all information
  concerning a transaction, and the company being acquired involved therein,
  that was not the subject of and included in the registration statement when
  it became effective.
 
                                     II-4


 

                                  SIGNATURES
   
  Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-4 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Orlando, State of Florida, on this
3rd day of February, 1999.     
 
                                          Newell Co.
                                          (Registrant)
 
                                                 /s/ William T. Alldredge
                                          By: _________________________________
                                                   William T. Alldredge
                                                 Vice President--Finance
 
  Each person whose signature appears below appoints John J. McDonough,
William T. Alldredge and Dale L. Matschullat, or any of them, as such person's
true and lawful attorneys to execute in the name of each such person, and to
file, any amendments to this registration statement that any of such attorneys
shall deem necessary or advisable to enable the registrant to comply with the
Securities Act of 1933, as amended, and any rules, regulations and
requirements of the Securities and Exchange Commission with respect thereto,
in connection with this registration statement, which amendments may make such
changes in such registration statement as any of the above-named attorneys
deems appropriate, and to comply with the undertakings of the registrant made
in connection with this registration statement; and each of the undersigned
hereby ratifies all that any of said attorneys shall do or cause to be done by
virtue thereof.
 
  Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
 

   

             Signature                           Title                    Date
             ---------                           -----                    ----
 
 
                                                             
/s/ John J. McDonough                Vice Chairman and Chief        February 3, 1999
____________________________________  Executive Officer
John J. McDonough                     (Principal Executive
                                      Officer) and Director
 
/s/ Thomas A. Ferguson, Jr.          President and Chief            February 3, 1999
____________________________________  Operating Officer and
Thomas A. Ferguson, Jr.               Director
 
/s/ Donald L. Krause                 Senior Vice President--        February 3, 1999
____________________________________  Corporate Controller
Donald L. Krause                      (Principal Accounting
                                      Officer)
 
/s/ William T. Alldredge             Vice President--Finance        February 3, 1999
____________________________________  (Principal Financial
William T. Alldredge                  Officer)
 

    
 
 
                                     II-5


 

   

             Signature                           Title                    Date
             ---------                           -----                    ----
 
 
                                                             
/s/ William P. Sovey                 Chairman of the Board of       February 3, 1999
____________________________________  Directors
William P. Sovey
 
/s/ Alton F. Doody                   Director                       February 3, 1999
____________________________________
Alton F. Doody
 
/s/ Gary H. Driggs                   Director                       February 3, 1999
____________________________________
Gary H. Driggs
 
/s/ Daniel C. Ferguson               Director                       February 3, 1999
____________________________________
Daniel C. Ferguson
 
/s/ Robert L. Katz                   Director                       February 3, 1999
____________________________________
Robert L. Katz
 
/s/ Elizabeth Cuthbert Millett       Director                       February 3, 1999
____________________________________
Elizabeth Cuthbert Millett
 
/s/ Cynthia A. Montgomery            Director                       February 3, 1999
____________________________________
Cynthia A. Montgomery
 
/s/ Allan P. Newell                  Director                       February 3, 1999
____________________________________
Allan P. Newell
 
/s/ Henry B. Pearsall                Director                       February 3, 1999
____________________________________
Henry B. Pearsall

    
 
                                      II-6


 

                                 EXHIBIT INDEX
 



  Exhibit
  Number   Description
  -------  -----------
                                                                      
  2.1      Agreement and Plan of Merger dated as of October 20, 1998,
           among Newell, Rubbermaid and Rooster Company (included as
           Annex A to the joint proxy statement/prospectus contained in
           this registration statement).
  3.1      Restated Certificate of Incorporation of Newell, as amended as
           of May 10, 1995 (incorporated by reference to Exhibit 3.1 to
           Newell's Quarterly Report on Form
           10-Q for the quarter ended June 30, 1995).
  3.2      Form of Amendment to Restated Certificate of Incorporation of
           Newell, as amended (included as Annex B to the joint proxy
           statement/prospectus contained in this registration
           statement).
  3.3      Bylaws of Newell, as amended through November 9, 1995
           (incorporated by reference to Exhibit 4.2 to Pre-Effective
           Amendment No. 1 to Newell's Registration Statement on Form S-3
           (Reg. No. 33-64225), filed with the Securities and Exchange
           Commission on January 23, 1996).
  3.4      Form of Amendment to Bylaws of Newell.
  4.1      Specimen Newell Common Stock Certificate.
  4.2      Specimen Newell Rubbermaid Inc. Common Stock Certificate.
  4.3      Rights Agreement, dated as of August 6, 1998, between Newell
           and First Chicago Trust Company of New York (incorporated by
           reference to Exhibit I to Newell's Registration Statement on
           Form 8-A12B (Reg. No. 1-09608), filed with the Securities and
           Exchange Commission on August 28, 1998).
  5.1      Opinion of Schiff Hardin & Waite regarding the validity of the
           securities being registered.
  8.1      Opinion of Schiff Hardin & Waite regarding certain federal
           income tax consequences relating to the merger.
  8.2      Opinion of Jones, Day, Reavis & Pogue regarding certain
           federal income tax consequences relating to the merger.
 23.1      Consent of Arthur Andersen LLP.
 23.2      Consent of KPMG LLP.
 23.3      Consent of Schiff Hardin & Waite (included in the opinion
           filed as Exhibit 5.1 to this registration statement).
 23.4      Consent of Schiff Hardin & Waite (included in the opinion
           filed as Exhibit 8.1 to this registration statement).
 23.5      Consent of Jones, Day, Reavis & Pogue (included in the opinion
           filed as Exhibit 8.2 to this registration statement).
 23.6      Consent of Robert W. Baird & Co. Incorporated.
 23.7      Consent of Goldman, Sachs & Co.
 24.1      Power of Attorney (included as part of the signature pages to
           this registration statement).


 
 
                                      II-7


 



  Exhibit
  Number   Description
  -------  -----------
                                       
 99.1      Form of Newell Proxy Card.
 99.2      Form of Rubbermaid Proxy Card.
 99.3      Consent of Tom H. Barrett.
 99.4      Consent of Scott S. Cowen.
 99.5      Consent of Thomas J. Falk.
 99.6      Consent of William D. Marohn.
 99.7      Consent of Wolfgang R. Schmitt.
 99.8      Consent of Gordon R. Sullivan.


 
                                      II-8






 
                                                                     Exhibit 3.4
                                                                     -----------


                               FORM OF AMENDMENT

                                      TO

                               DELAWARE BY-LAWS

                                      OF

                                  NEWELL CO.


                               AMENDMENT NO. 11

  (Article III, Sections 3.2, 3.4 and 3.14-3.18; Article IV, Sections 4.1 and
     4.5- 4.7; Article V, Section 5.1; Article VI, Section 6.1, as amended
                  by the Board of Directors _________, 1999)


                                  ARTICLE III

                                   DIRECTORS
                                   ---------

     3.2 Number, Tenure and Qualification. The number of directors of the
Corporation shall be fifteen, and the term of office of each director shall be
as set forth in the Restated Certificate of Incorporation, as amended. A
director may resign at any time upon written notice to the Corporation.
Directors need not be stockholders of the Corporation.

     3.4 Special Meetings. Special meetings of the Board of Directors may be
called by or at the request of the Chief Executive Officer or any two directors.
The person or persons authorized to call special meetings of the Board of
Directors may fix any place, either within or without the State of Delaware, as
the place for holding any special meeting of the Board of Directors called by
him or them.

     3.14 Chairman and Vice Chairmen. The Board of Directors may from time to
time designate from among its members a Chairman of the Board and one or more
Vice Chairmen. The Chairman shall preside at all meetings of the Board of
Directors.
 In the absence of the Chairman of the Board, the Chief Executive
Officer and the President and Chief Operating Officer, and, in their absence, a
Vice Chairman (with the longest tenure as Vice Chairman), shall preside at all
meetings of the Board of Directors. The Chairman and each of the Vice Chairmen
shall have such other responsibilities as may from time to time be assigned to
each of them by the Board of Directors.

                                  ARTICLE IV

                                   OFFICERS
                                   --------

     4.1 Number. The officers of the Corporation shall be a Chief Executive
Officer, a President and Chief Operating Officer, one or more Group Presidents
(the number thereof to be determined by the Board of Directors), one or more
vice presidents (the number thereof to be determined by the Board of Directors),
a Treasurer, a


 
Secretary and such Assistant Treasurers, Assistant Secretaries or other officers
as may be elected by the Board of Directors.

     4.5 [Intentionally omitted.]

     4.6 The Chief Executive Officer. The Chief Executive Officer shall be the
principal executive officer of the Corporation. Subject only to the Board of
Directors, he shall be in charge of the business of the Corporation; he shall
see that the resolutions and directions of the Board of Directors are carried
into effect except in those instances in which that responsibility is
specifically assigned to some other person by the Board of Directors; and, in
general, he shall discharge all duties incident to the office of the chief
executive officer of the Corporation and such other duties as may be prescribed
by the Board of Directors from time to time. In the absence of the Chairman of
the Board, the Chief Executive Officer shall preside at all meetings of the
Board of Directors. The Chief Executive Officer shall have authority to vote or
to refrain from voting any and all shares of capital stock of any other
corporation standing in the name of the Corporation, by the execution of a
written proxy, the execution of a written ballot, the execution of a written
consent or otherwise, and, in respect to any meeting of the stockholders of such
other corporation, and, on behalf of the Corporation, may waive any notice of
the calling of any such meeting. The Chief Executive Officer or, in his absence,
the President and Chief Operating Officer, the Vice President-Finance, the Vice
President-Controller, the Treasurer or such other person as the Board of
Directors or one of the preceding named officers shall designate, shall call any
meeting of the stockholders of the Corporation to order and shall act as
chairman of such meeting. In the event that no one of the Chief Executive
Officer, the President and Chief Operating Officer, the Vice President-Finance,
the Vice President-Controller, the Treasurer or a person designated by the Board
of Directors or by one of the preceding named officers, is present, the meeting
shall not be called to order until such time as there shall be present the Chief
Executive Officer, the President and Chief Operating Officer, the Vice
President-Finance, the Vice President-Controller, the Treasurer or a person
designated by the Board of Directors or by one of the preceding named officers.
The chairman of any meeting of the stockholders of this Corporation shall have
plenary power to set the agenda, determine the procedure and rules of order, and
make definitive rulings at meetings of the stockholders. The Secretary or an
Assistant Secretary of the Corporation shall act as secretary at all meetings of
the stockholders, but in the absence of the Secretary or an Assistant Secretary,
the chairman of the meeting may appoint any person to act as secretary of the
meeting.

     4.7 The President and Chief Operating Officer. The President and Chief
Operating Officer shall be the principal operating officer of the Corporation
and, subject only to the Board of Directors and to the Chief Executive Officer,
he shall have the general authority over and general management and control of
the property, business and affairs of the Corporation. In general, he shall
discharge all duties incident to the office of the principal operating officer
of the Corporation and such other duties as may be prescribed by the Board of
Directors and the Chief Executive Officer from time to time. In the absence of
the Chairman of the Board and the Chief Executive Officer, the President and
Chief Operating Officer shall preside at all meetings of the Board of Directors.
In the absence of the Chief Executive Officer or in the event of his disability,
or inability to act, or to continue to act, the President and Chief Operating
Officer shall perform the duties of the Chief Executive Officer, and when so
acting, shall have all of the powers of and be subject to all of the
restrictions upon the office of Chief Executive Officer. Except in those
instances in which the authority to execute is expressly delegated to another
officer or agent of the Corporation or a different mode of execution is
expressly prescribed by the Board of Directors or these By-Laws, he may execute
for the Corporation certificates for its shares (the issue of which shall have
been authorized by the Board of Directors), and any contracts, deeds, mortgages,
bonds, or other instruments that the Board of Directors has authorized, and he
may (without previous authorization by the Board of Directors) execute such
contracts and other instruments as the conduct of the Corporation's business in
its ordinary course requires, and he may accomplish such execution in each case
either individually or with the Secretary, any Assistant Secretary, or any other
officer thereunto authorized by the Board of Directors, according to the
requirements of the form of the instrument. The President and Chief Operating
Officer shall have authority to vote or to refrain from voting any and all
shares of capital stock of any other corporation standing in the name of the
Corporation, by the execution of a written proxy, the execution of a written
ballot, the execution of a written consent or otherwise, and,

                                      B-2


 
in respect of any meeting of stockholders of such other corporation, and, on
behalf of the Corporation, may waive any notice of the calling of any such
meeting.

                                   ARTICLE V

                     CONTRACTS, LOANS, CHECKS AND DEPOSITS
                     -------------------------------------

     5.1 Contracts. Except as otherwise determined by the Board of Directors or
provided in these By-Laws, all deeds and mortgages made by the Corporation and
all other written contracts and agreements to which the Corporation shall be a
party shall be executed in its name by the Chief Executive Officer, the
President and Chief Operating Officer, or any Vice President so authorized by
the Board of Directors.

                                  ARTICLE VI

                                 CAPITAL STOCK
                                 -------------

     6.1 Share Ownership; Transfers of Stock. Shares of the capital stock of the
Corporation may be certificated or uncertificated. Owners of shares of the
capital stock of the Corporation shall be recorded in the books of the
Corporation and ownership of such shares shall be evidenced by a certificate or
book entry notation in the books of the Corporation. If shares are represented
by certificates, such certificates shall be in such form as may be determined by
the Board of Directors. Certificates shall be signed by the Chief Executive
Officer or the President and Chief Operating Officer or any Vice President and
by the Treasurer or the Secretary or an Assistant Secretary. If any such
certificate is countersigned by a transfer agent other than the Corporation or
its employee, or by a registrar other than the Corporation or its employee, any
other signature on the certificate may be a facsimile. In case any officer,
transfer agent or registrar who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer, transfer agent
or registrar before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer, transfer agent or
registrar at the date of issue. All certificates for shares of capital stock
shall be consecutively numbered or otherwise identified. The name of the person
to whom the shares represented thereby are issued, with the number of shares and
date of issue, shall be entered on the books of the Corporation. Each
certificate surrendered to the Corporation for transfer shall be cancelled and
no new certificate or other evidence of new shares shall be issued until the
former certificate for a like number of shares shall have been surrendered and
cancelled, except that in case of a lost, destroyed or mutilated certificate, a
new certificate or other evidence of new shares may be issued therefor upon such
terms and indemnity to the Corporation as the Board of Directors may prescribe.
Uncertificated shares shall be transferred in the books of the Corporation upon
the written instruction originated by the appropriate person to transfer the
shares.

                                      B-3




 
                                                                     Exhibit 4.1
                                                                     -----------


                [SPECIMEN NEWELL CO. COMMON STOCK CERTIFICATE]

                                  NEWELL CO.
             INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

  NUMBER                                                            COMMON STOCK
CN
                                                                       SHARES

[Graphic depicting a statue of a woman
holding a sign with Newell's logo]                             SEE REVERSE FOR
                                                             CERTAIN DEFINITIONS

                                                               CUSIP 651192 10 6

THIS CERTIFIES THAT


IS THE OWNER OF

     FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK $1 PAR VALUE

of Newell Co. transferable on the books of the Corporation by the holder hereof
in person or by duly authorized attorney upon surrender of this certificate
properly endorsed. This certificate and the shares represented hereby are issued
under and shall be subject to all of the provisions of the Certificate of
Incorporation and the By-Laws of the Corporation and any amendments thereto,
copies of which are on file with the Corporation and the Transfer Agent, to all
of which the holder, by acceptance hereof, assents. This certificate is not
valid unless countersigned by the Transfer Agent and registered by the
Registrar.

[Newell logo]
[Newell corporate seal]

Witness the seal of the Corporation and the facsimile signatures of its duly
authorized officers.

Dated:
                         /s/ Richard H. Wolff       /s/ William P. Sovey
                         --------------------       -----------------------
                         SECRETARY                  VICE CHAIRMAN AND

                                                    CHIEF EXECUTIVE OFFICER


                         Countersigned and Registered:
                         FIRST CHICAGO TRUST COMPANY OF NEW YORK
                                                    Transfer Agent and Registrar

                         by

                         Authorized signature


 
[Sticker affixed to certificate with the following text: "This certificate also
evidences and entitles the holder hereof to certain Rights as set forth in a
Rights Agreement between Newell Co. and First Chicago Trust Company of New York
dated as of August 6, 1998 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file at the
principal executive offices of Newell Co. Under certain circumstances, as set
forth in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. Newell Co.
will mail to the holder of this certificate a copy of the Rights Agreement
without charge promptly upon receipt of a written request therefor. Under
certain circumstances, Rights beneficially owned by any Person who is, was or
becomes an Acquiring Person or any Affiliate or Associate thereof (as such terms
are defined in the Rights Agreement), whether then held by or on behalf of such
Person or by any subsequent holder, may become null and void."]

     The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

     TEN COM  -- as tenants in common  UNIF GIFT MIN ACT..........Custodian.....
                                                         (Cust)          (Minor)
     TEN ENT  -- as tenants by the entireties      under Uniform Gifts to Minors
                                                   Act
     JT TEN  -- as joint tenants with rights of
                survivorship and not as tenants    ............................
                in common                                   (State)

        Additional abbreviations may also be used though not in the above list.

     For value received _____ hereby sell assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
 

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

- --------------------------------------------------------------------------------
 (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

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

- --------------------------------------------------------------------------------
Shares of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint _____________________________________________
Attorney to transfer the said stock on the books of the within named Corporation
with full power of substitution in the premises.

Dated

AFFIX MEDALLION SIGNATURE              X
GUARANTEE IMPRINT BELOW                 ----------------------------------------
                                                 (SIGNATURE)

                                       X
                                        ----------------------------------------
                                                 (SIGNATURE)


 
                                       -----------------------------------------
                                       ABOVE SIGNATURE(S) TO THIS ASSIGNMENT
                                       MUST CORRESPOND WITH THE NAME AS WRITTEN
                                       UPON THE FACE OF THE CERTIFICATE IN EVERY
                                       PARTICULAR, WITHOUT ALTERATION OR
                                       ENLARGEMENT, OR ANY CHANGE WHATEVER.

                                       THE SIGNATURE(S) MUST BE GUARANTEED BY AN
                                       ELIGIBLE GUARANTOR INSTITUTION SUCH AS A
                                       SECURITIES BROKER/DEALER, COMMERCIAL BANK
                                       & TRUST COMPANY SAVINGS AND LOAN
                                       ASSOCIATION OR A CREDIT UNION
                                       PARTICIPATING IN A MEDALLION PROGRAM
                                       APPROVED BY THE SECURITIES TRANSFER
                                       ASSOCIATION, INC.




 
                                                                     Exhibit 4.2
                                                                     -----------

          [SPECIMEN NEWELL RUBBERMAID INC. COMMON STOCK CERTIFICATE]

                                  NEWELL CO.
    [STAMP AFFIXED WITH THE WORDS "NAME CHANGED TO NEWELL RUBBERMAID INC."]
             INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

  NUMBER                                                            COMMON STOCK
CN
                                                                       SHARES

[Graphic depicting a statue of a woman
holding a sign with Newell's logo]                             SEE REVERSE FOR
                                                             CERTAIN DEFINITIONS

                                                               CUSIP 651229 10 6

THIS CERTIFIES THAT


IS THE OWNER OF

     FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK $1 PAR VALUE

of Newell Co. transferable on the books of the Corporation by the holder hereof
in person or by duly authorized attorney upon surrender of this certificate
properly endorsed. This certificate and the shares represented hereby are issued
under and shall be subject to all of the provisions of the Certificate of
Incorporation and the By-Laws of the Corporation and any amendments thereto,
copies of which are on file with the Corporation and the Transfer Agent, to all
of which the holder, by acceptance hereof, assents. This certificate is not
valid unless countersigned by the Transfer Agent and registered by the
Registrar.

[Newell logo]
[Newell corporate seal]

Witness the seal of the Corporation and the facsimile signatures of its duly
authorized
 officers.

Dated:
                         /s/ Richard H. Wolff       /s/ John J. McDonough
                         --------------------       -----------------------
                         SECRETARY                  VICE CHAIRMAN AND
                                                    CHIEF EXECUTIVE OFFICER


                         Countersigned and Registered:
                         FIRST CHICAGO TRUST COMPANY OF NEW YORK
                                                    Transfer Agent and Registrar

                         by

                         Authorized signature


 
[Sticker affixed to certificate with the following text: "This certificate also
evidences and entitles the holder hereof to certain Rights as set forth in a
Rights Agreement between Newell Co. and First Chicago Trust Company of New York
dated as of August 6, 1998 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file at the
principal executive offices of Newell Co.  Under certain circumstances, as set
forth in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate.  Newell Co.
will mail to the holder of this certificate a copy of the Rights Agreement
without charge promptly upon receipt of a written request therefor.  Under
certain circumstances, Rights beneficially owned by any Person who is, was or
becomes an Acquiring Person or any Affiliate or Associate thereof (as such terms
are defined in the Rights Agreement), whether then held by or on behalf of such
Person or by any subsequent holder, may become null and void."]

     The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

     TEN COM  -- as tenants in common  UNIF GIFT MIN ACT..........Custodian.....
                                                         (Cust)          (Minor)
     TEN ENT  -- as tenants by the entireties      under Uniform Gifts to Minors
                                                   Act
     JT TEN  -- as joint tenants with rights of
                survivorship and not as tenants    ............................
                in common                                   (State)

        Additional abbreviations may also be used though not in the above list.

     For value received _____ hereby sell assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
 

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

- --------------------------------------------------------------------------------
 (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

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

- --------------------------------------------------------------------------------
Shares of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint _____________________________________________
Attorney to transfer the said stock on the books of the within named Corporation
with full power of substitution in the premises.

Dated

AFFIX MEDALLION SIGNATURE              X
GUARANTEE IMPRINT BELOW                 ----------------------------------------
                                                 (SIGNATURE)

                                       X
                                        ----------------------------------------
                                                 (SIGNATURE)


 
                                       -----------------------------------------
                                       ABOVE SIGNATURE(S) TO THIS ASSIGNMENT
                                       MUST CORRESPOND WITH THE NAME AS WRITTEN
                                       UPON THE FACE OF THE CERTIFICATE IN EVERY
                                       PARTICULAR, WITHOUT ALTERATION OR
                                       ENLARGEMENT, OR ANY CHANGE WHATEVER.

                                       THE SIGNATURE(S) MUST BE GUARANTEED BY AN
                                       ELIGIBLE GUARANTOR INSTITUTION SUCH AS A
                                       SECURITIES BROKER/DEALER, COMMERCIAL BANK
                                       & TRUST COMPANY SAVINGS AND LOAN
                                       ASSOCIATION OR A CREDIT UNION
                                       PARTICIPATING IN A MEDALLION PROGRAM
                                       APPROVED BY THE SECURITIES TRANSFER
                                       ASSOCIATION, INC.




 
                                                                     Exhibit 5.1
                                                                     -----------


                      [Schiff Hardin & Waite letterhead]
 
                             Schiff Hardin & Waite
                               6600 Sears Tower
                            Chicago, Illinois 60606


February 4, 1999
                   

Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549-1004

     Re:  Newell Co.
          Registration Statement on Form S-4
          ----------------------------------

Ladies and Gentlemen:

     We are acting as counsel to Newell Co., a Delaware corporation ("Newell"),
in connection with the Registration Statement on Form S-4 filed by Newell with
the Securities and Exchange Commission (the "Registration Statement") with
respect to up to 121,721,850 shares of common stock, par value $1.00 per share
(the "Newell Shares"), of Newell that are proposed to be issued in connection
with the merger (the "Merger") of Rooster Company, an Ohio corporation and a
wholly owned subsidiary of Newell ("Merger Sub"), with and into Rubbermaid
Incorporated, an Ohio corporation ("Rubbermaid"), as described in the Joint
Proxy Statement/Prospectus that is a part of the Registration Statement (the
"Joint Proxy Statement/Prospectus").

     In connection with this opinion, we have reviewed the Registration
Statement and the exhibits thereto, and we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such corporate
records,
 agreements, certificates of public officials and of officers of Newell
and Merger Sub, and other instruments in addition to such matters of law and
fact as we have deemed necessary to render the opinion contained herein.

     Based upon and subject to the foregoing, we are of the opinion that the
Newell Shares being registered under the Registration Statement, when issued
pursuant to the Merger following approval of the issuance of the Newell Shares
by the requisite vote of the stockholders of Newell, will be validly issued,
fully paid and non-assessable.

     We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement and to the
reference to our firm under the caption "LEGAL MATTERS" in the Joint Proxy
Statement/Prospectus contained therein. In giving such consent, we do not hereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended.

                                       Very truly yours,

                                       SCHIFF HARDIN & WAITE


                                       By: /s/ Andrea L. Horne
                                           -------------------------------------
                                            Andrea L. Horne






 
                                                                     Exhibit 8.1
                                                                     -----------


                      [Schiff Hardin & Waite letterhead]

                             Schiff Hardin & Waite
                               6600 Sears Tower
                            Chicago, Illinois 60606

February 4, 1999


Newell Co.
29 East Stephenson Street
Freeport, Illinois 61032

     Re:  Federal Income Tax Consequences of a Merger of a Newly Formed
          Wholly Owned Subsidiary of Newell Co. with and into Rubbermaid
          Incorporated
          --------------------------------------------------------------

Ladies and Gentlemen:

     You have requested our opinion relating to the federal income tax
consequences to Newell Co. ("Newell"), Rubbermaid Incorporated ("Rubbermaid")
and Rooster Company, a wholly-owned subsidiary of Newell ("Acquisition"),
arising out of the Agreement and Plan of Merger, dated as of October 20, 1998,
by and between Newell, Acquisition and Rubbermaid (the "Merger Agreement"). Our
conclusions are based upon (i) the facts and assumptions set forth below and
(ii) the written representations to be made by Rubbermaid to us as of this date
and updated at the Effective Time (the "Rubbermaid Letter") and the written
representations to be made by Newell to us as of this date and updated at the
Effective Time (the "Newell Letter"). Capitalized terms used but not defined in
this letter have the meaning given them in the Merger Agreement.

     Our opinion does not address the tax consequences of the Merger
 under
state, local or foreign law.

                                     FACTS

     Pursuant to the Merger Agreement, Acquisition shall be merged with and into
Rubbermaid in accordance with the applicable provisions of the laws of the State
of Ohio (the "Merger"). Rubbermaid shall be the surviving corporation in the
Merger and shall continue its corporate existence under the laws of the State of
Ohio. As a result of the Merger, Acquisition shall cease to exist and Company
shall remain a direct wholly-owned subsidiary of Newell.

     As a result of the Merger, each share of common stock, par value $1.00 per
share, of Rubbermaid ("Rubbermaid Shares"), will be converted into the right to
receive 0.7883 of a share of fully paid and nonassessable shares of common
stock, par value $1.00 per share, of Newell ("Newell Shares"). Newell will pay
cash to any Rubbermaid shareholder in lieu of delivering to such shareholder a
fractional Newell Share.

                                  ASSUMPTIONS

     In rendering our opinion, we have assumed with your consent that (i) the
proposed transactions will be consummated strictly in accordance with the terms
and conditions described in the Merger Agreement, and (ii) the representations
made to us by Rubbermaid in the Rubbermaid Letter and by Newell in the Newell
Letter are true as of this date and will be true at the Effective Time. With
regard to the Rubbermaid Letter or the Newell Letter, we have assumed that any
representation made therein to the best of the knowledge of the management of
Rubbermaid and Newell, respectively, will be true without that qualification.


 
Newell Co.
February 4, 1999
Page 2


                                    OPINION

     Based on the facts and assumptions set forth above and our examination and
review of the Merger Agreement, the Joint Proxy Statement/Prospectus included in
the Registration Statement on Form S-4 and accompanying exhibits dated February
4, 1999 (as amended, the "Registration Statement") and the document referred to
above, we are of the opinion that:

     (1) The Merger will qualify as a reorganization within the meaning of
Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the
"Code") and each of Rubbermaid, Newell and Acquisition will be "parties" to a
reorganization within the meaning of Section 368(b) of the Code.

     (2) No gain or loss will be recognized by Rubbermaid, Newell or Acquisition
in connection with the Merger.

     We express no opinion concerning any tax consequences of the Merger, other
than those specifically set forth above.

                               SCOPE OF OPINION

     Our opinion is based on present law and existing interpretations thereof by
the courts and the Internal Revenue Service. Any change in the facts, currently
or in the future, or any change in the law or existing interpretations thereof,
may adversely affect our opinion. Further, our opinion is not binding on the
Internal Revenue Service and the tax effects discussed above are not subject to
absolute resolution prior to the running of the statute of limitations or the
rendering of a final determination by a court of law or by closing agreement
with the Internal Revenue Service. Finally, it should be noted that we have
expressed no opinion except as specifically set forth herein.

                                   CONSENTS

     We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement and to the
reference to our firm under the heading "The Merger - Material Federal Income
Tax Consequences" in the Joint Proxy Statement/Prospectus that constitutes part
of the Registration Statement.

                                       SCHIFF HARDIN & WAITE


                                       By: /s/ Lawrence H. Jacobson
                                           -------------------------------------
                                               Lawrence H. Jacobson

                                       2




 
                                                                     Exhibit 8.2
                                                                     -----------


                          JONES, DAY, REAVIS & POGUE
                              901 Lakeside Avenue
                             Cleveland, Ohio 44114


                               February 4, 1999


Rubbermaid Incorporated
1147 Akron Road
Wooster, Ohio 44691

     Re:  Merger of Rooster Company, a wholly-owned subsidiary
          of Newell Co., with and into Rubbermaid Incorporated
          ----------------------------------------------------

Ladies and Gentlemen:

     We have acted as counsel to Rubbermaid Incorporated ("Rubbermaid") in
connection with the merger of Rooster Company ("Merger Sub"), a wholly-owned
subsidiary of Newell Co. ("Newell"), with and into Rubbermaid (the "Merger"), as
described in the Registration Statement on Form S-4 to which this opinion
appears as Exhibit 8.2 (the "Registration Statement") and which includes the
Joint Proxy Statement of Newell Co. and Rubbermaid Incorporated and Prospectus
of Newell Co. (the "Joint Proxy Statement/Prospectus"), and as contemplated by
the Agreement and Plan of Merger by and among Newell, Merger Sub, and Rubbermaid
dated as of October 20, 1998 (the "Merger Agreement").

     In giving this opinion, we have reviewed and with your permission have
relied on the representations, warranties, and other statements contained in the
Joint Proxy Statement/Prospectus, the Merger Agreement, and certificates dated
February 4, 1999 in which officers of Rubbermaid,
 Newell, and Merger Sub make
representations on behalf of their respective corporations regarding the Merger
(the "Tax Certificates"). We have with your permission assumed that the
representations in the Tax Certificates are true, accurate, and complete as of
the date of this opinion and that the Merger is being consummated in the manner
described in the Joint Proxy Statement/Prospectus and the Merger Agreement.

     Based on the foregoing, and subject to the limitations contained in this
letter and in the Joint Proxy Statement/Prospectus, we are of the opinion that
the Merger will constitute a "reorganization" within the meaning of Section
368(a) of the Internal Revenue Code (the "Code") and that each of Rubbermaid,
Newell and Merger Sub will be a party to the "reorganization" within the meaning
of Section 368(b) of the Code. In addition (and subject to the limitations
contained in this letter and in the Joint Proxy Statement/Prospectus), the
statements of legal conclusion set forth under the caption"Tax Consequences of
the Merger" in the Joint Proxy Statement/Prospectus reflect our opinion as to
material federal income tax consequences of the Merger to the stockholders of
Rubbermaid.

     We express no opinion as to the laws of any jurisdiction other than the
United States of America. Further, our opinion is limited to the specific
conclusions set forth above, and no other opinion is expressed or implied. This
opinion is based on the currently applicable provisions of the Code, Treasury
regulations, current published positions of the Internal Revenue Service, and
judicial decisions published to date, all of which are subject to change, which
change may be retroactive. Opinions of counsel are not binding on the Internal
Revenue Service, which may assert positions contrary to those stated in this
opinion letter.



 
Rubbermaid Incorporated
February 4, 1999
Page 2


     We hereby consent to be named in the Registration Statement under the
heading "Material Federal Income Tax Consequences" and to the filing of a copy
of this opinion as Exhibit 8.2 to the Registration Statement. In giving this
consent, we do not admit that we are within the category of persons whose
consent is required by Section 7 of the Securities Act, or the rules and
regulations of the Securities and Exchange Commission thereunder.

                                       Very truly yours,

                                       /s/ Jones, Day, Reavis & Pogue




 
                                                                    Exhibit 23.1
                                                                    ------------


                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

     As independent public accountants, we hereby consent to the incorporation
by reference of our report, dated May 7, 1998, included in Newell Co.'s Current
Report on Form 8-K, dated November 17, 1998, into this Form S-4 Registration
Statement and into Newell Co.'s previously filed Form S-3 Registration Statement
File No. 333-53039, and to all references to our Firm included in this Form S-4
Registration Statement.


                                       /s/ Arthur Andersen LLP
                                       -----------------------------------------
                                       ARTHUR ANDERSEN LLP


Milwaukee, Wisconsin
February 1, 1999






 
                                                                    Exhibit 23.2
                                                                    ------------


                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

     We consent to the incorporation by reference into this Form S-4
Registration Statement of our report dated January 30, 1998, with respect to the
consolidated balance sheets of Rubbermaid Incorporated and subsidiaries as of
December 31, 1997 and 1996, and the related consolidated statements of earnings,
cash flows, and shareholders' equity for each of the years in the three-year
period ended December 31, 1997, and to the reference to our Firm under the
heading "Experts" in the joint proxy statement/prospectus included in this Form
S-4 Registration Statement.



                                       /s/ KPMG LLP
                                       -----------------------------------------
                                       KPMG LLP


Cleveland, Ohio
February 1, 1999






 
                                                                    Exhibit 23.6
                                                                    ------------


                 CONSENT OF ROBERT W. BAIRD & CO. INCORPORATED

     Robert W. Baird & Co. Incorporated ("Baird") hereby consents to the
inclusion in the Joint Proxy Statement/Prospectus of Newell Co. and Rubbermaid
Incorporated, as a part of this Registration Statement on Form S-4 of Newell
Co., of its opinion dated October 20, 1998 and to the references made to Baird
in the sections of such Proxy Statement/Prospectus entitled "Summary--Opinions
of Financial Advisors," "The Merger--Background of the Merger," "The Merger--
Recommendation of the Newell Board; Newell's Reasons for the Merger," and
"Opinions of Financial Advisors--Opinion of Financial Advisor to Newell." In
giving such consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933
or the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.


                                       /s/ ROBERT W. BAIRD & CO. INCORPORATED
                                       --------------------------------------
                                       ROBERT W. BAIRD & CO. INCORPORATED

February 2, 1999






 
                                                                    Exhibit 23.7

PERSONAL AND CONFIDENTIAL

February 4, 1999


Board of Directors
Rubbermaid Incorporated 
1147 Akron Road
Wooster, OH 44691-6000

Re:  Registration Statement on Form S-4 of Newell Co. filed on February 4, 1999

Ladies and Gentlemen:

Reference is made to our opinion letter dated October 20, 1998 with respect to 
the fairness from a financial point of view to the holders of the outstanding 
shares of Common Stock, par value $1.00 per share (the "Company Common Stock"), 
of Rubbermaid Incorporated (the "Company") of the exchange ratio of 0.7883 
shares of Common Stock, par value $1.00 per share, of Newell Co. ("Newell") to 
be received for each share of Company Common Stock pursuant to the Agreement 
and Plan of Merger, dated as of October 20, 1998, by and between Newell, 
Rooster Company, a wholly-owned subsidiary of Newell, and the Company.

The foregoing opinion letter is provided for the information and assistance of 
the Board of Directors of the Company in connection with its consideration of 
the transaction contemplated therein and is not to be used, circulated, quoted 
or otherwise referred to for any other purpose, nor is it to be filed with, 
included in or referred to in whole or in part in any registration statement, 
proxy
 statement or any other document, except in accordance with our prior 
written consent. We understand that the Company has determined to include our 
opinion in the above-referenced Registration Statement.

In that regard, we hereby consent to the reference to the opinion of our Firm 
under the captions "The Merger--Background of the Merger," "The 
Merger--Recommendation of the Rubbermaid Board; Rubbermaid's Reasons for the 
Merger" and "Opinions of Financial Advisors--Opinion of Financial Advisor to 
Rubbermaid" and to the inclusion of the foregoing opinion in the Joint Proxy 
Statement/Prospectus included in the above-mentioned Registration Statement. 
In giving such consent, we do not thereby admit that we come within the 
category of persons whose consent is required under Section 7 of the Securities 
Act of 1933 or the rules and regulations of the Securities and Exchange 
Commission thereunder. 


 
Rubbermaid Incorporated
February 4, 1999
Page Two


Notwithstanding the foregoing, it is understood that our consent is being 
delivered solely in connection with the filing of the above-mentioned version of
the Registration Statement and that our opinion is not to be used, circulated, 
quoted or otherwise referred to for any other purpose, nor is it to be filed 
with, included in or referred to in whole or in part in any other registration 
statement (including any subsequent amendments to the above-mentioned 
Registration Statement), proxy statement or any other document, except in 
accordance with our prior written consent.

Very truly yours,


/s/ Goldman, Sachs & Co.
- ------------------------
(GOLDMAN, SACHS & CO.)



                                      -2-




 
                                                                    Exhibit 99.1
                                                                    ------------


                                  NEWELL CO.
                   Proxy Solicited by the Board of Directors
      for Special Meeting of Stockholders to be held on March 11, 1999
                                        

The undersigned hereby appoints John J. McDonough and William T. Alldredge, and
each of them individually, as proxies, with the powers the undersigned would
possess if personally present, and with full power of substitution, to vote at
the special meeting of stockholders of NEWELL CO. to be held on March 11, 1999,
and at any adjournment or postponement of the special meeting, on the following
proposals:

(1)  The issuance of shares of common stock of Newell in connection with
     Newell's acquisition of Rubbermaid Incorporated (the "Share Issuance
     Proposal").

(2)  The amendment to Newell's certificate of incorporation to change Newell's
     name at the time of the merger to "Newell Rubbermaid Inc." (the "Name
     Change Proposal").

With respect to other matters that properly come before the special meeting or
any adjournment or postponement of the special meeting, which, as of February 5,
1999, the proxies named above do not know are to be presented at the special
meeting, those proxies are authorized to vote upon those matters in their
discretion.

You are encouraged to specify your choices by marking the
 appropriate boxes, SEE
REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. Your shares cannot be voted unless
you sign, date and return this card, or vote your shares by using either of the
electronic means described on the reverse side.


                                                                SEE REVERSE SIDE
 
- --------------------------------------------------------------------------------
(FOLD AND DETACH HERE)


 
     Please mark
 X   your vote as in                                               [CONTROL NO.]
- ---  this example.

When this Proxy is properly executed, the shares to which it relates will be
voted in the manner directed herein. If no direction is made, the shares will be
voted FOR proposals (1) and (2) below.

- --------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR proposal (1) and FOR proposal (2).
================================================================================

                                                     FOR     AGAINST     ABSTAIN
1.   Approval of the Share Issuance Proposal          
                                                     ---       ---         --- 

2.   Approval of the Name Change Proposal
                                                     ---       ---         --- 
- --------------------------------------------------------------------------------

Newell encourages you to take advantage of a new and convenient way by which you
can vote your shares B - electronically, by either telephone or the Internet.

- -    By Telephone. On a touch-tone telephone, call 1-800-OK2-VOTE (1-800-652-
     8683). Listen to the recorded instructions, use the control number printed
     in the box in the upper right corner of this proxy card to access the
     system, and use your telephone key pad to vote.

- -    Over the Internet. Access the World Wide Web site "http://www.vote-by-
     net.com" and follow the instructions posted on the web site.

Your vote by telephone or over the Internet authorizes the proxies named on the
front of this proxy card in the same manner as if you marked, signed, dated and
returned the proxy card. If you choose to vote your shares by either of these
electronic means, there is no need for you to mail back your proxy card. By
signing this proxy card or voting by telephone or over the Internet, you
acknowledge receipt of the Notice of Special Meeting of Stockholders to be held
on March 11, 1999 and the Joint Proxy Statement/Prospectus dated February 5,
1999.

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

NOTE: Please sign exactly as name appears        The signer hereby revokes all
hereon. Joint owners should each sign. When      proxies heretofore given by the
signing as attorney, executor, administrator,    signer to vote at said meeting
or guardian, please give full title as such.     or any adjournments thereof.


- --------------------------------------------------------------------------------
                            (FOLD AND DETACH HERE)
                                        
               [Map setting forth location of Special Meeting.]




 
                                                                    Exhibit 99.2
                                                                    ------------

                          DETACH CARD BEFORE MAILING
                                        
                            RUBBERMAID INCORPORATED
                                        
          Board of Directors Proxy for Special Meeting, March 11, 1999


     The undersigned, having received the Notice of Meeting and Joint Proxy
Statement/Prospectus, hereby makes, constitutes, and appoints Charles A.
Carroll, James A. Morgan and Wolfgang R. Schmitt, and each of them (with full
power of substitution respectively), true and lawful attorneys and proxies for
the undersigned to attend the special meeting of stockholders of Rubbermaid
Incorporated to be held on March 11, 1999, at BankBoston, N.A., 100 Federal
Street, Boston, Massachusetts, and all postponements and adjournments of the
special meeting.

     When this proxy is properly executed, the shares to which it relates will
be voted in the manner directed herein. If no direction is made, the shares will
be voted FOR the proposal.

     You are encouraged to specify your choice by marking the appropriate box
(SEE REVERSE SIDE), but you need not mark any box if you wish to vote in
accordance with the Board of Directors recommendation. Your shares cannot be
voted unless you sign and return this card.

                  CONTINUED AND TO BE SIGNED ON REVERSE SIDE.


 
                                                 ADMISSION TICKET
                                                 Special Meeting of Stockholders

[Rubbermaid
 logo]
RUBBERMAID INCORPORATED
1147 Akron Road
Wooster, Ohio 44691 USA


You are cordially invited to attend the special meeting of stockholders on
Thursday, March 11, 1999, at BankBoston, N.A., 100 Federal Street, Boston,
Massachusetts. The meeting will begin at 11:00 a.m. EDT. Admission is limited to
stockholders, their proxies, and guests of the Company. To avoid delay at the
entrance to the meeting, please present this ticket.

                            PROXY CARD INSTRUCTIONS

Please mark the box on the proxy card to indicate how your shares should be
voted. Sign, date and return your proxy as soon as possible in the enclosed
postage paid envelope. Votes will be tallied by Boston EquiServe, our
transfer agent. Any comments noted on the proxy card or an attachment will be
forwarded by Boston EquiServe to Rubbermaid.

                          DETACH CARD BEFORE MAILING

     Please mark
 X   your vote as in
- ---  this example.

A vote FOR is recommended by the Board of Directors for the following proposal:



                                                FOR     AGAINST     ABSTAIN
                                                                    
1.   Adoption of the merger agreement                                           I plan to attend the special meeting
                                                ---       ---         ---                                                       ---

                                                                                I have made comments on this card or attachment
                                                                                                                                ---

                                                                                Mark here for address change and note at left
                                                                                                                                ---


Note: Please sign exactly as name appears hereon. Joint owners should each
      sign. When signing as attorney, executor, administrator, trustee, or
      guardian, please give full name and title as such.



                                                                     
Signature                             Date          , 1999               Signature                             Date          , 1999
          ---------------------------     ----------                               ---------------------------     ----------


              Please sign this proxy as the name(s) appear above.





 
                                                                    Exhibit 99.3

                      FORM OF CONSENT OF DIRECTOR NOMINEE

The undersigned hereby consents to the inclusion of the information regarding 
the undersigned in this Registration Statement on Form S-4 of Newell Co. (the 
"Company") and any amendment thereto (the "Registration Statement") in 
connection with the undersigned being a director nominee of the Company. The 
undersigned hereby further consents to being named in the Registration Statement
as a director nominee of the Company and that, upon appointment as a director of
the Company in accordance with its by-laws and pursuant to the Agreement and 
Plan of Merger, dated as of October 20, 1998, among the Company, Rubbermaid 
Incorporated and Rooster Company, the undersigned will serve as a director of 
the Company until the undersigned's successor is duly elected and qualified.

                                       /s/ Tom H. Barrett
                                       ---------------------------
                                       Name: 
                                       Date: January 6, 1999






 
                                                                    Exhibit 99.4

                      FORM OF CONSENT OF DIRECTOR NOMINEE

The undersigned hereby consents to the inclusion of the information regarding 
the undersigned in this Registration Statement on Form S-4 of Newell Co. (the 
"Company") and any amendment thereto (the "Registration Statement") in 
connection with the undersigned being a director nominee of the Company. The 
undersigned hereby further consents to being named in the Registration Statement
as a director nominee of the Company and that, upon appointment as a director of
the Company in accordance with its by-laws and pursuant to the Agreement and 
Plan of Merger, dated as of October 20, 1998, among the Company, Rubbermaid 
Incorporated and Rooster Company, the undersigned will serve as a director of 
the Company until the undersigned's successor is duly elected and qualified.

                                       /s/ Scott S. Cowen
                                       ---------------------------
                                       Name: 
                                       Date: January 8, 1999






 
                                                                    Exhibit 99.5

                      FORM OF CONSENT OF DIRECTOR NOMINEE

The undersigned hereby consents to the inclusion of the information regarding 
the undersigned in this Registration Statement on Form S-4 of Newell Co. (the 
"Company") and any amendment thereto (the "Registration Statement") in 
connection with the undersigned being a director nominee of the Company. The 
undersigned hereby further consents to being named in the Registration Statement
as a director nominee of the Company and that, upon appointment as a director of
the Company in accordance with its by-laws and pursuant to the Agreement and 
Plan of Merger, dated as of October 20, 1998, among the Company, Rubbermaid 
Incorporated and Rooster Company, the undersigned will serve as a director of 
the Company until the undersigned's successor is duly elected and qualified.

                                       /s/ Thomas J. Falk
                                       ---------------------------
                                       Name: 
                                       Date: January 6, 1999






 
                                                                    Exhibit 99.6

                      FORM OF CONSENT OF DIRECTOR NOMINEE

The undersigned hereby consents to the inclusion of the information regarding 
the undersigned in this Registration Statement on Form S-4 of Newell Co. (the 
"Company") and any amendment thereto (the "Registration Statement") in 
connection with the undersigned being a director nominee of the Company. The 
undersigned hereby further consents to being named in the Registration Statement
as a director nominee of the Company and that, upon appointment as a director of
the Company in accordance with its by-laws and pursuant to the Agreement and 
Plan of Merger, dated as of October 20, 1998, among the Company, Rubbermaid 
Incorporated and Rooster Company, the undersigned will serve as a director of 
the Company until the undersigned's successor is duly elected and qualified.

                                       /s/ William D. Marohn
                                       ---------------------------
                                       Name: 
                                       Date: January 15, 1999






 
                                                                    Exhibit 99.7

                      FORM OF CONSENT OF DIRECTOR NOMINEE

The undersigned hereby consents to the inclusion of the information regarding 
the undersigned in this Registration Statement on Form S-4 of Newell Co. (the 
"Company") and any amendment thereto (the "Registration Statement") in 
connection with the undersigned being a director nominee of the Company. The 
undersigned hereby further consents to being named in the Registration Statement
as a director nominee of the Company and that, upon appointment as a director of
the Company in accordance with its by-laws and pursuant to the Agreement and 
Plan of Merger, dated as of October 20, 1998, among the Company, Rubbermaid 
Incorporated and Rooster Company, the undersigned will serve as a director of 
the Company until the undersigned's successor is duly elected and qualified.

                                       /s/ Wolfgang R. Schmitt
                                       ---------------------------
                                       Name: 
                                       Date: January 15, 1999






 
                                                                    Exhibit 99.8

                      FORM OF CONSENT OF DIRECTOR NOMINEE

The undersigned hereby consents to the inclusion of the information regarding 
the undersigned in this Registration Statement on Form S-4 of Newell Co. (the 
"Company") and any amendment thereto (the "Registration Statement") in 
connection with the undersigned being a director nominee of the Company. The 
undersigned hereby further consents to being named in the Registration Statement
as a director nominee of the Company and that, upon appointment as a director of
the Company in accordance with its by-laws and pursuant to the Agreement and 
Plan of Merger, dated as of October 20, 1998, among the Company, Rubbermaid 
Incorporated and Rooster Company, the undersigned will serve as a director of 
the Company until the undersigned's successor is duly elected and qualified.

                                       /s/ Gordon R. Sullivan
                                       ---------------------------
                                       Name: 
                                       Date: January 1, 1999