CORNING CONSUMER PRODUCTS CO
S-4, 1998-06-18
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<PAGE>
     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 18, 1998
                                                      REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                           --------------------------
 
                                    FORM S-4
 
                             REGISTRATION STATEMENT
 
                                     UNDER
 
                           THE SECURITIES ACT OF 1933
                           --------------------------
 
                       CORNING CONSUMER PRODUCTS COMPANY
 
             (Exact Name of Registrant as Specified in Its Charter)
 
<TABLE>
<S>                              <C>                            <C>
           DELAWARE                          3329                  16-1403318
 (State or other jurisdiction    (Primary Standard Industrial   (I.R.S. Employer
              of                 Classification Code Number)     Identification
incorporation or organization)                                      Number)
</TABLE>
 
                           --------------------------
 
                           E-BUILDING, HOUGHTON PARK
                            CORNING, NEW YORK 14831
                                 (607) 974-8605
 
         (Address, including zip code, and telephone number, including
            area code, of registrant's principal executive offices)
                           --------------------------
 
                           E-BUILDING, HOUGHTON PARK
                            CORNING, NEW YORK 14831
                                 (607) 974-8605
 
 (Name, address, including zip code, and telephone number, including area code,
                             of agent for service)
 
                           --------------------------
 
                                WITH A COPY TO:
 
                            ARTHUR D. ROBINSON, ESQ.
                           SIMPSON THACHER & BARTLETT
                              425 LEXINGTON AVENUE
                            NEW YORK, NEW YORK 10017
                                 (212) 455-2000
 
                           --------------------------
 
    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
 
    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 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
Registration Statement number of the earlier effective Registration Statement
for the same offering: / /
 
                           --------------------------
 
                        CALCULATION OF REGISTRATION FEE
 
<TABLE>
<CAPTION>
                                                            PROPOSED MAXIMUM    PROPOSED MAXIMUM
       TITLE OF EACH CLASS OF              AMOUNT TO         OFFERING PRICE        AGGREGATE           AMOUNT OF
     SECURITIES TO BE REGISTERED         BE REGISTERED          PER NOTE       OFFERING PRICE(1)    REGISTRATION FEE
<S>                                    <C>                 <C>                 <C>                 <C>
9 5/8% Series B Senior Subordinated
  Notes due 2008.....................     $200,000,000            100%            $200,000,000         $59,000.00
</TABLE>
 
(1) Estimated solely for the purpose of calculating the registration fee.
 
                           --------------------------
 
    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, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO CHANGE, COMPLETION OR AMENDMENT
WITHOUT NOTICE. THIS PRELIMINARY OFFERING MEMORANDUM SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE
OF THESE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR
SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE
SECURITIES LAWS OF ANY SUCH JURISDICTION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED BEFORE THE OFFERING MEMORANDUM IS DELIVERED IN
FINAL FORM.
<PAGE>
PROSPECTUS
 
CORNING CONSUMER PRODUCTS COMPANY
 
OFFER TO EXCHANGE UP TO $200,000,000 OF ITS
9 5/8% SERIES B SENIOR SUBORDINATED NOTES DUE 2008
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT,
FOR ANY AND ALL OF ITS OUTSTANDING
9 5/8% SENIOR SUBORDINATED NOTES DUE 2008
 
Corning Consumer Products Company (the "Company"), hereby offers, upon the terms
and subject to the conditions set forth in this Prospectus and the accompanying
Letter of Transmittal (which together constitute the "Exchange Offer"), to
exchange an aggregate of up to $200,000,000 principal amount of 9 5/8% Series B
Senior Subordinated Notes due 2008 (the "Exchange Notes") of the Company for an
identical face amount of the issued and outstanding 9 5/8% Senior Subordinated
Notes due 2008 (the "Old Notes", and together with the Exchange Notes, the
"Notes") of the Company from the holders thereof. As of the date of this
Prospectus, there is $200,000,000 aggregate principal amount of the Old Notes
outstanding. The terms of the Exchange Notes are identical in all material
respects to the Old Notes, except that the Exchange Notes have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), and
therefore will not bear legends restricting their transfer and will not contain
certain provisions providing for an increase in the interest rate on the Old
Notes under certain circumstances described in the Registration Rights Agreement
(as defined), which provisions will terminate as to all of the Notes upon the
consummation of the Exchange Offer.
 
Interest on the Exchange Notes will be payable semi-annually on May 1 and
November 1 of each year, commencing on November 1, 1998. The Exchange Notes will
mature on May 1, 2008. Except as described below, the Company may not redeem the
Exchange Notes prior to May 1, 2003. On or after such date, the Company may
redeem the Exchange Notes, in whole or in part, at the redemption prices set
forth herein, together with accrued and unpaid interest, if any, to the date of
redemption. In addition, at any time on or prior to May 1, 2001, the Company may
redeem up to 35% of the original aggregate principal amount of the Exchange
Notes with the net proceeds of one or more Equity Offerings (as defined), at a
price equal to 109.625% of the aggregate principal amount to be redeemed,
together with accrued and unpaid interest, if any, to the date of redemption;
provided that at least 65% of the original aggregate principal amount of the
Exchange Notes remains outstanding immediately after each such redemption. The
Exchange Notes will not be subject to any sinking fund requirement. Upon the
occurrence of a Change of Control (as defined), the Company will have the
option, at any time prior to May 1, 2003, to redeem the Exchange Notes, in whole
but not in part, at a redemption price equal to 100% of the principal amount
thereof plus the Applicable Premium (as defined), together with accrued and
unpaid interest, if any, to the date of redemption. Upon the occurrence of a
Change of Control, if the Company does not so redeem the Exchange Notes or if a
Change of Control occurs on or after May 1, 2003, the Company will be required
to make an offer to purchase the Exchange Notes at a price equal to 101% of the
original aggregate principal amount thereof, together with accrued and unpaid
interest, if any, to the date of purchase. See "Description of the Exchange
Notes."
 
The Exchange Notes will be unsecured, will be subordinated in right of payment
to all existing and future Senior Indebtedness (as defined) of the Company and
will be effectively subordinated to all obligations of the subsidiaries of the
Company. The Exchange Notes will rank PARI PASSU with any future Senior
Subordinated Indebtedness (as defined) of the Company and will rank senior to
all Subordinated Indebtedness (as defined) of the Company. The Indenture (as
defined) permits the Company to incur additional indebtedness, including up to
$278.4 million of Senior Indebtedness under the Credit Facilities (as defined),
subject to certain limitations. See "Description of the Exchange Notes." As of
March 31, 1998, on a pro forma basis after giving effect to the Transactions (as
defined), the aggregate amount of the Company's outstanding Senior Indebtedness
would have been approximately $271.6 million (excluding unused commitments), all
of which would have been secured indebtedness, and the Company would have had no
Senior Subordinated Indebtedness outstanding other than the Notes. As of March
31, 1998, after giving pro forma effect to the Transactions, the Company's
subsidiaries would have had total liabilities of $117.4 million (excluding
guarantees in respect of the Credit Facilities). See "Unaudited Pro Forma
Financial Information", "Risk Factors--Adverse Consequences of Holding Company
Structure" and "--Subordination."
 
The Old Notes were issued and sold on May 5, 1998 in a transaction not
registered under the Securities Act in reliance upon an exemption from the
registration requirements thereof. In general, the Old Notes may not be offered
or sold unless registered under the Securities Act, except pursuant to an
exemption from, or in a transaction not subject to, the Securities Act. The
Exchange Notes are being offered hereby in order to satisfy certain obligations
of the Company contained in the Registration Rights Agreement. Based on
interpretations by the staff of the Securities and Exchange Commission (the
"Commission") set forth in no-action letters issued to third parties, the
Company believes that the Exchange Notes issued pursuant to the Exchange Offer
in exchange for Old Notes may be offered for resale, resold or otherwise
transferred by any holder thereof (other than any such holder that is an
"affiliate" of the Company within the meaning of Rule 405 promulgated under the
Securities Act) without compliance with the registration and prospectus delivery
provisions of the Securities Act, PROVIDED that such Exchange Notes are acquired
in the ordinary course of such holder's business, such holder has no arrangement
with any person to participate in the distribution of such Exchange Notes and
neither such holder nor any such other person is engaging in or intends to
engage in a distribution of such Exchange Notes. However, the Company has not
sought, and does not intend to seek, its own no-action letter, and there can be
no assurance that the staff of the Commission would make a similar determination
with respect to the Exchange Offer. Notwithstanding the foregoing, each
broker-dealer that receives Exchange Notes for its own account pursuant to the
Exchange Offer must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. The Letter of Transmittal states that by
so acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act. This Prospectus, as it may be amended or supplemented from time to time,
may be used by a broker-dealer in connection with any resale of Exchange Notes
received in exchange for such Old Notes where such Old Notes were acquired by
such broker-dealer as a result of market-making activities or other trading
activities (other than Old Notes acquired directly from the Company). A
broker-dealer may not participate in the Exchange Offer with respect to Old
Notes acquired other than as a result of market-making activities or other
trading activities. The Company has agreed that, for a period of 90 days after
the date of this Prospectus, it will make this Prospectus available to any
broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
 
The Old Notes are designated for trading in the Private Offerings, Resales and
Trading through Automated Linkages ("PORTAL") market. There is no established
trading market for the Exchange Notes. The Company currently does not intend to
list the Exchange Notes on any securities exchange or to seek approval for
quotation of the Exchange Notes through any automated quotation system.
Accordingly, there can be no assurance as to the development or liquidity of any
market for the Exchange Notes.
 
The Exchange Offer is not conditioned upon any minimum aggregate principal
amount of Old Notes being tendered for exchange. The date of acceptance and
exchange of the Old Notes (the "Exchange Date") will be the third business day
following the Expiration Date. Old Notes tendered pursuant to the Exchange Offer
may be withdrawn at any time prior to the Expiration Date. The Company will not
receive any proceeds from the Exchange Offer. The Company will pay all of the
expenses incident to the Exchange Offer. The Exchange Offer will expire 5:00
p.m., New York City Time, on              , 1998 (the "Expiration Date"). The
Company does not currently intend to extend the Expiration Date.
- --------------------------------------------------------------------------------
 
SEE "RISK FACTORS" BEGINNING ON PAGE 16 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED IN CONNECTION WITH THE EXCHANGE OFFER AND AN INVESTMENT IN
THE EXCHANGE NOTES.
 ------------------------------------------------------------------------------
 
THE EXCHANGE NOTES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION OR
ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
 
                THE DATE OF THIS PROSPECTUS IS           , 1998
<PAGE>
                             AVAILABLE INFORMATION
 
    The Company has filed with the Commission a Registration Statement on Form
S-4 (together with all amendments, exhibits, schedules and supplements thereto,
the "Registration Statement") under the Securities Act with respect to the
Exchange Notes being offered hereby. This Prospectus, which forms a part of the
Registration Statement, does not contain all of the information set forth in the
Registration Statement. For further information with respect to the Company and
the Exchange Notes, reference is made to the Registration Statement. Statements
contained in this Prospectus as to the contents of any contract or other
document are not necessarily complete, and, where such contract or other
document is an exhibit to the Registration Statement, each such statement is
qualified in all respects by the provisions in such exhibit, to which reference
is hereby made. The Company is not currently subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Upon completion of the Exchange Offer, the Company will be subject to the
information requirements of the Exchange Act and, in accordance therewith, will
file periodic reports and other information with the Commission. The
Registration Statement, such reports and other information can be inspected and
copied at the Public Reference Section of the Commission located at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C. 20549 and at regional
public reference facilities maintained by the Commission located at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and Seven
World Trade Center, Suite 1300, New York, New York 10048. Copies of such
material, including copies of all or any portion of the Registration Statement,
can be obtained from the Public Reference Section of the Commission at
prescribed rates. Such material may also be accessed electronically by means of
the Commission's home page on the Internet (http://www.sec.gov). In addition,
pursuant to the Indenture covering Old Notes and the Exchange Notes, the Company
has agreed to file with the Commission and provide to the Holders the annual
reports and the information, documents and other reports otherwise required
pursuant to Section 13 of the Exchange Act. Such requirements may be satisfied
through the filing and provision of such documents and reports which would
otherwise be required pursuant to Section 13 in respect of the Company.
 
    UNTIL             , 1998 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
 
                            ------------------------
 
                                       i
<PAGE>
             CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR"
       PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
 
    THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 PROVIDES A "SAFE
HARBOR" FOR CERTAIN FORWARD-LOOKING STATEMENTS. THE FACTORS DISCUSSED UNDER
"RISK FACTORS," AMONG OTHERS, COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM FORWARD-LOOKING STATEMENTS MADE IN THIS PROSPECTUS, INCLUDING, WITHOUT
LIMITATION, IN "BUSINESS" AND "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS," IN THE COMPANY'S PRESS RELEASES AND IN
ORAL STATEMENTS MADE BY AUTHORIZED OFFICERS OF THE COMPANY. WHEN USED IN THIS
PROSPECTUS, THE WORDS "ESTIMATE," "PROJECT," "ANTICIPATE," "EXPECT," "INTEND,"
"BELIEVE" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS. ALL OF THESE FORWARD-LOOKING STATEMENTS ARE BASED ON ESTIMATES AND
ASSUMPTIONS MADE BY MANAGEMENT OF THE COMPANY, WHICH, ALTHOUGH BELIEVED TO BE
REASONABLE, ARE INHERENTLY UNCERTAIN. THEREFORE, UNDUE RELIANCE SHOULD NOT BE
PLACED UPON SUCH ESTIMATES AND STATEMENTS. NO ASSURANCE CAN BE GIVEN THAT ANY OF
SUCH STATEMENTS OR ESTIMATES WILL BE REALIZED AND ACTUAL RESULTS WILL DIFFER
FROM THOSE CONTEMPLATED BY SUCH FORWARD-LOOKING STATEMENTS. SEE "RISK
FACTORS--FORWARD-LOOKING STATEMENTS."
                            ------------------------
 
    CORELLE-Registered Trademark-, REVERE WARE-Registered Trademark-, AND
VISIONS-Registered Trademark- ARE REGISTERED TRADEMARKS OF THE COMPANY. THE
COMPANY LICENSES THE CORNING WARE-Registered Trademark-,
PYROCERAM-Registered Trademark- AND PYREX-Registered Trademark- TRADEMARKS FROM
CORNING.
 
                                       ii
<PAGE>
                                    SUMMARY
 
    THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ IN
CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND CONSOLIDATED FINANCIAL
STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE IN THIS PROSPECTUS. UNLESS THE
CONTEXT OTHERWISE REQUIRES, REFERENCES TO THE "COMPANY" ARE REFERENCES TO
CORNING CONSUMER PRODUCTS COMPANY (AND, WHERE APPLICABLE, ITS PREDECESSORS,
INCLUDING THE UNINCORPORATED CONSUMER PRODUCTS BUSINESS OF CORNING) AND ITS
SUBSIDIARIES. THE COMPANY'S FISCAL YEAR IS THE CALENDAR YEAR. UNLESS OTHERWISE
INDICATED, INFORMATION PRESENTED ON A PRO FORMA BASIS GIVES EFFECT TO THE
TRANSACTIONS.
 
                                  THE COMPANY
 
GENERAL
 
    Corning Consumer Products Company, a business founded in 1915, is a leading
manufacturer and marketer of oven/bakeware ("bakeware"), dinnerware and rangetop
cookware. The Company believes that its brands, including Corning
Ware-Registered Trademark-, Pyrex-Registered Trademark-,
Corelle-Registered Trademark-, Revere Ware-Registered Trademark- and
Visions-Registered Trademark-, constitute one of the broadest and best
recognized collection of brands in the U.S. housewares industry. The Company has
leading positions in major channels of distribution for such products in the
United States and has also achieved a significant presence in certain
international markets, primarily Canada, Asia, Australia and Latin America. In
1997, on a pro forma basis after giving effect to the Transactions, the Company
recorded net sales, operating income and EBITDA (as defined) of $572.9 million,
$54.0 million and $89.7 million, respectively. For the three months ended March
31, 1998, on a pro forma basis after giving effect to the Transactions, the
Company recorded net sales, operating income and EBITDA of $116.5 million, $2.1
million and $11.1 million, respectively. In 1997, approximately 75% of the
Company's net sales were generated domestically and approximately 25%
internationally.
 
    The Company's Corning Ware-Registered Trademark- and
Pyrex-Registered Trademark- products represent the two largest glass-ceramic and
glass bakeware brands (measured in dollar sales) in the United States, with
approximately 67% of all glass-ceramic and glass bakeware sales (and
approximately 29% of total bakeware sales) in 1997. The Company believes that
its Corelle-Registered Trademark- brand is the nation's largest selling
dinnerware brand in the mass merchant channel, with approximately 38% of mass
merchant dinnerware sales in 1997, over two times the sales of the next largest
mass merchant dinnerware competitor. The Company's core rangetop cookware brand,
Revere Ware-Registered Trademark-, is one of the nation's leading stainless
steel rangetop cookware brands, accounting for approximately 29% of stainless
steel rangetop cookware sales and 7% of total rangetop cookware sales among mass
merchant and department store customers in 1997.
 
    Prior to the Recapitalization, the Company was a wholly owned subsidiary of
Corning Incorporated ("Corning"). On March 2, 1998, the Company, Corning,
Borden, Inc. ("Borden") and CCPC Acquisition Corp. ("CCPC Acquisition") entered
into the Recapitalization Agreement (as amended, the "Recapitalization
Agreement") pursuant to which on April 1, 1998 (the "Closing Date") CCPC
Acquisition acquired 92% of the outstanding shares of common stock, par value
$0.01 per share (the "Common Stock"), of the Company from Corning for $110.4
million (the "Stock Acquisition") and the Company paid a cash dividend to
Corning of $472.6 million (the "Cash Dividend"). The Stock Acquisition was
financed by an equity investment in CCPC Acquisition by BW Holdings LLC, an
affiliate of Kohlberg Kravis Roberts & Co., L.P. ("KKR") and the parent company
of Borden and CCPC Acquisition ("BW Holdings"). Under the 1998 Corning Consumer
Products Company Stock Purchase and Option Plan (the "1998 Plan"), CCPC
Acquisition is currently in the process of selling shares of Common Stock, and
the Company is making grants of options to purchase Common Stock, to certain
members of management of the Company, which will represent 12.4% of the fully
diluted Common Stock.
 
                                       1
<PAGE>
U.S. HOUSEWARES INDUSTRY
 
    According to management estimates, total retail sales in the U.S. housewares
industry were approximately $19.2 billion in 1997. The categories of the
housewares industry in which the Company's products compete--bakeware,
dinnerware and rangetop cookware--generated an estimated $4.3 billion in total
retail sales in 1997 compared to $4.1 billion in 1996. Retail sales in the U.S.
of bakeware, dinnerware and rangetop cookware have all exhibited a stable growth
pattern over the last ten years with growth in these segments linked to the rate
of household formations and gross domestic product growth. In the United States,
bakeware, dinnerware and rangetop cookware products are sold through three
primary channels, mass merchants (large national or regional discounters, such
as K-Mart), department stores and specialty retailers (full service retailers
providing a broad assortment in their specialty retail category, such as Bed
Bath & Beyond and Home Place), as well as through other channels, including
outlet stores, retail food stores, catalog showrooms and direct mail.
 
    BAKEWARE.  Total U.S. retail bakeware sales are estimated to have been $800
million in 1997. During this period, metal products and glass and glass-ceramic
products each represented an estimated 50% of U.S. retail bakeware sales. The
Company's bakeware sales are generated primarily from glass-ceramic and glass
products sold under the Corning Ware-Registered Trademark- and
Pyrex-Registered Trademark- brand names. The mass merchant channel is the
largest single channel for bakeware, accounting for an estimated 37% of domestic
retail bakeware sales in 1997.
 
    DINNERWARE.  Total U.S. retail dinnerware sales are estimated to have been
$1.7 billion in 1997. The Company's Corelle-Registered Trademark- glass
dinnerware products are sold as "everyday" products. "Everyday" dinnerware
products, which include glass, stoneware and plastic products, represented an
estimated 56% of domestic retail dinnerware sales in 1997. The mass merchant
channel is the largest channel for everyday dinnerware, accounting for an
estimated 33% of U.S. retail dinnerware sales in 1997.
 
    RANGETOP COOKWARE.  Total U.S. retail rangetop cookware sales are estimated
to have been $1.8 billion in 1997. Aluminum, which has been growing in
popularity due to the ease of cleaning and increased durability of non-stick
coatings, is the leading material for rangetop cookware (the other primary
material being stainless steel) and accounted for approximately 70% of U.S.
retail rangetop cookware sales in mass merchant and department store channels in
1997. The Company's rangetop cookware sales are generated primarily from
stainless steel products sold under the Revere Ware-Registered Trademark- brand
name and glass-ceramic products sold under the Visions-Registered Trademark-
brand name. To meet growing consumer demand, the Company introduced three full
lines of Revere Ware-Registered Trademark- non-stick aluminum products in 1998
to complement the Company's sales of individual items of non-stick rangetop
cookware. The mass merchant channel is the largest distribution channel in this
category, accounting for an estimated 45% of retail domestic rangetop cookware
sales in 1997.
 
COMPETITIVE STRENGTHS
 
    The Company attributes its leadership in bakeware, dinnerware and stainless
steel rangetop cookware to the following competitive strengths:
 
    LEADING BRAND NAMES.  The Corning Ware-Registered Trademark-,
Pyrex-Registered Trademark-, Corelle-Registered Trademark-, Revere
Ware-Registered Trademark- and Visions-Registered Trademark- brands have
consistently been among the leaders in brand awareness and household penetration
in the respective product categories in which they compete in the United States.
The Company believes that this brand strength and household penetration results
from consumer experience with the high quality, durability and functionality of
the Company's products.
 
                                       2
<PAGE>
                             BRAND CHARACTERISTICS
 
<TABLE>
<CAPTION>
                                                           TOTAL
BRAND                                                  AWARENESS(A)      HOUSEHOLD PENETRATION(B)
- ---------------------------------------------------  -----------------  ---------------------------
<S>                                                  <C>                <C>
Corning Ware-Registered Trademark-.................             98%                     82%
Pyrex-Registered Trademark-........................             93%                     73%
Corelle-Registered Trademark-......................             91%                     51%
Revere Ware-Registered Trademark-..................             81%                     36%
Visions-Registered Trademark-......................             87%                     33%
</TABLE>
 
- ------------------------
 
(a) Based on surveys conducted in 1997 of female heads of households by market
    research firms using aided and unaided techniques.
 
(b) The percentage of the respondents aware of the applicable brand who
    currently own a product of the applicable brand.
 
    BROAD DISTRIBUTION IN U.S. CHANNELS.  The Company sells its products in the
United States to most major U.S. mass merchant retailers and a broad array of
department stores, specialty retailers and retail food stores, as well as
through its outlet stores and other channels. The strength of the Company's
brand names and its presence in several houseware categories make the Company a
significant supplier to, and enhance the Company's relationship with, its
retailer customers. In 1997, approximately 32% of the Company's U.S. gross sales
(before deductions for trade allowances, customer-paid freight and discounts)
were generated through the mass merchant channel, approximately 34% were
generated by Company-operated outlet stores and approximately 34% were generated
by other domestic channels, including department stores, specialty retailers and
retail food stores. The Company's outlet stores carry an extensive range of the
Company's products and provide the Company with an additional distribution
channel, which allows the Company to profitably sell slower-moving inventory.
The Company believes that its outlet stores, which also sell complementary
kitchen accessories, have developed marketing and pricing strategies that
generate sales which supplement, rather than compete with, its retailer
customers. The broad distribution of the Company's products through the mass
merchant, department store and specialty retailer channels, together with the
sales made through the Company's outlet stores, reduces the Company's dependence
on any one channel of distribution.
 
    EMPHASIS ON NEW PRODUCT DEVELOPMENT.  Products introduced in 1996 and 1997
generated approximately 24% of the Company's 1997 gross sales. New products
include: (i) products introduced into new categories or serving new functions to
meet consumer needs not met by the Company's existing products; (ii) product
line extensions, which generally include manufacturing changes to existing
product lines such as glass color or shape changes and (iii) product renewals,
which generally include decorative changes to existing product lines such as
pattern changes. The Company's product development process incorporates
extensive use of qualitative and quantitative research and enhances the
Company's ability to (i) focus resources on projects with high market potential,
(ii) bring new products to market quickly and (iii) extend existing product
categories. For example, Pyrex Portables-Registered Trademark-
(Pyrex-Registered Trademark- branded portable food containers) went from concept
to national distribution in only 11 months and generated over $33 million in
gross sales in 1996, the first full calendar year after its introduction. In
addition, the Company launched three full lines of Revere
Ware-Registered Trademark- aluminum non-stick cookware in 1998 within nine
months of commencing product development. Another new product for 1998 currently
being shipped by the Company to major retailers is Corning
Ware-Registered Trademark- Pop-Ins-TM-, a line of products designed for storing,
serving and reheating meals either at home or away from home that leverages the
Company's traditional strength in cooking/serving containers.
 
    HIGH QUALITY MANUFACTURING PROCESSES.  The Company's manufacturing processes
enable the Company to produce products with performance and cost characteristics
that appeal to consumers. The Company believes it is recognized as one of the
highest quality manufacturers of bakeware, dinnerware
 
                                       3
<PAGE>
and rangetop cookware products and has instituted a process for pursuing
continuous quality improvement throughout its manufacturing organization. All of
the Company's four domestic manufacturing facilities are ISO 9002 certified.
 
    SIGNIFICANT PRESENCE IN INTERNATIONAL MARKETS.  The Company's products are
sold in over 30 foreign countries, primarily in North America, Asia and Latin
America, with established positions in Canada, Korea, Australia, Japan,
Singapore, Taiwan, Hong Kong, Mexico and Brazil. The Company operates a
decorating facility in Malaysia and packaging and distribution facilities in
Canada, Singapore, Australia and Brazil. In Europe, Russia, the Middle East and
Africa, the Company's products are sold through a distribution agreement (which
accounted for less than 2% of net sales in 1997 and first quarter 1998) with
Newell Co. ("Newell") that was entered into when the Company sold its consumer
products business in those territories to Newell in November 1994.
 
    PROVEN MANAGEMENT TEAM.  In the spring of 1996, a new management team,
headed by chief executive officer Peter F. Campanella, implemented a
comprehensive program to refocus and redesign the operations and objectives of
the Company. Key members of management with operational responsibility,
including Mr. Campanella, have remained with the Company following the
Recapitalization. In addition, Borden will provide management, consulting and
financial services to the Company pursuant to an agreement entered into between
the Company and Borden in connection with the Recapitalization. See "Certain
Relationships and Related Party Transactions--Between Borden and the Company."
In addition, five individuals who are senior executives of Borden are members of
the nine person Board of Directors of the Company.
 
BUSINESS STRATEGY
 
    In the second quarter of 1996, the Company began implementing a two-phase
program to redesign the operations and objectives of the Company (the "Business
Redesign Program") to, first, streamline the Company's business to focus on
profitable products and customers while reducing the Company's cost structure
and, second, adopt initiatives to increase sales while maintaining and improving
upon the cost efficiencies achieved in the first phase of the Business Redesign
Program. The first phase of the Business Redesign Program, which is largely
complete, focused on eliminating low volume, low profit products and customers,
reducing manufacturing costs and reducing selling, general, administrative and
research and development expenses ("SG&A"). From 1995 to 1997, the first phase
of the Business Redesign Program resulted in improvements in gross margin from
29% to 34% and operating margin from (2)% to 6%. The first phase of the Business
Redesign Program has included the following initiatives:
 
    FOCUS ON PROFITABLE PRODUCTS AND CUSTOMERS.  The Company has refocused its
sales efforts on higher margin products and profitable customer accounts while
continuing to actively manage its product assortment and customer base. To
eliminate low volume, low profit products, the Company has instituted a process
of continually evaluating the profitability of its individual products ("stock
keeping units" or "SKUs"). This process includes examining volume, gross and
operating profit and inventory carrying costs. As a result of this process, the
number of SKUs distributed by the Company has been reduced by 55%, from 3,088 at
the end of 1995 to 1,403 at December 31, 1997. In addition, based on analyses of
customer account profitability, the number of customers directly served by the
Company has been reduced by 43%, from approximately 1,048 at the end of 1995, to
approximately 599 at December 31, 1997. The discontinued accounts were generally
low volume customers, many of which were transferred to distributors.
 
    REDUCE MANUFACTURING COSTS.  From 1995 to 1997, the Company implemented
systematic productivity improvements which concentrated on reducing labor,
materials and overhead costs primarily through (i) process simplification, (ii)
better process control and discipline, (iii) workforce productivity improvements
and (iv) improved raw material sourcing. As a result of implementing the
foregoing, the
 
                                       4
<PAGE>
Company has been able to reduce the number of manufacturing employees by 26%,
from 2,629 at the end of 1995 to 1,955 at December 31, 1997.
 
    REDUCE SG&A COSTS.  The Company has reduced its SG&A expenses by $30.9
million from 1995 to 1997. These reductions were realized primarily through the
redesign of sales and administrative functions and the refocus of the Company's
advertising program on print rather than media advertising as part of the
Business Redesign Program. As a result of these initiatives, the number of SG&A
employees was reduced from 1,284 in 1995 to 1,141 in 1997 and SG&A expenses
(excluding those estimated by management to be attributable to Company-operated
outlet stores) declined from 21.9% of 1995 gross sales to 16.5% of 1997 gross
sales.
 
    IMPROVE CUSTOMER SERVICE.  To improve customer service, the Company has
reorganized its sales force to better align account representatives with
specific customers' needs and has implemented an integrated supply chain
management process which utilizes enhanced information systems to predict
customers' future inventory requirements and permit the Company to maintain a
more efficient allocation between finished goods and work-in-process inventory.
The Company's supply chain management process also enables the Company to
improve the accuracy and timeliness of filling customer orders and is intended
to allow the Company and its customers to reduce finished goods inventory. Since
the end of 1995, the Company's average on-time delivery rate has improved from
approximately 75% to approximately 95% as of December 31, 1997.
 
    With many of the objectives of the first phase of the Business Redesign
Program achieved, the Company has recently begun the second phase of the
Business Redesign Program by pursuing the following strategies:
 
    FOCUS ON STRATEGIC ACCOUNTS.  The Company intends to continue to focus on a
core group of strategic accounts identified during the first phase of the
Business Redesign Program based on their profitability, significant sales
volumes for multiple Company brands, commitment to active merchandising of
national brands and potential for growth. For each strategic account, the
Company has established a team of management, marketing and sales resources
dedicated to developing and executing a strategy to improve customer service and
increase sales to that account. Management believes that the Company's focus on
strategic accounts will improve sales by increasing shelf space at key retailers
while enhancing its brand image and presence.
 
    INTRODUCE NEW PRODUCTS THAT BUILD ON EXISTING BRANDS.  The Company's new
product strategy capitalizes on the Company's strong brand names, broad
distribution and technical expertise to introduce and market products that offer
enhanced value to consumers through new design or new functionality. The Company
plans to accelerate the development of products that extend existing categories
or enter into new categories in order to gain incremental retail shelf space and
preserve sales of existing products. The Company's objective is to generate at
least 20% of its gross sales from products introduced in the two prior years
(including product line extensions and renewals). Management believes that the
new products the Company plans to introduce in the second half of 1998 and in
1999 will increase its shelf space at key retailers.
 
    EXPAND IN INTERNATIONAL MARKETS.  The Company has made, and will continue to
make, investments in localized marketing programs and distribution and sales
capabilities in international markets. As a result, the Company is an
established supplier of bakeware and dinnerware in a number of international
markets, including Canada, Korea, Australia, Japan, Singapore, Taiwan, Hong
Kong, Mexico and Brazil. The Company believes that demand in these markets has
been driven in large part by: (i) the expansion of the middle class in many
developing countries; (ii) a strong desire for U.S. branded goods by the
emerging middle class; and (iii) the expansion of western style merchandisers in
many of these regions. Despite recent economic disruptions in Asia, the Company
believes international markets, including Asia over the long term, represent
potential growth areas for the Company.
 
                                       5
<PAGE>
    CONTINUE TO IMPLEMENT COST REDUCTION INITIATIVES.  The Company intends to
actively pursue opportunities to achieve further cost reductions in its
manufacturing operations through additional productivity improvements and
streamlining of manufacturing processes. The Company also intends to maintain or
lower SG&A as a percentage of net sales while pursuing its strategy of sales
growth through a renewed focus on strategic accounts, international expansion
and product introductions.
 
    SELECTIVELY PURSUE ACQUISITIONS.  The Company plans to selectively pursue
acquisitions which complement its business strategies. The Company believes
that, by taking advantage of its strong brand names, global sales capabilities
and retail store network, the Company can expand distribution of acquired
product lines.
 
                                THE TRANSACTIONS
 
    On March 2, 1998, Corning, Borden, the Company and CCPC Acquisition entered
into the Recapitalization Agreement, pursuant to which on April 1, 1998 CCPC
Acquisition acquired 92.0% of the outstanding shares of Common Stock of the
Company from Corning for $110.4 million. The Stock Acquisition was financed by
an equity investment in CCPC Acquisition by BW Holdings, an affiliate of KKR and
the parent company of Borden and CCPC Acquisition. BW Holdings financed such
investment from cash on hand. Pursuant to the Recapitalization Agreement, on the
Closing Date prior to the consummation of the Stock Acquisition, the Company
paid the Cash Dividend to Corning of $472.6 million. The amount of the Cash
Dividend is subject to post-closing adjustment based on the Company's net worth
and outstanding indebtedness on the Closing Date. See "The Recapitalization." As
a result of the Recapitalization, Corning continues to hold 8.0% of the
outstanding shares of Common Stock.
 
    The Cash Dividend, together with transaction and financing fees and expenses
of $8.0 million paid to Borden for the Recapitalization, approximately $17.0
million to pay other fees and expenses incurred in connection with the
Transactions and approximately $4.0 million of cash for operations, was financed
by the Company through (i) the issuance and sale to CCPC Acquisition of
1,200,000 shares of the Company's Junior Cumulative Pay-In-Kind Preferred Stock
(the "Junior Preferred Stock") for $30.0 million, which was contributed to CCPC
Acquisition by BW Holdings from its cash on hand and (ii) a $471.6 million
interim subordinated loan from Borden and BW Holdings (the "Interim Financing").
A portion of the Interim Financing was refinanced on April 9, 1998 with an
aggregate of approximately $259.6 million of bank borrowings by the Company,
including $200.0 million of senior secured term loans (the "Term Loans") and
$59.6 million of borrowings under a $275.0 million senior secured revolving
credit facility (the "Revolving Credit Facility;" together with the Term Loans,
the "Credit Facilities"). The remainder of the Interim Financing was refinanced
by the Old Notes, available cash and additional borrowings of approximately
$12.0 million under the Revolving Credit Facility. The Stock Acquisition, the
Cash Dividend and the Interim Financing are collectively referred to herein as
the "Recapitalization." The Offering of the Old Notes and borrowings under the
Credit Facilities together with the application of the proceeds therefrom are
collectively referred to herein as the "Refinancing." As part of the
Refinancing, the Company is in the process of contributing substantially all of
its operations, assets and liabilities (other than obligations in respect of the
Notes and the Credit Facilities) to its subsidiaries. The Recapitalization and
the Refinancing are collectively referred to herein as the "Transactions."
 
    Under the 1998 Plan, CCPC Acquisition is currently in the process of selling
shares of Common Stock, and the Company is making grants of options to purchase
Common Stock, to certain members of management of the Company. In the aggregate,
the sales of shares of Common Stock by CCPC Acquisition and the option grants by
the Company will represent approximately 12.4% of the Company's fully diluted
Common Stock.
 
                                       6
<PAGE>
    The actual sources and uses of the funds for the Recapitalization were as
follows:
<TABLE>
<CAPTION>
                                                                               (DOLLARS IN
SOURCES                                                                         MILLIONS)
- -------------------------------------------------------------------------  -------------------
<S>                                                                        <C>
Interim Financing........................................................       $   471.6
Preferred Stock..........................................................            30.0
Corning Retained Common Equity(1)........................................             9.6
CCPC Acquisition Common Equity...........................................           110.4
                                                                                  -------
      Total sources of funds.............................................       $   621.6
                                                                                  -------
                                                                                  -------
 
<CAPTION>
 
USES
- -------------------------------------------------------------------------
<S>                                                                        <C>
Stock Acquisition........................................................       $   110.4
Cash Dividend............................................................           472.6
Transactions fees and expenses...........................................             8.0
Corning Retained Equity(1)...............................................             9.6
Increase to cash balance.................................................            21.0
                                                                                  -------
      Total uses of funds................................................       $   621.6
                                                                                  -------
                                                                                  -------
</TABLE>
 
    The sources and uses for the Refinancing were as follow:
 
<TABLE>
<CAPTION>
                                                                               (DOLLARS IN
SOURCES                                                                         MILLIONS)
- -------------------------------------------------------------------------  -------------------
<S>                                                                        <C>
Cash balances............................................................       $    17.0
Revolving Credit Facility(2).............................................            71.6
Term Loans...............................................................           200.0
Old Notes................................................................           200.0
                                                                                  -------
      Total sources of funds.............................................       $   488.6
                                                                                  -------
                                                                                  -------
</TABLE>
 
<TABLE>
<CAPTION>
USES
- ----------------------------------------------------------
<S>                                                         <C>
Interim Financing(3)......................................      $   471.6
Estimated Transactions fees and expenses(4)...............           17.0
                                                                  -------
      Total uses of funds.................................      $   488.6
                                                                  -------
                                                                  -------
</TABLE>
 
- --------------------------
 
(1) As a result of the Recapitalization, Corning continues to own 8.0% of the
    Common Stock of the Company.
 
(2) Total borrowings of up to $275.0 million under the Revolving Credit Facility
    are available for working capital and general corporate purposes, including
    $25.0 million for letters of credit. After giving effect to the Transactions
    on a pro forma basis, $203.4 million would have been available as of March
    31, 1998 under the Revolving Credit Facility. On April 9, 1998, the Company
    borrowed $59.6 million under the Revolving Credit Facility in connection
    with the Refinancing and the Company borrowed an additional $12.0 million
    through the date of the closing of the Offering.
 
(3) Excludes accrued interest on the Interim Financing. As of May 5, 1998 (the
    date of issuance of the Old Notes), accrued interest on the Interim
    Financing was $1.8 million.
 
(4) Includes Initial Purchasers' discount and offering discount on the Old
    Notes, fees related to the Credit Facilities and other fees and expenses
    incurred in connection with the Transactions.
 
                                       7
<PAGE>
                               THE EXCHANGE OFFER
 
<TABLE>
<S>                                 <C>
The Exchange Offer................  The Company is offering to exchange pursuant to the
                                    Exchange Offer up to $200,000,000 aggregate principal
                                    amount of its Exchange Notes for a like aggregate
                                    principal amount of its Old Notes. The terms of the
                                    Exchange Notes are identical in all material respects
                                    (including principal amount, interest rate and maturity)
                                    to the terms of the Old Notes for which they may be
                                    exchanged pursuant to the Exchange Offer, except that
                                    the Exchange Notes are freely transferrable by Holders
                                    thereof (other than as provided herein), and are not
                                    subject to any covenant regarding registration under the
                                    Securities Act. See "The Exchange Offer."
 
Minimum Condition.................  The Exchange Offer is not conditioned upon any minimum
                                    aggregate principal amount of Old Notes being tendered
                                    for exchange.
 
Expiration Date; Withdrawal of
  Tender..........................  The Exchange Offer will expire at 5:00 p.m., New York
                                    City time, on           , 1998, unless the Exchange
                                    Offer is extended, in which case the term "Expiration
                                    Date" means the latest date and time to which the
                                    Exchange Offer is extended. The Company does not
                                    currently intend to extend the Expiration Date. Tenders
                                    may be withdrawn at any time prior to 5:00 p.m., New
                                    York City time, on the Expiration Date. See "The
                                    Exchange Offer--Withdrawal Rights."
 
Exchange Date.....................  The date of acceptance for exchange of the Old Notes
                                    will be the third business day following the Expiration
                                    Date.
 
Conditions to the Exchange
  Offer...........................  The Exchange Offer is subject to certain customary
                                    conditions, which may be waived by the Company. The
                                    Company currently expects that each of the conditions
                                    will be satisfied and that no waivers will be necessary.
                                    See "The Exchange Offer--Certain Conditions to the
                                    Exchange Offer." The Company reserves the right to
                                    terminate or amend the Exchange Offer at any time prior
                                    to the Expiration Date upon the occurrence of any such
                                    condition.
 
Procedures for Tendering
  Old Notes.......................  Each Holder wishing to accept the Exchange Offer must
                                    complete, sign and date the Letter of Transmittal, or a
                                    facsimile thereof, in accordance with the instructions
                                    contained herein and therein, and mail or otherwise
                                    deliver such Letter of Transmittal, or such facsimile,
                                    together with the Old Notes and any other required
                                    documentation to the Exchange Agent at the address set
                                    forth therein. See "The Exchange Offer--Procedures for
                                    Tendering Old Notes" and "Plan of Distribution."
 
Use of Proceeds...................  There will be no proceeds to the Company from the
                                    exchange of Notes pursuant to the Exchange Offer.
 
Federal Income Tax Consequences...  The exchange of Notes pursuant to the Exchange Offer
                                    will not be a taxable event for federal income tax
                                    purposes.
</TABLE>
 
                                       8
<PAGE>
 
<TABLE>
<S>                                 <C>
Special Procedures for Beneficial
  Owners..........................  Any beneficial owner whose Old Notes are registered in
                                    the name of a broker, dealer, commercial bank, trust
                                    company or other nominee and who wishes to tender should
                                    contact such registered holder promptly and instruct
                                    such registered holder to tender on such beneficial
                                    owner's behalf. If such beneficial owner wishes to
                                    tender on such beneficial owner's own behalf, such
                                    beneficial owner must, prior to completing and executing
                                    the Letter of Transmittal and delivering the Old Notes,
                                    either make appropriate arrangements to register
                                    ownership of the Old Notes in such beneficial owner's
                                    name or obtain a properly completed bond power from the
                                    registered holder. The transfer of registered ownership
                                    may take considerable time. See "The Exchange
                                    Offer--Procedures for Tendering Old Notes."
 
Guaranteed Delivery Procedures....  Holders of Old Notes who wish to tender their Old Notes
                                    and whose Old Notes are not immediately available or who
                                    cannot deliver their Old Notes, the Letter of
                                    Transmittal or any other documents required by the
                                    Letter of Transmittal to the Exchange Agent prior to the
                                    Expiration Date must tender their Old Notes according to
                                    the guaranteed delivery procedures set forth in "The
                                    Exchange Offer--Procedures for Tendering Old Notes."
 
Acceptance of Old Notes and
  Delivery of Exchange Notes......  The Company will accept for exchange any and all Old
                                    Notes which are properly tendered in the Exchange Offer
                                    prior to 5:00 p.m., New York City time, on the
                                    Expiration Date. The Exchange Notes issued pursuant to
                                    the Exchange Offer will be delivered promptly following
                                    the Expiration Date. See "The Exchange Offer--Acceptance
                                    of Old Notes for Exchange; Delivery of Exchange Notes."
 
Effect on Holders of Old Notes....  As a result of the making of, and upon acceptance for
                                    exchange of all validly tendered Old Notes pursuant to
                                    the terms of this Exchange Offer, the Company will have
                                    fulfilled a covenant contained in the Exchange and
                                    Registration Rights Agreement (the "Registration Rights
                                    Agreement") dated as of May 5, 1998 among the Company
                                    and Chase Securities Inc., Salomon Brothers Inc and
                                    Citicorp Securities, Inc. (the "Initial Purchasers")
                                    and, accordingly, there will be no increase in the
                                    interest rate on the Old Notes pursuant to the terms of
                                    the Registration Rights Agreement, and the holders of
                                    the Old Notes will have no further registration or other
                                    rights under the Registration Rights Agreement. Holders
                                    of the Old Notes who do not tender their Old Notes in
                                    the Exchange Offer will continue to hold such Old Notes
                                    and will be entitled to all the rights and limitations
                                    applicable thereto under the Indenture dated as of May
                                    5, 1998 between the Company and The Bank of New York
                                    relating to the Old Notes and the Exchange Notes (the
                                    "Indenture"), except for any such rights under the
                                    Registration Rights Agreement that by their terms
                                    terminate or cease to have further effectiveness as a
                                    result of the making of, and the acceptance for exchange
                                    of all validly tendered Old
</TABLE>
 
                                       9
<PAGE>
 
<TABLE>
<S>                                 <C>
                                    Notes pursuant to, the Exchange Offer. All untendered
                                    Old Notes will continue to be subject to the
                                    restrictions on transfer provided for in the Old Notes
                                    and in the Indenture. To the extent that Old Notes are
                                    tendered and accepted in the Exchange Offer, the trading
                                    market for untendered Old Notes could be adversely
                                    affected.
 
Consequence of Failure to
  Exchange........................  Holders of Old Notes who do not exchange their Old Notes
                                    for Exchange Notes pursuant to the Exchange Offer will
                                    continue to be subject to the restrictions on transfer
                                    of such Old Notes as set forth in the legend thereon. In
                                    general, the Old Notes may not be offered or sold,
                                    unless registered under the Securities Act, except
                                    pursuant to an exemption from, or in a transaction not
                                    subject to, the Securities Act and applicable state
                                    securities laws. Other than in connection with the
                                    Exchange Offer, the Company does not currently
                                    anticipate that it will register the Old Notes under the
                                    Securities Act.
 
Exchange Agent....................  The Bank of New York is serving as exchange agent (the
                                    "Exchange Agent") in connection with the Exchange Offer.
                                    See "The Exchange Offer--Exchange Agent."
 
                                    TERMS OF THE EXCHANGE NOTES
 
Issuer............................  Corning Consumer Products Company.
 
Securities Offered................  $200,000,000 aggregate principal amount of 9 5/8% Series
                                    B Senior Subordinated Notes due 2008.
 
Maturity Date.....................  May 1, 2008.
 
Interest Payment Dates............  Interest on the Exchange Notes will be payable in cash
                                    semi-annually in arrears on each May 1 and November 1,
                                    commencing November 1, 1998.
 
Optional Redemption...............  On or after May 1, 2003, the Exchange Notes will be
                                    redeemable, in whole or in part, at the redemption
                                    prices set forth herein, together with accrued and
                                    unpaid interest, if any, to the date of redemption. In
                                    addition, at any time on or prior to May 1, 2001, the
                                    Company may redeem up to 35% of the original aggregate
                                    principal amount of the Exchange Notes with the net
                                    proceeds of one or more Equity Offerings, at a
                                    redemption price equal to 109.625% of the aggregate
                                    principal amount to be redeemed, together with accrued
                                    and unpaid interest, if any, to the date of redemption;
                                    PROVIDED that at least 65% of the original aggregate
                                    principal amount of the Exchange Notes remains
                                    outstanding immediately after each such redemption. See
                                    "Description of the Exchange Notes-- Optional
                                    Redemption."
 
Change of Control.................  Upon the occurrence of a Change of Control, the Company
                                    will have the option, at any time prior to May 1, 2003,
                                    to redeem the Exchange Notes, in whole but not in part,
                                    at a redemption price equal to 100% of the aggregate
                                    principal amount thereof plus
</TABLE>
 
                                       10
<PAGE>
 
<TABLE>
<S>                                 <C>
                                    the Applicable Premium, together with accrued and unpaid
                                    interest, if any, to the date of redemption. Upon the
                                    occurrence of a Change of Control, if the Company does
                                    not so redeem the Exchange Notes or if a Change of
                                    Control occurs on or after May 1, 2003, the Company will
                                    be required to make an offer to purchase the Exchange
                                    Notes at a price equal to 101% of the principal amount
                                    thereof, together with accrued and unpaid interest, if
                                    any, to the date of purchase. See "Description of the
                                    Exchange Notes--Repurchase at the Option of Holders--
                                    Change of Control."
 
Ranking...........................  The Exchange Notes will be unsecured, will be
                                    subordinated in right of payment to all existing and
                                    future Senior Indebtedness of the Company and will be
                                    effectively subordinated to all obligations of the
                                    subsidiaries of the Company. The Exchange Notes will
                                    rank PARI PASSU with any future Senior Subordinated
                                    Indebtedness of the Company and will rank senior to all
                                    Subordinated Indebtedness of the Company. The Indenture
                                    permits the Company to incur additional indebtedness,
                                    including up to $278.4 million of Senior Indebtedness
                                    under the Credit Facilities, subject to certain
                                    limitations. As of March 31, 1998, on a pro forma basis
                                    after giving effect to the Transactions, the aggregate
                                    amount of the Company's outstanding Senior Indebtedness
                                    would have been approximately $271.6 million (excluding
                                    unused commitments), all of which would have been
                                    secured indebtedness, the Company would have had no
                                    Senior Subordinated Indebtedness outstanding other than
                                    the Notes, and the Company's subsidiaries would have had
                                    total liabilities of $117.4 million (excluding
                                    guarantees in respect of the Credit Facilities). See
                                    "Unaudited Pro Forma Financial Information" and "Risk
                                    Factors--Adverse Consequences of Holding Company
                                    Structure" and "--Subordination."
 
Certain Covenants.................  The Indenture contains covenants that will, subject to
                                    certain exceptions, limit, among other things, the
                                    ability of the Company and/or its Restricted
                                    Subsidiaries to (i) pay dividends or make certain other
                                    restricted payments or investments; (ii) incur
                                    additional indebtedness and issue disqualified stock and
                                    preferred stock; (iii) create liens on assets; (iv)
                                    merge, consolidate, or sell all or substantially all of
                                    their assets; (v) enter into certain transactions with
                                    affiliates; (vi) create restrictions on dividends or
                                    other payments by Restricted Subsidiaries to the
                                    Company; (vii) incur guarantees of indebtedness by
                                    Restricted Subsidiaries; and (viii) incur Indebtedness
                                    senior to the Notes, but junior to Senior Indebtedness.
 
Absence of a Public Market for the
  Exchange Notes..................  The Exchange Notes are new securities and there is
                                    currently no established market for the Exchange Notes.
                                    Accordingly, there can be no assurance as to the
                                    development or liquidity of
</TABLE>
 
                                       11
<PAGE>
 
<TABLE>
<S>                                 <C>
                                    any market for the the Exchange Notes. The Company does
                                    not intend to apply for listing of the Exchange Notes on
                                    any national securities exchange or for their quotation
                                    on an automated dealer quotation system.
 
No Personal Liability of
  Directors, Officers, Employees
  and Stockholders................  No director, officer, employee, incorporator or
                                    stockholder of the Company shall have any liability for
                                    any obligations of the Company under the Exchange Notes
                                    or the Indenture or any claim based on, in respect of,
                                    or by reason of such obligation, or their creation. Such
                                    waiver may not be effective to waive liabilities under
                                    the federal securities laws and it is the view of the
                                    Commission that such a waiver is against public policy.
</TABLE>
 
                                  RISK FACTORS
 
    Prospective holders of the Exchange Notes should carefully consider the risk
factors set forth under the caption "Risk Factors" and the other information
included in this Prospectus prior to making an investment in the Notes. See
"Risk Factors."
                            ------------------------
 
    The principal executive offices of the Company are located at E-Building,
Houghton Park, Corning, New York 14831. The Company's telephone number is (607)
974-8605.
 
                                       12
<PAGE>
           SUMMARY HISTORICAL AND PRO FORMA FINANCIAL AND OTHER DATA
 
    The following table sets forth summary historical financial and other data
of the Company. The historical financial and other data for the three years
ended December 31, 1997 have been derived from, and should be read in
conjunction with, the consolidated financial statements of the Company and notes
thereto which have been audited by Price Waterhouse LLP, independent
accountants, and which are included elsewhere in this Prospectus. The historical
unaudited financial and other data for the quarters ended March 31, 1998 and
1997 and as of March 31, 1998 have been derived from, and should be read in
conjunction with, the unaudited financial statements of the Company and the
notes thereto included elsewhere in this Prospectus. In the opinion of
management, all adjustments, consisting of only normal recurring adjustments,
considered necessary for the fair presentation have been included in the
unaudited financial statements of the Company. Results for the quarter ended
March 31, 1998 are not necessarily indicative of results that can be expected
for the year ended December 31, 1998.
 
    The following table also presents certain summary unaudited pro forma
financial and other data of the Company. The unaudited pro forma financial and
other data for the three months ended March 31, 1998 and for the year ended
December 31, 1997 have been derived from the Pro Forma Financial Information (as
defined) and the notes thereto included elsewhere in this Prospectus. The
unaudited pro forma statement of operations data give effect to the Transactions
as if they had occurred as of January 1, 1997. The unaudited pro forma balance
sheet data give effect to the Transactions as if they had occurred on March 31,
1998. The summary pro forma financial data exclude the impact of (i) the
possible adjustment to the amount of the Cash Dividend, (ii) a potential payment
to Corning of up to $15.0 million in 2001 in the event the Company achieves a
cumulative gross margin in excess of $710.9 million for the three-year period
ended December 31, 2000, (iii) grants and anticipated grants of options to
purchase Common Stock to management and (iv) approximately $7.5 million of
expenditures to be made over the next three years in transition-related
expenditures as a result of the separation from Corning. See "The
Recapitalization" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Overview--Separation from Corning;
Transaction Related Charges." The summary unaudited pro forma financial data are
provided for informational purposes only and do not purport to be indicative of
the results that would have actually been obtained had the Transactions been
completed on the dates indicated or that may be expected to occur in the future.
 
    The summary historical and pro forma financial and other data should be read
in conjunction with the historical consolidated financial statements of the
Company and notes thereto, "Selected Historical Consolidated Financial and Other
Data," "Management's Discussion and Analysis of Financial Condition and Results
of Operations," "Unaudited Pro Forma Financial Information" and "The
Recapitalization" contained elsewhere in this Prospectus.
 
                                       13
<PAGE>
<TABLE>
<CAPTION>
                                                              PRO FORMA
                                                                THREE           THREE MONTHS             YEAR ENDED
                                                                MONTHS        ENDED MARCH 31,           DECEMBER 31,
                                                                ENDED                             -------------------------
                                                              MARCH 31,     --------------------    PRO FORMA
                                                               1998(1)        1998       1997        1997(1)        1997
                                                            --------------  ---------  ---------  --------------  ---------
                                                                                 (DOLLARS IN MILLIONS)
<S>                                                         <C>             <C>        <C>        <C>             <C>
STATEMENT OF OPERATIONS DATA:
Net sales(2)..............................................    $    116.5    $   116.5  $   128.3    $    572.9    $   572.9
Cost of sales.............................................          77.1         77.7       83.6         374.3        377.0
                                                                 -------    ---------  ---------       -------    ---------
Gross profit..............................................          39.4         38.8       44.7         198.6        195.9
Selling, general, administrative and research and
  development expenses....................................          36.7         37.1       32.8         144.2        137.3
Other corporate administrative expense(3).................            --           --        4.6            --         18.4
Provision for restructuring costs(4)......................            --           --         --            --           --
Transactions related expenses(5)..........................            --          1.4         --            --           --
Goodwill amortization.....................................           0.4          0.4        0.4           1.7          1.7
Other, net(6).............................................           0.4          0.4        0.4           0.7          5.9
Royalty income............................................          (0.2)        (0.2)      (0.2)         (2.0)        (2.0)
                                                                 -------    ---------  ---------       -------    ---------
Operating income (loss)...................................           2.1         (0.3)       6.7          54.0         34.6
Interest expense, net.....................................          10.7          1.6        2.1          42.8          8.5
                                                                 -------    ---------  ---------       -------    ---------
Income (loss) before taxes on income......................          (8.6)        (1.9)       4.6          11.2         26.1
Income tax expense (benefit)..............................          (1.0)         1.7        2.8           6.8         12.8
                                                                 -------    ---------  ---------       -------    ---------
Income (loss) before minority interest....................          (7.6)        (3.6)       1.8           4.4         13.3
Net income (loss).........................................    $     (7.6)   $    (3.6) $     1.8    $      4.1    $    13.0
                                                                 -------    ---------  ---------       -------    ---------
                                                                 -------    ---------  ---------       -------    ---------
 
OTHER FINANCIAL DATA:
Gross margin..............................................          33.8%        33.3%      34.8%         34.7%        34.2%
Operating margin..........................................           1.8%        (0.3)%       5.2%          9.4%        6.0%
Depreciation and amortization.............................  $        9.0    $     9.0  $    10.3  $       35.7    $    35.7
Capital expenditures......................................           7.9          7.9        4.1          28.6         28.6
Interest expense(7).......................................          10.2          1.6        2.5          41.0          9.0
EBITDA(8).................................................          11.1          8.7       17.0          89.7         70.3
Adjusted EBITDA(9)........................................            --         10.1       19.9            --         86.5
Adjusted EBITDA margin....................................            --          8.7%      15.5%           --         15.1%
 
<CAPTION>
 
                                                              1996       1995
                                                            ---------  ---------
 
<S>                                                         <C>        <C>
STATEMENT OF OPERATIONS DATA:
Net sales(2)..............................................  $   632.4  $   608.7
Cost of sales.............................................      435.9      431.2
                                                            ---------  ---------
Gross profit..............................................      196.5      177.5
Selling, general, administrative and research and
  development expenses....................................      154.2      168.2
Other corporate administrative expense(3).................       20.9       20.0
Provision for restructuring costs(4)......................        2.1         --
Transactions related expenses(5)..........................         --         --
Goodwill amortization.....................................        1.7        1.7
Other, net(6).............................................        0.6        0.4
Royalty income............................................       (1.6)      (1.6)
                                                            ---------  ---------
Operating income (loss)...................................       18.6      (11.2)
Interest expense, net.....................................       10.7        8.8
                                                            ---------  ---------
Income (loss) before taxes on income......................        7.9      (20.0)
Income tax expense (benefit)..............................        6.2       (1.6)
                                                            ---------  ---------
Income (loss) before minority interest....................        1.7      (18.4)
Net income (loss).........................................  $     1.6  $   (18.5)
                                                            ---------  ---------
                                                            ---------  ---------
OTHER FINANCIAL DATA:
Gross margin..............................................       31.1%      29.2%
Operating margin..........................................        2.9%      (1.8)%
Depreciation and amortization.............................  $    35.8  $    32.0
Capital expenditures......................................       35.8       40.6
Interest expense(7).......................................       12.4       11.0
EBITDA(8).................................................       54.4       20.8
Adjusted EBITDA(9)........................................       70.7       34.1
Adjusted EBITDA margin....................................       11.2%       5.6%
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                    AS OF MARCH 31, 1998
                                                                                   ----------------------
                                                                                                  PRO
                                                                                    ACTUAL     FORMA(1)
                                                                                   ---------  -----------
                                                                                   (DOLLARS IN MILLIONS)
<S>                                                                                <C>        <C>
BALANCE SHEET DATA (at end of period):
Net working capital..............................................................  $    60.4   $   152.8
Adjusted working capital(10).....................................................      159.9       143.8
Total assets.....................................................................      482.3       520.0
Total debt(11)...................................................................      106.4       481.8
Total stockholder's equity (deficit)(12).........................................      226.7       (69.0)
</TABLE>
 
- --------------------------
 
(1) The Transactions will be recorded as a recapitalization for financial
    reporting purposes, and, accordingly, the historical basis of the Company's
    assets and liabilities will not be impacted by the Transactions, with the
    exception of deferred taxes on income which will change to reflect the tax
    basis step-up which occurred upon consummation of the Recapitalization.
 
(2) Gross sales (before deductions for trade allowances, customer-paid freight
    and discounts) were $124.7 million, $139.3 million, $616.7 million, $690.0
    million and $668.5 million for the three months ended March 31, 1998 and
    1997 and the years ended December 31, 1997, 1996 and 1995, respectively.
 
(3) Other corporate administrative expenses represent an allocation of corporate
    charges from Corning to the Company in respect of certain administrative
    services provided to the Company by Corning. Corning calculated these
    charges as a percentage of the Company's budgeted sales. Commencing on
    January 1, 1998 Corning provided these services to the Company on the basis
    of a service agreement containing terms similar to that entered into on the
    date of the Recapitalization and expenses incurred under such agreement were
    reflected as selling, general and administrative and research and
    development expenses.
 
(4) The Company incurred net provisions for restructuring costs of $2.1 million
    in 1996 ($4.2 million of gross charges offset by a $2.1 million reversal of
    existing reserves) resulting from the implementation of the Business
    Redesign Program. The major components of the 1996 charges were (i) costs
    related to a reduction in the
 
                                       14
<PAGE>
    number of SG&A and manufacturing employees and (ii) expenses incurred to
    close under-performing outlet stores.
 
(5) Reflects expenses incurred in connection with the Transactions.
 
(6) Other charges include miscellaneous expenses and miscellaneous income.
    Included in the 1997 amount are $4.5 million of expenses related to
    incremental incentive payments made to employees during the sale of the
    Company.
 
(7) Interest expense represents interest expense exclusive of amortization of
    deferred financing fees and the debt discount.
 
(8) EBITDA represents operating income (loss) plus depreciation and
    amortization. EBITDA is presented because management understands that such
    information is considered by certain investors to be an additional basis for
    evaluating the Company's ability to pay interest and repay debt. EBITDA
    should not be considered an alternative to measures of operating performance
    as determined in accordance with generally accepted accounting principles,
    including net income, as a measure of the Company's operating results and
    cash flows or as a measure of the Company's liquidity. Because EBITDA is not
    calculated identically by all companies, the presentation herein may not be
    comparable to other similarly titled measures of other companies.
 
(9) Adjusted EBITDA represents EBITDA less adjustments to eliminate (i) other
    corporate administrative expenses for certain services performed by Corning
    for the Company; (ii) expenses related to incremental incentive payments
    made to employees during the sale of the Company; (iii) expenses incurred in
    connection with the Transactions; and (iv) provisions for restructuring
    costs; net of (v) adjustments for expenses expected to be incurred by the
    Company to replace the services previously performed by Corning described in
    clause (i) above.
 
<TABLE>
<CAPTION>
                                                                     THREE MONTHS
                                                                        ENDED                    YEAR ENDED
                                                                       MARCH 31                 DECEMBER 31,
                                                                 --------------------  -------------------------------
                                                                   1998       1997       1997       1996       1995
                                                                 ---------  ---------  ---------  ---------  ---------
<S>                                                              <C>        <C>        <C>        <C>        <C>
 EBITDA........................................................  $     8.7  $    17.0  $    70.3  $    54.4  $    20.8
  Other corporate administrative expenses (See Note 3).........         --        4.6       18.4       20.9       20.0
  Incentive payment expenses (See Note 6)......................         --         --        4.5     --         --
  Transactions related expenses (5)............................        1.4         --         --         --         --
  Provision for restructuring costs (See Note 4)...............         --         --     --            2.1     --
  Addition to SG&A.............................................         --       (1.7)      (6.7)      (6.7)      (6.7)
                                                                 ---------  ---------  ---------  ---------  ---------
  Adjusted EBITDA..............................................  $    10.1  $    19.9  $    86.5  $    70.7  $    34.1
                                                                 ---------  ---------  ---------  ---------  ---------
                                                                 ---------  ---------  ---------  ---------  ---------
</TABLE>
 
   For a more complete description of the services performed by Corning after
    the Recapitalization and the ability of the Company to achieve such cost
    savings, see "Risk Factors--No Prior Operations as an Independent Company"
    and "Management's Discussion and Analysis of Financial Condition and Results
    of Operations-- Overview--Separation from Corning; Transaction Related
    Charges."
 
(10) Adjusted working capital is calculated as (i) current assets excluding cash
    and amounts due from Corning, less (ii) current liabilities excluding debt,
    amounts due to Corning and payables to be reimbursed by Corning.
 
(11) As of March 31, 1998 on a historical basis, total debt included $10.2
    million of industrial revenue bonds and $96.2 million due to Corning under
    the $200.0 million intercompany revolving credit facility previously
    provided by Corning.
 
(12) Upon consummation of the Recapitalization, CCPC Acquisition acquired 92.0%
    of the outstanding shares of Common Stock of the Company for $110.4 million
    and Corning retained 8.0% of the outstanding shares of Common Stock of the
    Company (an implied value of $9.6 million). Under the 1998 Plan, CCPC
    Acquisition is currently in the process of selling shares of Common Stock,
    and the Company is making grants of options to purchase Common Stock, to
    certain members of management of the Company. CCPC Acquisition also acquired
    1,200,000 shares of the Company's Junior Preferred Stock for $30.0 million,
    which is reflected in the pro forma total stockholder's equity (deficit).
 
                                       15
<PAGE>
                                  RISK FACTORS
 
    HOLDERS OF OLD NOTES SHOULD CONSIDER CAREFULLY, IN ADDITION TO THE OTHER
INFORMATION CONTAINED IN THIS PROSPECTUS, THE FOLLOWING FACTORS BEFORE DECIDING
TO TENDER OLD NOTES IN THE EXCHANGE OFFER. THE RISK FACTORS SET FORTH BELOW ARE
GENERALLY APPLICABLE TO THE OLD NOTES AS WELL AS THE EXCHANGE NOTES.
 
CONSEQUENCES OF FAILURE TO EXCHANGE
 
    Holders of Old Notes who do not exchange their Old Notes for Exchange Notes
pursuant to the Exchange Offer will continue to be subject to the restrictions
on transfer of such Old Notes as set forth in the legend thereon. In general,
Old Notes may not be offered or sold unless registered under the Securities Act,
except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable state securities
laws. The Company does not currently intend to register the Old Notes under the
Securities Act. Based on interpretations by the staff of the Commission, the
Company believes that Exchange Notes issued pursuant to the Exchange Offer in
exchange for Old Notes may be offered for resale, resold or otherwise
transferred by Holders thereof (other than any such Holder which is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act) without compliance with the registration and prospectus delivery provisions
of the Securities Act, provided that such Old Notes were acquired in the
ordinary course of such Holders' business and such Holders have no arrangement
with any person to participate in the distribution of such Exchange Notes. Each
broker-dealer that receives Exchange Notes for its own account in exchange for
Old Notes, where such Old Notes were acquired by such broker-dealer as a result
of market-making activities or other trading activities, must acknowledge that
it will deliver a prospectus in connection with any resale of such Exchange
Notes. See "Plan of Distribution." To the extent that Old Notes are tendered and
accepted in the Exchange Offer, the trading market for untendered and tendered
but unaccepted Old Notes will be adversely affected.
 
SUBSTANTIAL LEVERAGE AND DEBT SERVICE
 
    The Company incurred substantial indebtedness in connection with the
Recapitalization. See "The Recapitalization" and "Capitalization." As of March
31, 1998, after giving pro forma effect to the Transactions, the Company would
have had $481.8 million of consolidated indebtedness, a common stockholders'
deficit of $69.0 million and $203.4 million available to be borrowed under the
Revolving Credit Facility. Pro forma net income for the year ended December 31,
1997 would have been $4.1 million, as compared to net income of $13.0 million
for the same period on a historical basis, and pro forma interest expense, (net)
for 1997 would have been $42.8 million as compared to $8.5 million for the same
period on a historical basis. For the three months ended March 31, 1998, pro
forma net loss would have been $7.6 million, as compared to a net loss of $3.6
million for the same period on a historical basis. Pro forma interest expense
(net) would have been $10.7 million for the three months ended March 31, 1998,
as compared to $1.6 million on a historical basis for the same periods. See
"Capitalization" and "Unaudited Pro Forma Financial Information." The Company
and its subsidiaries may incur additional indebtedness (including certain Senior
Indebtedness) in the future, subject to certain limitations contained in the
instruments governing its indebtedness. Accordingly, the Company will have
significant debt service obligations.
 
    The Company's debt service obligations will have important consequences to
holders of Exchange Notes, including the following: (i) a substantial portion of
the Company's cash flow from operations will be dedicated to the payment of
principal and interest on its indebtedness, thereby reducing the funds available
to the Company for operations, future business opportunities and other purposes
and increasing the Company's vulnerability to adverse general economic and
industry conditions; (ii) the Company's ability to obtain additional financing
in the future may be limited; (iii) certain of the Company's borrowings
(including, but not limited to, the amounts borrowed under the Credit
Facilities) will be at variable rates of interest, which will make the Company
vulnerable to increases in interest rates; (iv) all of the indebtedness incurred
in connection with the Credit Facilities will become due prior to the time the
 
                                       16
<PAGE>
principal payment on the Exchange Notes will become due; (v) the Company will be
substantially more leveraged than certain of its competitors, which might place
the Company at a competitive disadvantage; and (vi) the Company may be hindered
in its ability to adjust rapidly to changing market conditions.
 
    The Company's ability to make scheduled payments of the principal of, or to
pay interest on, or to refinance its indebtedness (including the Exchange Notes)
and to make scheduled payments under its operating leases or to fund planned
capital expenditures or finance acquisitions will depend on its future
performance, which to a certain extent is subject to economic, financial,
competitive and other factors beyond its control. Based upon the current level
of operations and anticipated growth, management believes that future cash flow
from operations, together with available borrowings under the Revolving Credit
Facility, will be adequate to meet the Company's anticipated requirements for
working capital, capital expenditures, lease payments, interest payments and
scheduled principal payments for the foreseeable future. Any future
acquisitions, joint ventures or other similar transactions will likely require
additional capital and there can be no assurance that any such capital will be
available to the Company on acceptable terms or at all. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources." In addition, there can be no
assurance that the Company's business will continue to generate sufficient cash
flow from operations in the future to service its debt, make necessary capital
expenditures or meet its other cash needs. If unable to do so, the Company may
be required to refinance all or a portion of its existing debt, including the
Exchange Notes, to sell assets or to obtain additional financing. There can be
no assurance that any such refinancing or that any such sale of assets or
additional financing would be possible on terms reasonably favorable to the
Company.
 
RESTRICTIVE LOAN COVENANTS
 
    The Credit Facilities and the Indenture contain numerous financial and
operating covenants that will limit the discretion of the Company's management
with respect to certain business matters. These covenants will place significant
restrictions on, among other things, the ability of the Company to incur
additional indebtedness, pay dividends and other distributions, prepay
subordinated indebtedness, enter into sale and leaseback transactions, create
liens or other encumbrances, make capital expenditures, make certain investments
or acquisitions, engage in certain transactions with affiliates, sell or
otherwise dispose of assets and merge or consolidate with other entities and
otherwise restrict corporate activities. See "Description of Credit Facilities"
and "Description of the Exchange Notes--Certain Covenants." The Credit
Facilities also require the Company to meet certain financial ratios and tests.
The ability of the Company to comply with these and other provisions of the
Credit Facilities and the Indenture may be affected by changes in economic or
business conditions or other events beyond the Company's control. A failure to
comply with the obligations contained in the Credit Facilities or the Indenture
could result in an event of default under either the Credit Facilities or the
Indenture which could result in acceleration of the related debt and the
acceleration of debt under other instruments evidencing indebtedness that may
contain cross-acceleration or cross-default provisions. If, as a result thereof,
a default occurs with respect to Senior Indebtedness, the subordination
provisions in the Indenture would likely restrict payments to the holders of the
Exchange Notes. If the indebtedness under the Credit Facilities were to be
accelerated, there can be no assurance that the assets of the Company would be
sufficient to repay in full such indebtedness and the other indebtedness of the
Company, including the Exchange Notes.
 
ADVERSE CONSEQUENCES OF HOLDING COMPANY STRUCTURE
 
    The Company is in the process of contributing substantially all of its
assets to its subsidiaries and thus will operate as a holding company which
conducts substantially all of its operations through its subsidiaries.
Consequently, the Exchange Notes will be effectively subordinated to the
obligations of the Company's subsidiaries, including the guarantee by its
subsidiaries of obligations under the Credit Facilities. The Exchange Notes will
not be guaranteed by any of the Company's subsidiaries. In the event
 
                                       17
<PAGE>
of an insolvency, liquidation or other reorganization of any of the subsidiaries
of the Company, the creditors of the Company (including the holders of the
Exchange Notes), as well as stockholders of the Company, will have no right to
proceed against the assets of such subsidiaries or to cause the liquidation or
bankruptcy of such subsidiaries under Federal bankruptcy laws. Creditors of such
subsidiaries, including lenders under the Credit Facilities, would be entitled
to payment in full from such assets before the Company would be entitled to
receive any distribution therefrom. Except to the extent that the Company may
itself be a creditor with recognized claims against such subsidiaries, claims of
creditors of such subsidiaries will have priority with respect to the assets and
earnings of such subsidiaries over the claims of creditors of the Company,
including claims under the Exchange Notes. In addition, as a result of the
Company becoming a holding company, the Company's operating cash flow and its
ability to service its indebtedness, including the Exchange Notes, will be
dependent upon the operating cash flow of its subsidiaries and the payment of
funds by such subsidiaries to the Company in the form of loans, dividends or
otherwise. As of March 31, 1998, after giving pro forma effect to the
Transactions, the subsidiaries of the Company would have had total liabilities
of $117.4 million (excluding guarantees in respect of the Credit Facilities).
 
SUBORDINATION
 
    The Company's obligations under the Exchange Notes will be subordinate and
junior in right of payment to all existing and future Senior Indebtedness of the
Company. As of March 31, 1998, on a pro forma basis after giving effect to the
Transactions, the aggregate amount of the Company's outstanding Senior
Indebtedness would have been approximately $271.6 million (excluding unused
commitments). Although the Indenture contains limitations on the amount of
additional indebtedness which the Company and its subsidiaries may incur, under
certain circumstances the amount of such indebtedness could be substantial and
such indebtedness could be Senior Indebtedness. By reason of such subordination,
in the event of an insolvency, liquidation, or other reorganization of the
Company, the lenders under the Credit Facilities and other creditors who are
holders of Senior Indebtedness must be paid in full before the Holders may be
paid; accordingly, there may be insufficient assets remaining after payment of
prior claims to pay amounts due on the Exchange Notes. In addition, under
certain circumstances, no payments may be made with respect to the Exchange
Notes if a default exists with respect to Senior Indebtedness. See "Description
of the Exchange Notes."
 
ENCUMBRANCES ON ASSETS TO SECURE CREDIT FACILITIES
 
    In addition to being subordinated to all existing and future Senior
Indebtedness of the Company, the Exchange Notes will not be secured by any of
the Company's assets. The Company's obligations under the Credit Facilities are
required to be secured by a first priority pledge of and security interest in
(i) the stock of all the existing and subsequently acquired direct domestic
subsidiaries of the Company other than common stock of unrestricted subsidiaries
and certain subsidiaries created or acquired in connection with permitted
acquisitions, (ii) evidences of indebtedness in excess of $5 million received by
the Company in connection with asset sales other than sales in the ordinary
course of business or in connection with permitted sale-leasebacks and (iii) 65%
of the common stock of existing and subsequently acquired material direct
foreign subsidiaries. If the Company becomes insolvent or is liquidated, or if
payment under any of the Credit Facilities is accelerated, the lenders under the
Credit Facilities will be entitled to exercise the remedies available to a
secured lender under applicable law. See "Description of Credit Facilities" and
"Description of the Exchange Notes."
 
CHANGE OF CONTROL
 
    The Indenture provides that, upon the occurrence of a Change of Control, the
Company will (unless the Company elects to redeem the Exchange Notes in the
event of a Change of Control prior to May 1, 2003) make an offer to purchase all
or any part of the Exchange Notes at a price in cash equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest, if any, to
the date of purchase.
 
                                       18
<PAGE>
The Credit Facilities prohibit the Company from repurchasing any Exchange Notes,
except with the sum of $50.0 million, the proceeds of certain proceeds of one or
more Equity Offerings, a portion of excess cash flow and other amounts not
applied to repay borrowings under the Term Loan Facility less certain
investments in acquisition subsidiaries and minority investments. The Credit
Facilities also provide that certain change of control events with respect to
the Company constitute a default thereunder. Any future credit agreements or
other agreements relating to Senior Indebtedness to which the Company becomes a
party may contain similar restrictions and provisions. In the event a Change of
Control occurs at a time when the Company is prohibited from purchasing the
Exchange Notes, the Company could seek the consent of its lenders to purchase
the Exchange Notes or could attempt to refinance the borrowings that contain
such a prohibition. If the Company does not obtain such a consent or refinance
such borrowings, the Company would remain prohibited from purchasing the
Exchange Notes. In such case, the Company's failure to purchase tendered
Exchange Notes would constitute a default under the Indenture, which, in turn,
could result in amounts outstanding under the Credit Facilities being declared
due and payable. Any such declaration could have adverse consequences to the
Company and the Holders. In the event of a Change of Control, there can be no
assurance that the Company would have sufficient assets to satisfy all of its
obligations under the Credit Facilities and the Exchange Notes. If a default
occurs with respect to any Senior Indebtedness, the subordination provisions in
the Indenture would likely restrict payments to the Holders. The provisions
relating to a Change of Control included in the Indenture may increase the
difficulty of a potential acquiror obtaining control of the Company. See
"Description of the Exchange Notes--Repurchase at the Option of Holders--Change
of Control."
 
RISKS RELATED TO REALIZING OBJECTIVES OF THE BUSINESS REDESIGN PROGRAM
 
    The two major objectives of the Company's Business Redesign Program are to,
first, streamline the Company's business to focus on profitable products and
customers while reducing the Company's cost structure and, second, adopt
initiatives to increase sales while maintaining and improving upon the cost
efficiencies achieved in the first phase of the Business Redesign Program. The
Company's ability to achieve these objectives is subject to the effects of a
number of business, industry, economic and other factors, many of which are
beyond the Company's control, such as general economic conditions, potential
revenue instability arising from cost savings initiatives or otherwise, labor
relations, the response of competitors or customers to the Company's Business
Redesign Program, delays in implementation of the second phase of the Business
Redesign Program, ability to retain cost savings previously achieved, retailer
consolidation or strategy changes, competition for retail shelf space and the
relative success of new product introductions. With the implementation of the
Business Redesign Program in 1996, management anticipated that the narrowing of
the Company's customer base and product offerings would lead to short-term sales
decreases. The Company has experienced sales decreases in excess of those
expected. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Overview" for a discussion of other factors affecting the
Company's recent and future financial performance.
 
RISKS ASSOCIATED WITH INTERNATIONAL MARKETS
 
    A significant portion of the Company's sales is derived from international
markets. During 1997, approximately 25% of the Company's net sales were
generated outside the United States, including 5% in Korea, which was the
Company's largest market outside North America. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Overview--Other
Matters." Approximately 63% of the Company's international net sales in 1997
were made in U.S. dollars, with the balance realized in other currencies.
Currency exchange rate fluctuations may significantly affect the Company's
foreign sales and earnings. Increased strength of the U.S. dollar will increase
the effective price of the Company's products sold in U.S. dollars and therefore
may materially adversely affect sales. The Company's costs are predominantly
denominated in U.S. dollars. Thus, with respect to the sales conducted in
foreign currencies, increased strength of the U.S. dollar could decrease the
Company's
 
                                       19
<PAGE>
reported revenues and margins in respect of such sales to the extent the Company
is unable or determines not to increase local currency prices.
 
    Increasing its sales in international markets, particularly Latin America
and Asia, is a component of the Company's business strategy. As a result,
economic conditions in these markets could have an increasingly significant
effect on the Company's operating results. Certain Asian economies have
experienced recent economic disruptions, including significant currency
devaluation. For the first quarter of 1998, the Company recorded gross sales and
operating income (loss) (before allocation of manufacturing variances and
corporate overhead) of $4.1 million and $(0.1) million in Asian markets
(excluding Japan), respectively, compared to $16.7 million and $6.9 million in
the first quarter of 1997. For 1997, gross sales and operating income (before
allocation of manufacturing variances and corporate overhead) from Asian markets
(excluding Japan) were $58.1 million and $18.5 million, respectively. Results in
Japan in the first quarter of 1998 were substantially equivalent with those in
the prior year. Although the Company believes that Asian markets offer long term
growth potential, the current disruptions in Asia are expected to continue to
materially adversely affect the Company's results of operations in the short
term. Because international sales are among the Company's most profitable,
disruptions in international sales have a disproportionate effect on the Company
profits. A significant portion of the Company's operating income has
historically been derived from international sales. In addition, the Company
expects increased competition in domestic markets from Asian competitors. See
"--Potential for Increased Competition," and "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Overview."
 
    The Company's international sales and operations are also subject to other
risks, including new and different legal and regulatory requirements in local
jurisdictions; export duties or import quotas; domestic and foreign customs and
tariffs or other trade barriers; potential difficulties in staffing and labor
disputes; managing and obtaining support and distribution for local operations;
increased costs of transportation or shipping; credit risk or financial
condition of local customers and distributors; potential difficulties in
protecting intellectual property; risk of nationalization of private
enterprises; potential imposition of restrictions on investments; potentially
adverse tax consequences, including imposition or increase of withholding and
other taxes on remittances and other payments by subsidiaries; foreign exchange
restrictions; and local political and social conditions, including the
possibility of hyperinflationary conditions and political instability in certain
countries. There can be no assurance that the foregoing factors will not have a
material adverse effect on the Company's international operations or sales or
upon its financial condition and results of operations.
 
    The Company's continued growth is dependent in part upon its ability to
expand its operations into international markets where it currently has little
presence. The Company may experience difficulty entering new international
markets due to greater regulatory barriers than in the United States, the
necessity of adapting to new regulatory systems and problems related to entering
new markets with different cultural bases and political systems. As the Company
continues to expand its international operations, these and other risks
associated with international operations are likely to increase. In addition, as
the Company enters new geographic markets, it may encounter significant
competition from the primary participants in such markets, some of which may
have substantially greater resources than the Company.
 
    In November 1994, Corning and the Company sold their European, Russian,
Middle Eastern and African consumer products businesses to Newell, a significant
competitor of the Company, and agreed for a five-year period, subject to certain
distribution agreements with Newell, not to manufacture, sell or distribute
competing products in such territories. Sales of the Company's products in these
territories have not been significant and are not expected to be significant in
the foreseeable future. See "Business--Distribution Channels-International" and
"Business--Distribution Channels-European, Russian, Middle Eastern and African
Consumer Products Business."
 
                                       20
<PAGE>
POTENTIAL FOR INCREASED COMPETITION
 
    The market for the Company's products is highly competitive. Competition in
the United States is affected not only by the large number of domestic
manufacturers but also by the large volume of foreign imports. In addition,
recently the Company has experienced increased competition in the United States
from low-cost Asian competitors and expects this trend to continue in the
future. The Company's major bakeware, dinnerware and cookware competitors for
domestic sales include Newell, Rubbermaid Incorporated, Ekco Housewares Inc.,
Pfaltzgraff Co., Lenox Inc., The Meyer Corporation, Inc. and T-Fal Corporation.
 
    The market for housewares outside the United States and Europe is relatively
fragmented. The competitive landscape differs by country and region.
Internationally, depending on the country or region, the Company competes with
other U.S. companies operating abroad, locally manufactured private label goods
and international companies competing in the worldwide bakeware, dinnerware and
rangetop cookware categories. Major competitors abroad include Durand Verrerie
Christallerie D'Arquey, Lipper International Inc., Newell, Vitro S.A., NEG
(Nippon Electric Glass) and Schott Glaswerke.
 
    Several of the Company's competitors are larger and may be less leveraged
and have greater financial resources than the Company following the completion
of the Transactions. In addition, there are no substantial regulatory or other
barriers to the entry of new competitors into the industry.
 
    A number of factors affect competition in the sale of bakeware, dinnerware
and rangetop cookware manufactured and/or sold by the Company, including
quality, price competition from competitors and price point parameters
established by the Company's various distribution channels. The Company has,
from time to time, experienced price and market share pressure from certain
competitors in certain product lines, particularly in the bakeware category
where metal products of competitors have created retailer price and margin
pressures, and in the rangetop cookware category where non-stick aluminum
products have increased their share of rangetop cookware sales at the expense of
stainless steel products due to the durability and ease of cleaning of new
non-stick coatings.
 
    Shelf space is a key factor in determining retail sales of bakeware,
dinnerware and rangetop cookware products. A competitor that is able to maintain
or increase the amount of retail space allocated to its product may gain a
competitive advantage for that product, and in recent fiscal quarters the
Company has lost shelf space in its distribution channels to certain of its
competitors. See "--Risks Related to Realizing Objectives of the Business
Redesign Program" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations." The allocation of retail space is
influenced by many factors, including brand name recognition, quality and price
of the product, level of service by the manufacturer and promotions.
 
    In addition, new product introductions are an important factor in the
categories in which the Company's products compete. Other important competitive
factors are brand identification, style, design, packaging and the level of
service provided to customers. The importance of these competitive factors
varies from customer to customer and from product to product. See "--Development
of New Products" and "Business--Competition." There can be no assurance that the
Company will be able to compete successfully against current and future sources
of competition or that the current and future competitive pressures faced by the
Company will not adversely affect its profitability or financial performance.
See "Business--Competition."
 
NO PRIOR OPERATIONS AS AN INDEPENDENT COMPANY
 
    Prior to the Recapitalization, the Company was operated as a wholly owned
subsidiary of Corning. While owned by Corning, Corning provided the Company with
credit support, as well as certain technical, operational and administrative
support services, including the Company's financial reporting systems. Corning
has agreed to continue to provide many of these services for a limited time
after the Closing Date, after which time the Company will be required to provide
for such services either internally
 
                                       21
<PAGE>
or through third parties. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Overview--Separation from Corning;
Transaction Related Charges" and "Certain Relationships and Related Party
Transactions." There can be no assurance that the Company will be able to obtain
replacement sources for such services, or that if obtained, such services will
be obtained on terms as favorable as those provided by Corning. In addition,
there can be no assurance that due to unanticipated occurrences the Company will
be able to achieve the cost savings in administrative services presented in the
historical and pro forma financial information included herein.
 
DEVELOPMENT OF NEW PRODUCTS
 
    The development and introduction of new products (including product line
extensions and renewals) is a significant factor in expanding product categories
and successful competition within product categories. The Company budgets
expenditures for, and actively pursues, the development of new products. There
can be no assurance, however, that the Company will successfully develop new
products or, if developed, that new products will achieve market acceptance. The
Company's failure to develop new products that gain market acceptance could
adversely affect the Company's competitive position and could materially and
adversely affect the Company's results of operations.
 
DEPENDENCE ON SIGNIFICANT CUSTOMERS
 
    In 1997, the Company's top two customers represented approximately 18% of
its gross sales and the Company's 25 largest domestic customers represented
approximately 35% of its gross sales. The further implementation of the Business
Redesign Program is likely to increase the percentage of sales to the Company's
top customers. The Company does not have long-term purchase agreements or other
contractual assurances as to future sales to these major customers. Decreased
levels or the deferral of orders by the Company's major customers in the past
have had, and in the future may have, a material adverse effect on the Company's
results of operations. In addition, due to the allocation of retail shelf space
to suppliers' products far in advance of the placement and shipment of orders
for such products, the Company's net sales are reliant to a certain extent on
the ability of its strategic accounts to successfully execute on such plans, and
any deferral of orders does not allow sufficient notice to obtain satisfactory
alternative sales arrangements for such products. See "Business--Distribution
Channels-- Domestic Wholesale."
 
    In addition, continued consolidation within the retail industry may result
in an increasingly concentrated customer base. To the extent that such
consolidation continues to occur, the Company's net sales and profitability may
be increasingly sensitive to a deterioration in the financial condition of or
other adverse developments in its relationships with one or more customers.
 
RETAIL INDUSTRY
 
    The Company's business depends on the strength of the retail economies in
various parts of the world, primarily in North America, and to a lesser extent
in Asia, Latin America and Australia, which are affected by such factors as
consumer demand, the condition of the retail industry and weather conditions.
Due to the recent economic conditions in Asia, the Company's net sales to Asian
markets have declined significantly due to overall declines in demand as well as
severe price competition. The Company's business is also sensitive to consumer
spending patterns, which in turn are subject to prevailing economic conditions.
Weak retail environments, whether due to economic or other conditions, may spur
manufacturers and marketers, including the Company, to increase their
discounting and promotional activities. The Company may also not be able to
fully offset the impact of inflation through price increases due to an
unfavorable retail environment. Future economic recessions could have a material
adverse effect on the Company's financial condition and results of operations.
 
    Recently, the retail industry has been characterized by intense competition
and consolidation, whereby certain customers of the Company have incurred a
significant amount of debt, have entered bankruptcy or have liquidated and left
the retail market. As a result, the Company may be unable to
 
                                       22
<PAGE>
collect some or all amounts owed by these customers. Additionally, all or part
of the operations of a retailer that seeks bankruptcy or other debtor protection
may be discontinued or sales of the Company's products to such a retailer may be
curtailed or terminated as a result of such bankruptcy or insolvency
proceedings. In addition, the weakened financial condition of certain retailer
customers has caused the Company to decrease its sales to such retailers in an
effort to reduce the Company's credit risk.
 
    Competition in the retail industry has in the past caused certain of the
Company's customers to engage in certain operational changes, including altering
their product mix (i.e., reducing the portion of shelf space allocated to the
Company's products or the categories in which the Company's products compete)
and significantly reducing inventory levels that have adversely affected the
Company's results of operations. There can be no assurance that the foregoing
factors will not continue to affect the Company.
 
    As is customary in the retail industry, the Company generally does not enter
into written agreements with customers but relies on orders that are cancelable
until shipment. Decreased levels or the deferral of orders by the Company's
customers in the past have had, and in the future may have, a material adverse
effect on the Company's results of operations. See "Business--Distribution
Channels."
 
    Company-operated outlet stores accounted for approximately 34% of the
Company's U.S. gross sales during 1997. If consumer preference and retail sales
volume were to shift away from outlet stores and outlet malls, the Company's
sales and results of operations could be materially adversely affected.
 
FLUCTUATIONS IN RAW MATERIAL COSTS
 
    The Company purchases its raw materials on the spot market and through
long-term contracts with suppliers. The replacement of certain raw material
suppliers has in the past had, and may in the future have, an adverse effect on
the Company's operations and financial performance, and significant increases in
the cost of any of the principal raw materials used by the Company, namely sand,
soda ash, borax, limestone, lithia-containing spars, alumina, cullet, stainless
steel, copper and corrugated packaging materials, could have a material adverse
effect on its results of operations. The Company's molded plastic products and
certain components of its kitchenware products are manufactured from plastic
resin, which is produced from petrochemical intermediates. Plastic resin prices
may fluctuate as a result of changes in natural gas and crude oil prices and the
capacity, supply and demand for resin and the petrochemical intermediates from
which it is produced. Costs of steel, aluminum and copper, which are used in
manufacturing the Company's bakeware products, and corrugated boxes and
packaging, which are used in the display and distribution of the Company's
products, are also subject to market fluctuations. To the extent the Company is
unable to pass on increases in the cost of its raw materials to its customers,
such increases may have a material adverse effect on the profitability of the
Company. The Company does not engage in any hedging activities for commodity
trading relating to its supply of raw materials. See "Business--Raw Materials
and Supplies."
 
ACQUISITION RELATED RISKS
 
    Although the Company has not historically relied on acquisitions to grow its
business, part of the Company's business strategy is to selectively acquire
other businesses that will complement its existing business. Management is
unable to predict whether or when any prospective acquisition candidates will
become available or the likelihood of a material transaction being completed
should any negotiations commence. The Company's ability to finance acquisitions
may be constrained by, among other things, its high degree of leverage following
the Transactions. The Credit Facilities and the Indenture may significantly
limit the Company's ability to make acquisitions and to incur indebtedness in
connection with acquisitions. In addition, acquisitions by the Company will
involve risks, including the successful integration and management of acquired
technology, operations and personnel. The integration of acquired businesses may
also lead to the loss of key employees of the acquired companies and diversion
of management attention from ongoing business concerns. There can be no
assurance that
 
                                       23
<PAGE>
any acquisition will be made, that the Company will be able to obtain additional
financing needed to finance any such acquisition and, if any acquisitions are so
made, that they will be successful.
 
LABOR RELATIONS
 
    The Company currently is a party to several domestic and international
collective bargaining agreements, including agreements with the American Flint
Glass Workers Union, the Aluminum Brick & Glass Workers International Union, the
International Association of Machinists and Aerospace Workers and the Australia
Workers Union. These agreements will expire at various times in the future
between May 31, 1998 and April 2001. The inability of the Company to renew such
agreements could result in work stoppages and other labor disturbances, which
could disrupt the Company's business and adversely affect the Company's results
of operations. See "Business--Employees."
 
CONTROL BY KKR AFFILIATES
 
    After the Recapitalization, 92% of the issued and outstanding shares of
Common Stock was held by CCPC Acquisition, a wholly-owned subsidiary of BW
Holdings. Under the 1998 Plan, CCPC Acquisition is currently in the process of
selling shares of Common Stock, and the Company is making grants of options to
purchase Common Stock, to certain members of management of the Company. BW
Holdings is a Delaware limited liability company whose members are certain
members of senior management of Borden, KKR Partners II, L.P. and Whitehall
Associates L.P. KKR Associates, L.P. is the sole general partner of each of KKR
Partners II, L.P. and Whitehall Associates L.P.  KKR Associates, L.P. is a
Delaware limited partnership whose general partners are also the members of the
limited liability company which is the general partner of KKR. Accordingly,
affiliates of KKR will control the Company and have the power to elect all of
its directors, appoint new management and approve any action requiring the
approval of Company stockholders, including adopting amendments to the Company's
certificate of incorporation and approving mergers or sales of substantially all
of the Company's assets. There can be no assurance that the interests of KKR and
its affiliates will not conflict with the interests of the holders of the
Exchange Notes. See "Management," "Principal Stockholders" and "Certain
Relationships and Related Party Transactions."
 
DEPENDENCE UPON KEY MANAGEMENT; NEED TO HIRE ADDITIONAL QUALIFIED PERSONNEL
 
    The Company is currently dependent upon the ability and experience of its
senior operations team and administrative services provided by Corning. The
Company is in the process of developing its organization to replace the services
presently provided by Corning. Competition for qualified personnel is intense,
and the process of hiring such qualified personnel can be lengthy. The loss of
the services of key personnel or the inability to attract and retain additional
qualified personnel could have an adverse effect on the Company's operations.
Pursuant to a transition services agreement entered into in connection with the
Recapitalization, Corning is continuing to provide certain administrative
services which it provided prior to the Recapitalization. There can be no
assurance, however, that after the termination of the transition services
agreement (on or before April 1, 2000) that the Company will be able to replace
Corning's services under such agreement for the fees charged by Corning, that
the functions assumed by the Company or to be outsourced to third parties will
not cost significantly in excess of the Company's estimates or that the
provision of such services during the transition period after the
Recapitalization will be performed without interruption or delay due to
unanticipated circumstances. The Company does not maintain key-man life
insurance policies on any of its executives nor has it entered into employment
agreements with any of its executives. See "Management."
 
SEASONALITY
 
    Historically, the Company records its highest sales in its third and fourth
quarters as a result of the buying patterns associated with the holiday selling
season. The Company's need for working capital accelerates in the second half of
the year due to additional merchandising and promotional efforts
 
                                       24
<PAGE>
associated with the holiday selling season and, accordingly, total debt levels
tend to peak in the third and fourth quarters, decreasing in the first quarter
of the following year. The amount of the Company's sales generated during the
second half of the year generally depends upon a number of factors, including
general economic conditions, existing retailer inventory levels and other
factors beyond the Company's control. The Company's results of operations would
be adversely and disproportionately affected if the Company's sales were
substantially lower than those normally expected during the second half of the
year. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations-- Seasonality."
 
INTELLECTUAL PROPERTY
 
    The Company licenses from Corning on an exclusive basis the Corning
Ware-Registered Trademark- trademark, service mark and tradename, the
Pyroceram-Registered Trademark- trademark in the field of housewares and the
Pyrex-Registered Trademark- trademark in the field of durable consumer products
(which includes bakeware) in each case for ten years (each renewable at the
option of the Company on the same terms and conditions for an unlimited number
of successive ten-year terms). The success of the Company's various businesses
depends in part on the Company's ability to use these trademarks, tradenames,
service marks and licenses as well as certain proprietary designs and trademarks
on an exclusive basis in reliance upon the protections afforded by applicable
trademark laws and regulations. In the event of a bankruptcy of Corning or the
Company, the Company's right to use the Corning Ware-Registered Trademark-,
Pyrex-Registered Trademark- and Pyroceram-Registered Trademark- trademarks,
service mark and/or tradename may be limited or terminated during the course of
such bankruptcy proceedings under provisions of bankruptcy law applicable to
contracts such as the license agreement with Corning. The loss of certain of the
Company's rights to such trademarks, tradenames, servicemarks and licenses or
the inability of the Company to effectively protect or enforce such rights could
materially adversely affect the Company. See "Business--Intellectual Property."
 
    On May 12, 1998, the Company received two letters from Rubbermaid
Incorporated alleging that Corning Ware-Registered Trademark- Pop-Ins-TM-
infringe four patents owned by Rubbermaid Incorporated. The letters request that
the Company cease and desist from making, using, offering to sell, and selling
Corning Ware-Registered Trademark- Pop-Ins-TM- and provide to Rubbermaid a full
accounting of sales of such products. The Company is in the process of
investigating the validity of this claim.
 
ENVIRONMENTAL REGULATION
 
    The Company's facilities and operations are subject to certain federal,
state, local and foreign laws and regulations relating to environmental
protection and human health and safety, including those governing wastewater
discharges, air emissions, the use, generation, storage, treatment,
transportation and disposal of hazardous and non-hazardous materials and wastes
and the remediation of contamination associated with such disposal. Certain of
such laws and regulations and their interpretation by regulatory agencies and
courts are complex, may change frequently and historically have become
increasingly stringent. In addition, under certain environmental laws, a current
or previous owner or operator of property may be liable for the costs to remove
or remediate certain hazardous substances or petroleum products on, under or in
such property, without regard to whether the owner or operator knew of, or
caused, the presence of the contaminants, and regardless of whether the
practices that resulted in contamination were legal at the time they occurred.
The presence of, or failure to remediate properly, such contamination may
adversely affect the ability to sell or rent such property or to borrow using
such property as collateral. Owners or operators of such properties, as well as
persons who generate, arrange for the disposal or treatment of, or dispose of
hazardous substances, may be liable for the costs of investigation, remediation
or removal of hazardous substances at or from the properties where such
hazardous substances come to be located, whether or not such facility is owned
or operated by such person. Additionally, claims may be asserted by third
parties for various damages and costs resulting from contamination emanating
from a site owned or operated by, or containing hazardous substances originating
from, the Company. Because of the nature of its business, the Company has
incurred, and
 
                                       25
<PAGE>
will continue to incur, capital and operating expenditures and other costs in
complying with and resolving liabilities under such laws and regulations,
including costs incurred to remediate historic contamination at certain of its
facilities. There can be no assurance that compliance with or liabilities under
such laws and regulations, or the discovery of contamination will not in the
future have a material adverse effect on the Company. See
"Business--Environmental Matters."
 
FRAUDULENT TRANSFER CONSIDERATIONS
 
    The incurrence of indebtedness by the Company, such as the Exchange Notes,
may be subject to review under federal bankruptcy law or relevant state
fraudulent conveyance laws if a bankruptcy case or lawsuit is commenced by or on
behalf of unpaid creditors of the Company. Under these laws, if, in a bankruptcy
or reorganization case or a lawsuit by or on behalf of unpaid creditors of the
Company, a court were to find that, at the time the Company incurred
indebtedness, including indebtedness under the Exchange Notes, (i) the Company
incurred such indebtedness with the intent of hindering, delaying or defrauding
current or future creditors or (ii) (a) the Company received less than
reasonably equivalent value or fair consideration for incurring such
indebtedness and (b) the Company (1) was insolvent or was rendered insolvent by
reason of any of the transactions, (2) was engaged, or about to engage, in a
business or transaction for which its assets remaining with the Company
constituted unreasonably small capital to carry on its business, (3) intended to
incur, or believed that it would incur, debts beyond its ability to pay as such
debts matured (as all of the foregoing terms are defined in or interpreted under
the relevant fraudulent transfer or conveyance statutes) or (4) was a defendant
in an action for money damages, or had a judgment for money damages docketed
against it (if, in either case, after final judgment the judgment is
unsatisfied), then such court could avoid or subordinate the amounts owing under
the Exchange Notes to presently existing and future indebtedness of the Company
and take other actions detrimental to the holders of the Exchange Notes.
 
    The measure of insolvency for purposes of the foregoing considerations will
vary depending upon the law of the jurisdiction that is being applied in any
such proceeding. Generally, however, the Company would be considered insolvent
if, at the time it incurred the indebtedness, either (i) the sum of its debts
(including contingent liabilities) is greater than its assets, at a fair
valuation, or (ii) the present fair saleable value of its assets is less than
the amount required to pay the probable liability on its total existing debts
and liabilities (including contingent liabilities) as they become absolute and
matured. There can be no assurance as to what standards a court would use to
determine whether the Company was solvent at the relevant time, or whether,
whatever standard was used, the Exchange Notes would not be avoided or further
subordinated on another of the grounds set forth above. In rendering their
opinions in connection with the initial financing of the Recapitalization,
counsel for the Company and counsel for the lenders will not express any opinion
as to the applicability of federal or state fraudulent transfer and conveyance
laws.
 
    The Company believes that at the time the indebtedness constituting the
Exchange Notes will be incurred initially by the Company, the Company (i) will
be (a) neither insolvent nor rendered insolvent thereby, (b) in possession of
sufficient capital to run its businesses effectively and (c) incurring debts
within its ability to pay as the same mature or become due and (ii) will have
sufficient assets to satisfy any probable money judgment against it in any
pending action. In reaching the foregoing conclusions, the Company has relied
upon its analyses of internal cash flow projections and estimated values of
assets and liabilities of the Company. There can be no assurance, however, that
a court passing on such questions would reach the same conclusions.
 
ABSENCE OF PUBLIC MARKET
 
    The Exchange Notes are being offered to the holders of the Old Notes. The
Old Notes were offered and sold in May 1998 to a small number of institutional
investors and are eligible for trading in the PORTAL Market.
 
                                       26
<PAGE>
    The Company does not intend to apply for a listing of the Exchange Notes on
a securities exchange. There is currently no established market for the Exchange
Notes and there can be no assurance as to the liquidity of markets that may
develop for the Exchange Notes, the ability of the holders of the Exchange Notes
to sell their Exchange Notes or the price at which such holders would be able to
sell their Exchange Notes. If such markets were to exist, the Exchange Notes
could trade at prices that may be lower than the initial market values thereof
depending on many factors, including prevailing interest rates and the markets
for similar securities. Although there is currently no market for the Exchange
Notes, the Initial Purchasers have advised the Company that they currently
intend to make a market in the Exchange Notes. However, the Initial Purchasers
are not obligated to do so, and any market making with respect to the Exchange
Notes may be discontinued at any time without notice.
 
    The liquidity of, and trading market for, the Exchange Notes also may be
adversely affected by general declines in the market for similar securities.
 
FORWARD-LOOKING STATEMENTS
 
    This Prospectus contains forward-looking statements. Forward-looking
statements are not guarantees of future performance and are subject to risks,
uncertainties and other factors (many of which are beyond the Company's control)
that could cause actual results to differ materially from future results
expressed or implied by such forward-looking statements. Among these statements
are portions of this Prospectus concerning the Company's future operations,
economic performance and financial condition, including the Company's business
strategy and measures to implement such strategy, competitive strengths,
objectives, expansion, growth of the Company's business and operations,
acquisitions and references to future success. The forward-looking statements
regarding such matters are based on certain assumptions and analyses made by the
Company in light of its experience and its perception of historical trends,
current conditions and expected future developments, as well as other factors it
believes are appropriate in the circumstances. Whether actual results and
developments will conform with the Company's expectations and predictions,
however, is subject to a number of risks and uncertainties, in addition to the
risk factors discussed above, including: a global economic slowdown in any one,
or all, of the Company's sales categories; loss of sales as the Company
streamlines and focuses on strategic accounts; unpredictable difficulties or
delays in the development of new product programs; increased difficulties in
obtaining a consistent supply of basic raw materials such as sand, soda ash,
steel or copper and energy inputs such as electrical power or natural gas at
stable pricing levels; development by the Company of an adequate administrative
infrastructure; technological shifts away from the Company's technologies and
core competencies; unforeseen interruptions to the Company's business with its
largest customers resulting from, but not limited to, financial instabilities or
inventory excesses; the effects of extreme changes in monetary and fiscal
policies in the United States and abroad, including extreme currency
fluctuations and unforeseen inflationary pressures such as those recently
experienced by certain Asian economies; drastic and unforeseen price pressures
on the Company's products or significant cost increases that cannot be recovered
through price increases or productivity improvements; significant changes in
interest rates or in the availability of financing for the Company or certain of
its customers; loss of any material intellectual property rights; any
difficulties in obtaining or retaining the management or other human resource
competencies that the Company needs to achieve its business objectives; and
other factors, many of which are beyond the control of the Company.
Consequently, all of the forward-looking statements made in this Prospectus are
qualified by these cautionary statements, and there can be no assurance that the
actual results or developments anticipated by the Company will be realized or,
even if substantially realized, that they will have the expected consequences to
or effects on the Company and its subsidiaries or their business or operations.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations."
 
                                       27
<PAGE>
                              THE RECAPITALIZATION
 
    The following is a summary of the Recapitalization and the material
provisions of the Recapitalization Agreement dated March 2, 1998 among Corning,
the Company, CCPC Acquisition and Borden. This summary does not purport to be
complete and is qualified in its entirety by reference to the Recapitalization
Agreement.
 
RECAPITALIZATION AGREEMENT
 
    The Recapitalization was consummated on April 1, 1998 through (a) the
payment to Corning by the Company of the $472.6 million Cash Dividend and (b)
the purchase by CCPC Acquisition from Corning of 22,080,000 shares of Common
Stock (the "Acquired Shares") owned by Corning for $110.4 million in cash. The
Cash Dividend, together with transaction and financing fees and expenses of $8.0
million paid to Borden for the Recapitalization, approximately $17.0 million to
pay other fees and expenses incurred in connection with the Transactions and
approximately $4.0 million of cash for operations, was financed by the Company
through (i) the issuance and sale to CCPC Acquisition of 1,200,000 shares of the
Junior Preferred Stock for $30.0 million and (ii) the Interim Financing. The
purchase by CCPC Acquisition of the Acquired Shares and the shares of Junior
Preferred Stock was financed through an equity investment in CCPC Acquisition by
BW Holdings from its cash on hand.
 
    The amount of the Cash Dividend is subject to post-closing adjustment based
on the Company's net worth and outstanding indebtedness on the Closing Date. In
addition, the Company has agreed to pay Corning the amount, up to $15.0 million,
by which the cumulative gross margin (net sales minus cost of sales, in each
case adjusted to exclude the effect of certain events) of the Company for the
three year period ended December 31, 2000 exceeds $710.9 million (the
"Contingent Payment").
 
    Immediately prior to the Recapitalization, Corning contributed $124.0
million to the capital of the Company, consisting of the forgiveness of
intercompany indebtedness and the assumption of certain liabilities, including
pension and postretirement benefit obligations and liabilities for workers'
compensation and product liability incidents occurring prior to the Closing
Date. In addition, Corning will contribute $18.5 million related to incremental
incentive programs, of which $1.7 million was paid in the first quarter of 1998.
See Note (a) to the Pro Forma Consolidated Condensed Statement of Operations.
 
    As a result of the Recapitalization, CCPC Acquisition owned 92.0% of the
outstanding shares of Common Stock and Corning holds 8.0% of the outstanding
shares of Common Stock. Under the 1998 Plan, CCPC Acquisition is currently in
the process of selling shares of Common Stock, and the Company is making grants
of options to purchase Common Stock, to certain members of management of the
Company.
 
    For a period of five years after the Closing Date, Corning has agreed that,
with certain exceptions, it will not manufacture, sell or distribute any
products similar to consumer products of the Company. Corning also agreed that
it will not use the Corning-Registered Trademark- trademark in the field of
housewares so long as the licenses granted to the Company for the Corning
Ware-Registered Trademark- and Pyroceram-Registered Trademark- trademarks are in
effect.
 
    For a period of five years after the Closing Date, the Company has agreed to
maintain salary and benefits levels for each employee that are substantially
similar in aggregate economic value to those provided to that employee prior to
the Closing Date. In addition, for one year following the Closing Date the
Company has agreed to maintain: (i) a defined benefit pension plan providing
pension benefits for each employee which are substantially similar in aggregate
economic value to those benefits provided by the Corning Pension Plan (as
defined) as of the Closing Date, and (ii) any pension plan of a foreign
subsidiary in effect on the Closing Date so that each current and former
employee of that subsidiary will have benefits substantially similar in
aggregate economic value to the benefits provided as of the Closing Date.
 
                                       28
<PAGE>
    The Recapitalization Agreement contains representations and warranties
customary for transactions of this nature. The representations and warranties of
Corning survive the Recapitalization for certain specified periods and Corning
has agreed to indemnify CCPC Acquisition and its affiliates (including the
Company) for losses arising from breaches of its representations and warranties,
to the extent such losses are above certain thresholds. The amount of such
indemnification is limited to 40% of the sum of (a) the amount payable to
Corning for the Acquired Shares and (b) the Cash Dividend.
 
    Additionally, Corning has agreed to indemnify CCPC Acquisition and its
affiliates (including the Company) for certain pre-Recapitalization tax and
environmental matters. With respect to certain environmental losses arising from
pre-Recapitalization events, conditions, or matters and as to which notice is
provided within specified time periods, Corning has agreed to indemnify the
Company for (i) 80% of such losses up to an aggregate of $20.0 million and (ii)
100% of such losses in excess of $20.0 million.
 
    See "Management's Discussion and Analysis of Financial Condition and Results
of Operations-- Overview--Separation from Corning; Transaction Related Charges"
and "Certain Relationships and Related Party Transactions" for a description of
certain agreements entered into by the Company with Corning and/or CCPC
Acquisition in connection with the Recapitalization.
 
STOCKHOLDERS' AGREEMENT; REGISTRATION RIGHTS AGREEMENT
 
    The Company, CCPC Acquisition and Corning entered into a Stockholders'
Agreement, dated April 1, 1998 (the "Stockholders' Agreement"). The
Stockholders' Agreement provides for certain restrictions and rights regarding
the transfer of Common Stock, including a right of first refusal in favor of,
first, the Company and, if the Company refuses, then CCPC Acquisition with
respect to Common Stock owned by Corning. After the Closing Date, Corning will
have the right to participate pro rata in certain sales of Common Stock by CCPC
Acquisition (the "Corning Tag Along"), and CCPC Acquisition will have the right
to require Corning to participate pro rata in certain sales of Common Stock by
CCPC Acquisition (the "Corning Drag Along"). In addition, the Stockholders'
Agreement provides Corning with unlimited "piggy back" registration rights and
one demand registration right.
 
    CCPC Acquisition has the right, under certain circumstances and subject to
certain conditions, to require the Company to register under the Securities Act
shares of Common Stock held by it pursuant to a registration rights agreement
entered into on the Closing Date (the "CCPC Acquisition Registration Rights
Agreement") in connection with the Recapitalization. Such registration rights
will generally be available to CCPC Acquisition until registration under the
Securities Act is no longer required to enable it to resell the Common Stock
owned by it without restriction. The CCPC Acquisition Registration Rights
Agreement provides, among other things, that the Company will pay all
registration expenses in connection with the first six demand registrations
requested by CCPC Acquisition and in connection with any registration commenced
by the Company as a primary offering in which CCPC Acquisition participates
through "piggyback" registration rights granted under the CCPC Acquisition
Registration Rights Agreement.
 
                                       29
<PAGE>
                                USE OF PROCEEDS
 
    There will be no proceeds to the Company from the exchange of Notes pursuant
to the Exchange Offer. The net proceeds from the issuance of the Old Notes were
approximately $193.4 million, after deducting fees and expenses related to such
issuance. Such net proceeds were applied to refinance remaining obligations
outstanding under the Interim Financing. For a further discussion of the sources
and uses of funds relating to the Transactions, see "Summary--The Transactions"
and "The Recapitalization."
 
                                 CAPITALIZATION
 
    The following table sets forth the capitalization of the Company as of March
31, 1998 on a historical basis and on a pro forma basis after giving effect to
the Transactions as if they had been consummated on such date. This table should
be read in conjunction with "Use of Proceeds," "Unaudited Pro Forma Financial
Information," "Selected Historical Consolidated Financial and Other Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Company's consolidated financial statements and the notes
thereto included elsewhere in this Prospectus.
 
<TABLE>
<CAPTION>
                                                            AS OF MARCH 31, 1998
                                                          ------------------------
                                                          HISTORICAL   PRO FORMA
                                                          ----------  ------------
                                                           (DOLLARS IN MILLIONS)
<S>                                                       <C>         <C>
Long-term debt (including current portion):
  Revolving Credit Facility(a)..........................          --   $     71.6
  Term Loans............................................          --        200.0
  Old Notes.............................................          --        200.0
  Industrial revenue bonds..............................  $     10.2         10.2
  Due to Corning........................................        96.2           --
                                                          ----------  ------------
      Total long-term debt..............................       106.4        481.8
  Stockholders' equity (deficit)(b).....................       226.7        (69.0)
                                                          ----------  ------------
      Total capitalization..............................  $    333.1   $    412.8
                                                          ----------  ------------
                                                          ----------  ------------
</TABLE>
 
- ------------------------
 
(a) Total borrowings of up to $275.0 million under the Revolving Credit Facility
    are available for working capital and general corporate purposes, including
    $25.0 million for letters of credit. After giving effect to the Transactions
    on a pro forma basis, $203.4 million would have been available as of March
    31, 1998 under the Revolving Credit Facility. On April 9, 1998, the Company
    borrowed $59.6 million under the Revolving Credit Facility in connection
    with the Refinancing and the Company borrowed an additional $12.0 million
    through the date of the closing of the Offering.
 
(b) Upon consummation of the Recapitalization, CCPC Acquisition acquired 92.0%
    of the outstanding shares of Common Stock of the Company for $110.4 million
    and Corning retained 8.0% of the outstanding shares of Common Stock of the
    Company (an implied value of $9.6 million). CCPC Acquisition also acquired
    1,200,000 shares of the Company's Junior Preferred Stock for $30.0 million,
    which is reflected in the pro forma stockholders' equity (deficit).
    Dividends on the Junior Preferred Stock may be paid, at the option of the
    Company, in cash or in additional shares of Junior Preferred Stock. Under
    the 1998 Plan, CCPC Acquisition is currently in the process of selling
    shares of Common Stock, and the Company is making grants of options to
    purchase Common Stock, to certain members of management of the Company.
 
                                       30
<PAGE>
                   UNAUDITED PRO FORMA FINANCIAL INFORMATION
 
    The following unaudited pro forma consolidated condensed financial
information of the Company (the "Pro Forma Financial Information") has been
prepared to give effect to the Transactions. The pro forma adjustments presented
are based upon available information and certain assumptions that the Company
believes are reasonable under the circumstances. The pro forma financial data
exclude the impact of (i) the adjustment to the amount of the Cash Dividend,
(ii) a potential payment to Corning of up to $15.0 million in 2001 in the event
the Company achieves a cumulative gross margin in excess of $710.9 million for
the three-year period ended December 31, 2000, (iii) grants and anticipated
grants of options to purchase Common Stock to management and (iv) approximately
$7.5 million of expenditures to be made over the next three years in
transition-related expenditures as a result of the separation from Corning.
 
    The unaudited pro forma consolidated condensed balance sheet of the Company
as of March 31, 1998 (the "Pro Forma Consolidated Balance Sheet") gives effect
to the Transactions as if they had been consummated on March 31, 1998. The
unaudited pro forma consolidated condensed statements of operations of the
Company for the three months ended March 31, 1998 and for the year ended
December 31, 1997 (the "Pro Forma Consolidated Statements of Operations") give
effect to the Transactions as if they had been consummated on January 1, 1997.
 
    The Pro Forma Financial Information should be read in conjunction with the
historical consolidated financial statements of the Company and notes thereto,
"Selected Historical Consolidated Financial and Other Data," "Management's
Discussion and Analysis of Financial Condition and Results of Operations," "The
Recapitalization" and the other financial information included elsewhere in this
Offering Memorandum. This Pro Forma Financial Information and related notes are
provided for informational purposes only and do not purport to be indicative of
the results that would have actually been obtained had the Transactions been
completed on the dates indicated or that may be expected to occur in the future.
 
                                       31
<PAGE>
                 PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
 
                              AS OF MARCH 31, 1998
 
                                  (UNAUDITED)
                             (DOLLARS IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                      PRO FORMA ADJUSTMENTS
                                                 -------------------------------
                                     HISTORICAL  PRE-RECAPITALIZATION(A) TRANSACTIONS PRO FORMA
                                     ----------  ------------------  -----------  ---------
<S>                                  <C>         <C>                 <C>          <C>
ASSETS
Cash and cash equivalents..........  $    7,421      $   (7,421)      $   4,000(b) $   4,000
Accounts receivable, net of
  allowances.......................      55,267          15,681          --          70,948
Inventories, net...................     150,430          --              --         150,430
Prepaid expenses and other current
  assets...........................       5,249          --              --           5,249
Deferred taxes on income...........       7,799          (2,882)         (4,917)(c)    --
                                     ----------      ----------      -----------  ---------
  Total current assets.............     226,166           5,378            (917)    230,627
                                     ----------      ----------      -----------  ---------
Property and equipment, net........     150,510          --              --         150,510
Deferred taxes on income...........      29,286         (19,601)         37,820(c)    47,505
Goodwill, net of accumulated
  amortization.....................      59,997          --              --          59,997
Other assets.......................      16,339          --              15,000(d)    31,339
                                     ----------      ----------      -----------  ---------
  Total assets.....................  $  482,298      $  (14,223)      $  51,903   $ 519,978
                                     ----------      ----------      -----------  ---------
                                     ----------      ----------      -----------  ---------
 
LIABILITIES AND STOCKHOLDER'S
  EQUITY
 
Debt payable within one year.......  $    1,894          --              --       $   1,894
Accounts payable and accrued
  expenses.........................      67,693      $    8,290          --          75,983
Due to Corning Incorporated........      96,224         (96,224)         --          --
                                     ----------      ----------      -----------  ---------
  Total current liabilities........     165,811         (87,934)         --          77,877
                                     ----------      ----------      -----------  ---------
Long-term debt.....................       8,285          --           $ 471,600(b)   479,885
Accrued postretirement liability...      60,856         (32,589)         --          28,267
Other liabilities..................      20,620         (17,669)         --           2,951
                                     ----------      ----------      -----------  ---------
  Total liabilities................     255,572        (138,192)        471,600     588,980
                                     ----------      ----------      -----------  ---------
 
Stockholder's equity (deficit).....     226,726         123,969        (419,697)(e)   (69,002)
                                     ----------      ----------      -----------  ---------
    Total liabilities and
      stockholder's equity.........  $  482,298      $  (14,223)      $  51,903   $ 519,978
                                     ----------      ----------      -----------  ---------
                                     ----------      ----------      -----------  ---------
</TABLE>
 
          See Notes to Pro Forma Consolidated Condensed Balance Sheet
 
                                       32
<PAGE>
            NOTES TO PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
                              AS OF MARCH 31, 1998
                             (DOLLARS IN THOUSANDS)
 
The pro forma consolidated condensed balance sheet reflects pro forma
adjustments for the Transactions to the Company's historical consolidated
balance sheet as of March 31, 1998. The Transactions have not and will not
impact the historical basis of the Company's assets and liabilities with the
exception of deferred tax amounts.
 
(a) Pre-Recapitalization pro forma adjustments reflect the following:
 
<TABLE>
<S>                                                                <C>
Cash retained by Corning.........................................  $  (7,421)
Liabilities retained by Corning..................................     57,649
Deferred tax on liabilities retained.............................    (22,483)
Intercompany loan forgiveness....................................     96,224
                                                                   ---------
Total pre-Recapitalization adjustments...........................  $ 123,969
                                                                   ---------
                                                                   ---------
</TABLE>
 
   In addition, Corning will contribute $16,735 ($15,681 in cash and $1,054 in
    non-cash) related to incremental incentive programs. See Note (a) to the Pro
    Forma Consolidated Condensed Statement of Operations.
 
(b) The net sources and uses of cash reflect the following:
 
<TABLE>
<S>                                                       <C>
Sources:
  Revolving Credit Facility.............................      $  71,600
  Term Loans............................................        200,000
  Old Notes.............................................        200,000
  Junior Preferred Stock................................         30,000
  Common Stock - CCPC Acquisition.......................        110,400
  Common Stock - Corning................................          9,600
                                                          -----------------
      Total Sources.....................................      $ 621,600
                                                          -----------------
                                                          -----------------
Uses:
  Cash Dividend(1)......................................      $ 472,600
  Stock Acquisition(2)..................................        110,400
  Corning Retained Equity...............................          9,600
  Estimated Transactions fees and expenses(3)...........         25,000
  Increase to operating cash(4).........................          4,000
                                                          -----------------
      Total Uses........................................      $ 621,600
                                                          -----------------
                                                          -----------------
</TABLE>
 
- ------------------------
 
    (1) The Cash Dividend of $472,600 is subject to post-closing adjustment
       based on the Company's net worth and outstanding indebtedness on the
       Closing Date. The Company cannot estimate at this time whether such
       post-closing adjustment, if any, will require an additional payment to
       Corning or a remittance from Corning.
 
    (2) Under the 1998 Plan, CCPC Acquisition is currently in the process of
       selling shares of Common Stock, and the Company is making grants of
       options to purchase Common Stock, to certain members of management of the
       Company, which in each case is not reflected in the Pro Forma Financial
       Information. In the aggregate, the sales of shares of Common Stock by
       CCPC Acquisition and the option grants by the Company will represent
       approximately 12.4% of the Company's fully diluted Common Stock.
 
    (3) Includes initial purchasers' discount and offering discount on the
       Notes, fees related to the Credit Facilities and other fees and expenses
       incurred in connection with the Transactions.
 
    (4) Represents the $21,000 increase to the Company's cash balances at the
       time of the Recapitalization, net of the application of $17,000 of such
       balances to pay estimated Transactions fees and expenses in connection
       with the Refinancing. See "Summary-The Transactions."
 
                                       33
<PAGE>
      NOTES TO PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET (CONTINUED)
                              AS OF MARCH 31, 1998
                             (DOLLARS IN THOUSANDS)
 
(c) Represents net current and non-current deferred taxes of $32,903 on the
    estimated increase in tax basis of fixed assets and intangibles as a result
    of the Section 338(h)(10) election made in connection with the
    Recapitalization.
 
(d) Represents the portion of the estimated Transactions fees and expenses that
    has been recorded as deferred financing costs and will be amortized over the
    weighted average life of the related indebtedness.
 
(e) Represents an aggregate net change as a result of the Recapitalization:
 
<TABLE>
<S>                                                               <C>
Cash Dividend...................................................  $(472,600)
Issuance of Preferred Stock.....................................     30,000
Net deferred tax asset for tax basis step-up....................     32,903
Estimated Transactions fees and expenses(1).....................    (10,000)
                                                                  ---------
      Total.....................................................  $(419,697)
                                                                  ---------
                                                                  ---------
</TABLE>
 
- ------------------------
 
    (1) Represents the portion of the total $25,000 of estimated Transactions
       fees and expenses which has been recorded as an expense. Transactions
       fees and expenses consist of (i) legal, accounting and investment banking
       fees, certain taxes and other expenses, (ii) transaction and financing
       fees and expenses payable to Borden and (iii) miscellaneous fees and
       expenses such as printing and filing fees.
 
                                       34
<PAGE>
            PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
 
                   FOR THE THREE MONTHS ENDED MARCH 31, 1998
                                  (UNAUDITED)
                (DOLLARS IN THOUSANDS, EXCEPT SHARE INFORMATION)
 
<TABLE>
<CAPTION>
                                                                                   PRO FORMA
                                                                 HISTORICAL      ADJUSTMENTS(A)      PRO FORMA
                                                               --------------  ------------------  --------------
<S>                                                            <C>             <C>                 <C>
Net sales....................................................  $      116,538          --          $      116,538
Cost of sales................................................          77,761     $       (664)(b)         77,097
                                                               --------------         --------     --------------
Gross margin.................................................          38,777              664             39,441
Selling, general, administrative and research and development
  expenses...................................................          37,130             (398)(c)         36,732
Transactions related expenses................................           1,384           (1,384)(e)       --
Other, net...................................................             576                                 576
                                                               --------------         --------     --------------
Operating income (loss)......................................            (313)           2,446              2,133
Interest expense, net........................................           1,574            9,107(f)          10,681
                                                               --------------         --------     --------------
Income (loss) before taxes on income.........................          (1,887)          (6,661)            (8,548)
Income tax expense (benefit).................................           1,731           (2,664)(g)           (933)
                                                               --------------         --------     --------------
Income (loss) before minority interest.......................          (3,618)          (3,997)            (7,615)
Minority interest in earnings of a subsidiary................              36          --                      36
                                                               --------------         --------     --------------
Net income (loss)............................................  $       (3,582)    $     (3,997)    $       (7,579)
                                                               --------------         --------     --------------
                                                               --------------         --------     --------------
OTHER DATA:
EBITDA (h)...................................................  $        8,676                      $       11,122
EBITDA margin................................................             7.4%                                9.5%
Interest expense (i).........................................  $        1,622                      $       10,239
Depreciation and amortization................................           8,989                               8,989
Capital expenditures.........................................           7,858                               7,858
Ratio of earnings to fixed charges(j)........................            0.4x                                0.3x
Ratio of earnings to combined fixed charges and preferred
  stock dividends(j).........................................              NA                                0.3x
 
SHARE INFORMATION(k)
Basic and diluted loss per common share......................  $        (0.15)                     $        (0.32)
Weighted average number of common shares outstanding during
  the period.................................................      24,000,000                          24,000,000
</TABLE>
 
     See Notes to Pro Forma Consolidated Condensed Statements of Operations
 
                                       35
<PAGE>
            PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
 
                      FOR THE YEAR ENDED DECEMBER 31, 1997
                                  (UNAUDITED)
                (DOLLARS IN THOUSANDS, EXCEPT SHARE INFORMATION)
 
<TABLE>
<CAPTION>
                                                                                   PRO FORMA
                                                                 HISTORICAL      ADJUSTMENTS(A)      PRO FORMA
                                                               --------------  ------------------  --------------
<S>                                                            <C>             <C>                 <C>
Net sales....................................................  $      572,860          --          $      572,860
Cost of sales................................................         376,960     $     (2,657)(b)        374,303
                                                               --------------         --------     --------------
Gross margin.................................................         195,900            2,657            198,557
Selling, general, administrative and research and development
  expenses...................................................         137,315            6,899(c)         144,214
Other corporate administrative expenses......................          18,408          (18,408)(d)       --
Other, net...................................................           5,629           (5,231)(e)            398
                                                               --------------         --------     --------------
Operating income.............................................          34,548           19,397             53,945
Interest expense, net........................................           8,481           34,311(f)          42,792
                                                               --------------         --------     --------------
Income (loss) before taxes on income.........................          26,067          (14,914)            11,153
Income tax expense (benefit).................................          12,734           (5,965)(g)          6,769
                                                               --------------         --------     --------------
Income (loss) before minority interest.......................          13,333           (8,949)             4,384
Minority interest in earnings of a subsidiary................            (295)         --                    (295)
                                                               --------------         --------     --------------
Net income (loss)............................................  $       13,038     $     (8,949)    $        4,089
                                                               --------------         --------     --------------
                                                               --------------         --------     --------------
OTHER DATA:
EBITDA (h)...................................................  $       70,254                      $       89,651
EBITDA margin................................................            12.3%                               15.7%
Interest expense (i).........................................  $        8,974                      $       41,023
Depreciation and amortization................................          35,706                              35,706
Capital expenditures.........................................          28,600                              28,600
Ratio of earnings to fixed charges(j)........................            2.4x                                1.2x
Ratio of earnings to combined fixed charges and preferred
  stock dividends(j).........................................              NA                                1.0x
 
SHARE INFORMATION(k)
Basic and diluted earnings per common share..................  $         0.54                      $         0.17
Weighted average number of common shares outstanding during
  the period.................................................      24,000,000                          24,000,000
</TABLE>
 
     See Notes to Pro Forma Consolidated Condensed Statements of Operations
 
                                       36
<PAGE>
       NOTES TO PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
 
                   FOR THE THREE MONTHS ENDED MARCH 31, 1998
                      AND THE YEAR ENDED DECEMBER 31, 1997
                             (DOLLARS IN THOUSANDS)
 
(a) In connection with the Recapitalization, certain current employees of the
    Company and certain union employees of Corning who accepted employment with
    the Company received and will receive cash and non-cash benefits of $16,735
    ($15,681 in cash and $1,054 in non-cash) following the Closing Date in
    addition to the $1,733 paid in the first quarter of 1998. The Company will
    make these cash payments over the next two years and Corning will contribute
    $17,414 in cash to the Company over the same period. Since the preponderance
    of the payments represents consideration that is for future services
    rendered to the Company, the related compensation expense is being recorded
    primarily subsequent to the Closing Date and to a lesser extent was recorded
    on or prior to the Closing Date. This charge has not been reflected in the
    Pro Forma Consolidated Condensed Statements of Operations due to its
    unusual, nonrecurring nature.
 
(b) Reflects the estimated decrease in cost of sales and selling, general,
    administrative and research and development expenses, respectively, as a
    result of Corning's retention of certain pension and postretirement
    obligations which arose prior to the Recapitalization as follows:
 
<TABLE>
<CAPTION>
                                                            THREE MONTHS
                                                                ENDED
                                                              MARCH 31,         YEAR ENDED
                                                                1998         DECEMBER 31, 1997
                                                           ---------------  -------------------
<S>                                                        <C>              <C>
Cost of sales............................................     $     664          $   2,657
Selling, general, administrative and research and
  development expenses...................................           336              1,346
</TABLE>
 
(c) Reflects a net (decrease) increase in selling, general, administrative and
    research and development expenses as follows:
 
<TABLE>
<CAPTION>
                                                            THREE MONTHS
                                                                ENDED
                                                              MARCH 31,         YEAR ENDED
                                                                1998         DECEMBER 31, 1997
                                                           ---------------  -------------------
<S>                                                        <C>              <C>
Benefit expense reduction (see Note (b)).................     $    (336)         $  (1,346)
Estimated cost of replacing Corning administrative
  services (see Note (d))................................            --              6,745
Management fee to be paid to Borden (see Note (d)).......           (62)(1)          1,500
                                                                 ------            -------
                                                              $    (398)         $   6,899
                                                                 ------            -------
                                                                 ------            -------
</TABLE>
 
- ------------------------
 
    (1) Reflects the difference between the management fee charged by Corning
       ($437) for the three months ended March 31, 1998 and the quarterly
       management fee to be charged by Borden ($375).
 
(d) Prior to the Recapitalization, Corning provided the Company with certain
    administrative services which were not readily allocated to individual
    transactions or events, such as legal, treasury and tax functions. For these
    services the Company paid Corning the charges recorded as "Other corporate
    administrative expenses," which charges were based on a percentage of the
    Company's budgeted
 
                                       37
<PAGE>
 NOTES TO PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (CONTINUED)
 
                   FOR THE THREE MONTHS ENDED MARCH 31, 1998
                      AND THE YEAR ENDED DECEMBER 31, 1997
                             (DOLLARS IN THOUSANDS)
 
    sales. "Other corporate administrative expenses" were $18,408 in 1997.
    Commencing on January 1, 1998, Corning provided these services to the
    Company on the basis of a service agreement containing terms similar to that
    entered into on the date of the Recapitalization and expenses incurred under
    such agreement were reflected as selling, general and administrative and
    research and development expenses. Under the transition services agreement
    with Corning entered into on the date of the Recapitalization, Corning will
    continue for a two-year period to provide a portion of these services at
    negotiated rates. In addition, the Company is developing its administrative
    infrastructure and certain of these functions will be assumed by the Company
    or performed by third parties. The Company anticipates that the performance
    of these administrative services (which are accounted for as selling,
    general, administrative and research and development expenses following the
    Recapitalization) as well as additional expenses associated with external
    auditing and periodic filings with the Commission will cost the Company
    (including amounts to be paid to Corning) approximately $6,745 per year, or
    $1,686 per quarter, after the Recapitalization.
 
   In addition, prior to the Recapitalization, Corning performed, and under the
    transition services agreement continues to perform, certain process-oriented
    administrative support services, such as benefits administration, accounts
    payable and accounts receivable functions. Corning has agreed pursuant to
    the transition services agreement to continue to provide such services for
    up to two years following the Recapitalization at rates calculated on the
    same basis as before the Recapitalization. The Company expensed $19,201 for
    these services in 1997. These services will continue to be reflected as
    expenses on the same terms as prior to the Recapitalization and therefore no
    pro forma adjustment in respect of the expenses is reflected in the Pro
    Forma Financial Information.
 
   There can be no assurance, that after the termination of the transition
    services agreement the Company will be able to replace Corning's services
    under the transition services agreement for the fees charged by Corning.
    Under the administrative services agreement the Company and Corning will
    continue to provide to one another certain services internationally at
    negotiated rates for up to two years. In addition, the Company will pay
    $1,500 per year, or $375 per quarter, to Borden for management services
    following the Recapitalization.
 
(e) For the year ended December 31, 1997, reflects a reduction for non-recurring
    expenses of $4,476 related to incremental incentive payments made to
    employees during the sale of the Company, $731 for sales commissions paid to
    certain Corning subsidiaries that will no longer be incurred following the
    Recapitalization and miscellaneous expenses. For the three months ended
    March 31, 1998, represents $1,384 of expenses incurred in connection with
    the sale of the Company.
 
                                       38
<PAGE>
 NOTES TO PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (CONTINUED)
 
                   FOR THE THREE MONTHS ENDED MARCH 31, 1998
                      AND THE YEAR ENDED DECEMBER 31, 1997
                             (DOLLARS IN THOUSANDS)
 
(f)  Pro forma interest expense reflects the following:
 
<TABLE>
<CAPTION>
                                                            THREE MONTHS
                                                               ENDED
                                                             MARCH 31,         YEAR ENDED
                                                                1998        DECEMBER 31, 1997
                                                           --------------  -------------------
<S>                                                        <C>             <C>
Revolving Credit Facility ($71,600 at 7.40%).............    $    1,325        $     5,298
Term Loan ($200,000 at 7.65%)............................         3,825             15,300
Senior Subordinated Notes ($200,000 at 9.625%)...........         4,812             19,250
Amortization of deferred financing, debt discount and
  unused credit line fees................................           633              2,532
                                                           --------------         --------
                                                                 10,595             42,380
Less: Non-recurring historical interest expense, net.....         1,488              8,069
                                                           --------------         --------
                                                             $    9,107        $    34,311
                                                           --------------         --------
                                                           --------------         --------
</TABLE>
 
   A 0.125% increase or decrease in the weighted average interest rate would
    change interest expense by $148 for the three months ended March 31, 1998
    and $590 for the year ended December 31, 1997. Each $5,000 increase or
    decrease in borrowings under the Revolving Credit Facility would change pro
    forma interest expense by $88 for the three months ended March 31, 1998 and
    $351 for the year ended December 31, 1997.
 
(g) Reflects the pro forma adjustments assuming a 40% effective income tax rate.
 
(h) EBITDA represents operating income plus depreciation and amortization.
    EBITDA is presented because management understands that such information is
    considered by certain investors to be an additional basis for evaluating the
    Company's ability to pay interest and repay debt. EBITDA should not be
    considered an alternative to measures of operating performance as determined
    in accordance with generally accepted accounting principles, including net
    income, as a measure of the Company's operating results and cash flows or as
    a measure of the Company's liquidity. Because EBITDA is not calculated
    identically by all companies, the presentation herein may not be comparable
    to other similarly titled measures of other companies.
 
(i)  Interest expense represents interest expense exclusive of amortization of
    deferred financing fees and the debt discount.
 
(j)  For purposes of these computations, earnings consist of income (loss)
    before taxes on income plus fixed charges (exclusive of capitalized
    interest). Fixed charges consist of interest expense, whether capitalized or
    expensed, including deferred financing costs and one-third of rental
    expenses (the portion deemed representative of the interest factor). For
    purposes of the computation of the ratio of earnings to combined fixed
    charges and preferred stock dividends, the preferred stock dividend
    requirements were increased by an amount representing the pre-tax earnings
    which are required to cover such dividend requirements. For the three months
    ended March 31, 1998, the deficiency of earnings to fixed charges was $2.1
    on a historical basis and $8.6 on a pro forma basis. For the same period,
    the deficiency of pro forma earnings to combined fixed charges and preferred
    stock dividends was $10.9.
 
(k) Basic and diluted earnings (loss) per common share is calculated by dividing
    net income by the weighted average number of common shares outstanding
    during the period.
 
                                       39
<PAGE>
           SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA
 
    The following table sets forth selected historical consolidated financial
and other data of the Company. The historical consolidated financial and other
data for the three years ended December 31, 1997 and as of December 31, 1997 and
December 31, 1996 have been derived from, and should be read in conjunction
with, the consolidated financial statements of the Company and notes thereto
which have been audited by Price Waterhouse LLP, independent accountants, and
which are included elsewhere in this Prospectus. The historical consolidated
financial and other data for the year ended December 31, 1994 and as of December
31, 1994 and 1995 have been derived from the consolidated financial statements
of the Company which have been audited by Price Waterhouse LLP, but which are
not contained herein. The historical consolidated financial and other data for
the three months ended March 31, 1998 and 1997 have been derived from, and
should be read in conjunction with the unaudited financial statements of the
Company and the notes thereto which are included elsewhere in this Prospectus.
Results for the quarter ended March 31, 1998 are not necessarily indicative of
results that can be expected for the year ended December 31, 1998. The
historical consolidated financial and other data for the year ended December 31,
1993 and as of December 31, 1993 have been derived from unaudited consolidated
financial statements of the Company, which are not contained herein. In the
opinion of management, all adjustments, consisting of only normal recurring
adjustments, considered necessary for a fair presentation have been included in
the unaudited consolidated financial statements of the Company. See "Unaudited
Pro Forma Financial Information," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the historical consolidated
financial statements of the Company and the notes thereto included elsewhere in
this Prospectus.
 
                                       40
<PAGE>
<TABLE>
<CAPTION>
                                         THREE MONTHS ENDED
                                             MARCH 31,                              YEAR ENDED DECEMBER 31,
                                     --------------------------  -------------------------------------------------------------
<S>                                  <C>            <C>          <C>        <C>        <C>        <C>          <C>
                                         1998          1997        1997       1996       1995       1994(1)     1993(1)(2)(3)
                                     -------------  -----------  ---------  ---------  ---------  -----------  ---------------
 
<CAPTION>
                                                                       (DOLLARS IN MILLIONS)
<S>                                  <C>            <C>          <C>        <C>        <C>        <C>          <C>
STATEMENT OF OPERATIONS DATA:
Net sales(4).......................    $   116.5     $   128.3   $   572.9  $   632.4  $   608.7   $   608.2      $   563.8
Cost of sales......................         77.7          83.6       377.0      435.9      431.2       406.7          407.3
                                     -------------  -----------  ---------  ---------  ---------  -----------       -------
Gross profit.......................         38.8          44.7       195.9      196.5      177.5       201.5          156.5
Selling, general, administrative
  and research and development
  expenses.........................         37.1          32.8       137.3      154.2      168.2       147.8          141.1
Other corporate administrative
  expense(5).......................           --           4.6        18.4       20.9       20.0        21.5           29.2
Provision for restructuring
  costs(6).........................           --            --          --        2.1         --        10.5           25.1
Transactions related expenses(7)...          1.4            --          --         --         --          --             --
Goodwill amortization..............          0.4           0.4         1.7        1.7        1.7         1.5             --
Other, net(8)......................          0.4           0.4         5.9        0.6        0.4         0.3           10.8
Royalty income.....................         (0.2)         (0.2)       (2.0)      (1.6)      (1.6)       (0.9)          (1.0)
                                     -------------  -----------  ---------  ---------  ---------  -----------       -------
Operating income (loss)............         (0.3)          6.7        34.6       18.6      (11.2)       20.8          (48.7)
Interest expense, net..............          1.6           2.1         8.5       10.7        8.8        10.0            9.9
                                     -------------  -----------  ---------  ---------  ---------  -----------       -------
Income (loss) before taxes on
  income...........................         (1.9)          4.6        26.1        7.9      (20.0)       10.8          (58.6)
Income tax expense (benefit).......          1.7           2.8        12.8        6.2       (1.6)        4.3          (21.6)
                                     -------------  -----------  ---------  ---------  ---------  -----------       -------
Income (loss) before minority
  interest.........................         (3.6)          1.8        13.3        1.7      (18.4)        6.5          (37.0)
Net income (loss)..................    $    (3.6)    $     1.8   $    13.0  $     1.6  $   (18.5)  $     6.5      $   (37.0)
                                     -------------  -----------  ---------  ---------  ---------  -----------       -------
                                     -------------  -----------  ---------  ---------  ---------  -----------       -------
 
OTHER FINANCIAL DATA:
Gross margin.......................         33.3%         34.8%       34.2%      31.1%      29.2%       33.1%          27.8%
Operating margin...................         (0.3)%         5.2%        6.0%       2.9%      (1.8%        3.4%          (8.6)%
Depreciation and amortization......    $     9.0     $    10.3   $    35.7  $    35.8  $    32.0   $    29.1      $    30.0
Capital expenditures...............          7.9           4.1        28.6       35.8       40.6        31.3           23.0
Interest expense...................          1.6           2.5         9.0       12.4       11.0        11.9           11.3
EBITDA(9)..........................          8.7          17.0        70.3       54.4       20.8        49.9          (18.7)
Adjusted EBITDA(10)................         10.1          19.9        86.5       70.7       34.1        75.2           28.9
Adjusted EBITDA margin.............          8.7%         15.5%       15.1%      11.2%       5.6%       12.4%          5.1%
Ratio of earnings to fixed
  charges(11)......................         0.4x          2.0x        2.4x       1.3x         --        1.5x             --
 
BALANCE SHEET DATA (at end of
  period):
Net working capital................    $    60.4     $    41.2   $    59.9  $    32.1  $    23.2   $    60.7      $    32.6
Adjusted working capital(12).......        159.9         178.0       156.1      163.3      173.6       173.1          122.6
Total assets.......................        482.3         507.9       483.6      516.4      533.6       523.5          398.6
Total debt(13).....................        106.4         119.3        97.4      110.6      134.1        88.4           79.9
Total stockholder's equity.........        226.7         220.1       230.1      217.7      215.2       233.8          145.6
 
CASH FLOW DATA:
Cash flows from operating
  activities.......................    $     1.7     $    (5.9)  $    37.8  $    57.0  $     1.0   $    (2.7)           N/A
Cash flows from investing
  activities.......................         (7.7)         (4.2)      (26.2)     (35.6)     (42.9)      (28.9)           N/A
Cash flows from financing
  activities.......................          9.1           9.5       (14.3)     (23.5)      42.7        25.1            N/A
</TABLE>
 
- ------------------------------
 
(1) Results exclude the results of the European, Russian, Middle Eastern and
    African business that was sold in November 1994. As a result of this
    transaction, the Company currently participates to a limited extent in the
    European, Russian, Middle Eastern and African markets through exclusive
    distributor and supply agreements with certain subsidiaries of Newell. See
    "Business--Distribution Channels--European, Russian, Middle Eastern and
    African Consumer Products Business." Sales and net income of the business
    excluded were $46.4 million and $3.1 million in 1994 and $51.1 million and
    $5.4 million in 1993.
 
(2) On January 3, 1993, Corning approved a restructuring plan to exit businesses
    and operations in Brazil which were controlled by the Company. In addition
    to consumer products, this operation produced and sold products in
    non-consumer categories with aggregate sales of $10.8 million and operating
    income of $3.2 million. The operating results of this business are
    consolidated in 1993.
 
(3) Cash flows from operating, investing and financing activities not available.
 
                                       41
<PAGE>
(4) Gross sales (before deductions for trade allowances, customer-paid freight
    and discounts) were $124.7 million, $139.3 million, $616.7 million, $690.0
    million and $668.5 million for the three months ended March 31, 1998 and
    1997, and the years ended December 31, 1997, 1996 and 1995, respectively.
 
(5) Other corporate administrative expenses represent an allocation of corporate
    charges from Corning to the Company in respect of certain administrative
    services provided to the Company by Corning. Corning calculated these
    charges as a percentage of the Company's budgeted sales.
 
(6) The Company incurred net provisions for restructuring costs of $2.1 million
    ($4.2 million of gross charges offset by a $2.1 million reversal of existing
    reserves), $10.5 million and $25.1 million in 1996, 1994 and 1993,
    respectively. The 1996 restructuring charges resulted from the
    implementation of the Business Redesign Program. The major components of the
    1996 charges were (i) costs related to a reduction in the number of SG&A and
    manufacturing employees and (ii) expenses incurred to close under-performing
    outlet stores. In 1994, the Company recorded a charge for a Company-wide
    program to reduce overhead and manufacturing costs. The charge was comprised
    of severance and voluntary retirement to reduce the number of employees. The
    1993 restructuring charges were associated with a Company-wide restructuring
    program to reduce costs and are comprised of certain asset reductions and
    reserve provisions recorded in connection with such program.
 
(7) Reflects expenses incurred in connection with the Transactions.
 
(8) Other charges include miscellaneous expenses and miscellaneous income.
    Included in the 1997 amount are $4.5 million of expenses related to
    incremental incentive payments made to employees during the sale of the
    Company.
 
(9) EBITDA represents operating income (loss) plus depreciation and
    amortization. EBITDA is presented because management understands that such
    information is considered by certain investors to be an additional basis for
    evaluating the Company's ability to pay interest and repay debt. EBITDA
    should not be considered an alternative to measures of operating performance
    as determined in accordance with generally accepted accounting principles,
    including net income, as a measure of the Company's operating results and
    cash flows or as a measure of the Company's liquidity. Because EBITDA is not
    calculated identically by all companies, the presentation herein may not be
    comparable to other similarly titled measures of other companies.
 
(10) Adjusted EBITDA represents EBITDA less adjustments to eliminate (i) other
    corporate administrative expenses for certain services performed by Corning
    for the Company; (ii) expenses related to incremental incentive payments
    made to employees during the sale of the Company; (iii) expenses incurred in
    connection with the Transactions; and (iv) provisions for restructuring
    costs, net of (v) adjustments for expenses expected to be incurred by the
    Company to replace the services previously performed by Corning described in
    clause (i) above.
 
<TABLE>
<CAPTION>
                                                        THREE MONTHS
                                                           ENDED                               YEAR ENDED
                                                         MARCH 31,                            DECEMBER 31,
                                                    --------------------  -----------------------------------------------------
                                                      1998       1997       1997       1996       1995       1994       1993
                                                    ---------  ---------  ---------  ---------  ---------  ---------  ---------
<S>                                                 <C>        <C>        <C>        <C>        <C>        <C>        <C>
    EBITDA........................................  $     8.7  $    17.0  $    70.3  $    54.4  $    20.8  $    49.9  $   (18.7)
    Other corporate administrative expenses (See
      Note 5).....................................         --        4.6       18.4       20.9       20.0       21.5       29.2
    Incentive payment expenses (See Note 8).......         --         --        4.5         --         --         --         --
    Provision for restructuring costs (See Note
      6)..........................................         --         --         --        2.1         --       10.5       25.1
    Addition to SG&A..............................         --       (1.7)      (6.7)      (6.7)      (6.7)      (6.7)      (6.7)
    Transactions related expenses (See Note 7)....        1.4         --         --         --         --         --         --
                                                    ---------  ---------  ---------  ---------  ---------  ---------  ---------
    Adjusted EBITDA...............................  $    10.1  $    19.9  $    86.5  $    70.7  $    34.1  $    75.2  $    28.9
                                                    ---------  ---------  ---------  ---------  ---------  ---------  ---------
                                                    ---------  ---------  ---------  ---------  ---------  ---------  ---------
</TABLE>
 
   For a more complete description of the services performed by Corning after
    the Recapitalization and the ability of the Company to achieve such cost
    savings, see "Risk Factors--No Prior Operations as an Independent Company"
    and "Management's Discussion and Analysis of Financial Condition and Results
    of Operations--Overview--Separation from Corning; Transaction Related
    Charges."
 
(11) For the purposes of computing the ratio of earnings to fixed charges,
    earnings consist of income before taxes on income, minority interest on
    earnings of a subsidiary, plus fixed charges (excluding capitalized
    interest). Fixed charges consist of interest (whether capitalized or
    expensed), including deferred financing costs and one-third of rental
    expenses (the portion deemed representative of the interest factor). For the
    years ended 1995 and 1993, the deficiency of earnings to fixed charges was
    $21.7 million and $59.6 million, respectively. For the three months ended
    March 31, 1998, the deficiency of earnings to fixed charges was $2.1
    million.
 
(12) Adjusted working capital is calculated as (i) current assets excluding cash
    and amounts due from Corning, less (ii) current liabilities excluding debt,
    amounts due to Corning and payables to be reimbursed by Corning.
 
(13) As of March 31, 1998 on a historical basis, total debt included $10.2
    million of industrial revenue bonds and $96.2 million due to Corning under a
    $200.0 million intercompany revolving credit facility previously provided by
    Corning.
 
                                       42
<PAGE>
               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS
 
    The following discussion and analysis of the Company's financial condition
and results of operations covers periods prior to the consummation of the
Transactions. Accordingly, the discussion and analysis of historical periods
does not reflect the significant impact that the Transactions will have on the
Company, including significantly increased leverage and liquidity requirements.
See "Risk Factors," "Selected Consolidated Historical Financial and Other Data,"
"Unaudited Pro Forma Financial Information" and "--Liquidity and Capital
Resources" as well as the consolidated financial statements of the Company and
the notes thereto contained elsewhere in this Prospectus.
 
OVERVIEW
 
    BUSINESS REDESIGN PROGRAM.  In response to a period of low profitability in
the early 1990s, the Company, led by a new management team, began implementing
its Business Redesign Program in the second quarter of 1996 to, first,
streamline the Company's business to focus on profitable products and customers
while reducing the Company's cost structure and, second, adopt initiatives to
increase sales while maintaining and improving upon the cost efficiencies
achieved in the first phase of the Business Redesign Program. The first phase of
the Business Redesign Program, which is largely complete, focused on eliminating
low volume, low profit products and customers, reducing manufacturing costs and
reducing SG&A. From 1995 to 1997, the first phase of the Business Redesign
Program has achieved improvements in gross margins from 29% to 34% and operating
margin from (2)% to 6%. The first phase of the Business Redesign Program has
included the following initiatives:
 
    - FOCUS ON PROFITABLE PRODUCTS AND CUSTOMERS. The Company has refocused its
      sales efforts on higher margin products and profitable customer accounts
      while continuing to actively manage its product assortment and customer
      base. To eliminate low volume, low profit products, the Company has
      instituted a process of continually evaluating the profitability of its
      SKUs. This process includes examining volume, gross and operating profit
      and inventory carrying costs. As a result of this process, the number of
      SKUs distributed by the Company has been reduced by 55%, from 3,088 at the
      end of 1995 to 1,403 at December 31, 1997. In addition, based on analyses
      of customer account profitability, the number of customers directly served
      by the Company has been reduced by 43%, from approximately 1,048 at the
      end of 1995, to approximately 599 at December 31, 1997. The discontinued
      accounts were generally low volume customers, many of which were
      transferred to distributors.
 
    - REDUCE MANUFACTURING COSTS.  From 1995 to the first quarter of fiscal
      1998, the Company implemented systematic productivity improvements which
      concentrated on reducing labor, materials and overhead costs primarily
      through (i) process simplification, (ii) better process control and
      discipline, (iii) workforce productivity improvements and (iv) improved
      raw material sourcing. As a result of implementing the foregoing, the
      Company has been able to reduce the number of manufacturing employees by
      26%, from 2,629 at the end of 1995 to 1,955 at December 31, 1997.
 
    - REDUCE SG&A COSTS.  The Company has reduced its SG&A expenses by $30.9
      million from 1995 to 1997. These reductions were realized primarily
      through the redesign of sales and administrative functions and the refocus
      of the Company's advertising program on print rather than media
      advertising as part of the Business Redesign Program. As a result of these
      initiatives, the number of SG&A employees was reduced from 1,284 in 1995
      to 1,141 in 1997 and SG&A expenses (excluding those estimated by
      management to be attributable to Company-operated outlet stores) declined
      from 21.9% of 1995 gross sales to 16.5% of 1997 gross sales.
 
    - IMPROVE CUSTOMER SERVICE.  To improve customer service, the Company has
      reorganized its sales force to better align account representatives with
      specific customers' needs and has implemented an integrated supply chain
      management process which utilizes enhanced information systems to predict
      customers' future inventory requirements and permit the Company to
 
                                       43
<PAGE>
      maintain a more efficient allocation between finished goods and
      work-in-process inventory. The Company's supply chain management process
      also enables the Company to improve the accuracy and timeliness of filling
      customer orders and is intended to allow the Company and its customers to
      reduce finished goods inventory. Since the end of 1995, the Company's
      average on-time delivery rate has improved from approximately 75% to
      approximately 95% as of December 31, 1997.
 
    The Company made capital expenditures of $6.1 million and $2.3 million in
1996 and 1997 on programs related to the Business Redesign Program. In addition,
in 1996 the Company recorded a $4.2 million provision for restructuring costs
related to the Business Redesign Program (offset in part by a $2.1 million
reversal of an existing provision). The Company intends to actively pursue
opportunities to achieve further cost reductions in its manufacturing operations
through additional productivity improvements and streamlining of manufacturing
processes, which may result in charges in future periods.
 
    RESULTS - SECOND HALF OF 1997.  For the second half of 1997, the Company
recorded net sales, operating income and EBITDA of $319.0 million, $24.4 million
and $41.6 million, respectively, compared to $366.7 million, $31.0 million and
$49.7 million for the second half of 1996. The decline in net sales in the
second half of 1997 was partly attributable to planned reductions associated
with the Company's strategic decision to focus on profitable customers and
products as part of the Business Redesign Program. However, in addition, the
Company's financial performance was adversely affected by (i) loss of shelf
space and lower retailer participation in promotional programs, (ii) unexpected
inventory reductions by certain key customers, (iii) significantly lower sales
in parts of Asia resulting from the recent economic disruptions in that region
and (iv) the liquidation or bankruptcy of certain of the Company's key
customers. The Company believes that the loss of shelf space in 1997 was
primarily due to a lack of new products (other than product line extensions and
renewals) being introduced to retailer customers in the fall of 1996, which is
the period when key customers were finalizing plan-o-grams for the 1997 selling
season. In addition, retailer strategy changes and disruptions caused by a
reorganization of the sales force contributed to the decline in shelf space. In
response to these developments, the Company accelerated the development of new
products, improved its supply chain management and focused on strategic accounts
to improve results in 1998.
 
    SEPARATION FROM CORNING; TRANSACTION RELATED CHARGES.  Prior to the
Recapitalization, the Company operated as a wholly owned subsidiary of Corning.
During this period, Corning provided the Company with certain administrative
services which were not readily allocated to individual transactions or events,
such as legal, treasury and tax functions. For these services the Company paid
Corning the charges recorded as "Other corporate administrative expenses," which
charges were based on a percentage of the Company's budgeted sales. "Other
corporate administrative expenses" were $18.4 million, $20.9 million and $20.0
million in 1997, 1996 and 1995, respectively. Under the transition services
agreement with Corning entered into on the date of the Recapitalization, Corning
will continue for a two-year period to provide a portion of these services at
negotiated rates. In addition, the Company is developing its administrative
infrastructure and certain of these functions will be assumed by the Company or
performed by third parties. The Company anticipates that the performance of
these administrative services (which are accounted as SG&A following the
Recapitalization) as well as additional expenses associated with external
auditing and periodic filings with the Commission will cost the Company
(including amounts to be paid to Corning) approximately $6.7 million per year
after the Recapitalization.
 
    In addition, prior to the Recapitalization, Corning performed, and under the
transition services agreement continues to perform, certain process-oriented
administrative support services, such as benefits administration, accounts
payable and accounts receivable functions. Corning has agreed pursuant to the
transition services agreement to continue to provide such services for up to two
years at rates calculated on the same basis as before the Recapitalization. The
Company expensed $19.2 million for these services in 1997. These services will
continue to be reflected as expenses on the same terms as prior to the
Recapitalization.
 
                                       44
<PAGE>
    The Company believes that prior to the termination of the transition
services agreement it will replace the services provided by Corning with
arrangements with third parties or services provided internally at costs
consistent with the fees charged by Corning. However, there can be no assurance
that after the termination of the transition services agreement the Company will
be able to replace Corning's services under the transition services agreement
for the fees charged by Corning, or that the functions assumed by the Company
after the Recapitalization or to be outsourced to third parties will not cost
significantly in excess of the Company's estimates or that the provision of such
services during the transition period after the Recapitalization will be
performed without interruption or delay due to unanticipated occurrences. In
addition, under the administrative services agreement the Company and Corning
will continue to provide to one another certain services internationally at
negotiated rates for up to two years.
 
    Pursuant to the Recapitalization Agreement, the Company agreed to change its
corporate name to remove the word "Corning" within three years of the Closing
Date (although the Company has retained the right to use the word "CorningWare"
in its corporate name) and to move its headquarters from the Corning campus
within 18 months of the Closing Date. Subsequent to the Recapitalization, the
Company estimates that it will incur $7.5 million in transition related
expenditures as well as capital expenditures, as a result of its separation from
Corning over the next three fiscal years, but primarily over the next four
fiscal quarters. These costs will include information technology consulting and
implementation in connection with the establishment of independent financial
systems, new signage, relocation of its headquarters and other separation
related expenditures.
 
    In connection with the Recapitalization prior to, on or subsequent to the
Closing Date the Company will record a charge of $18.5 million for certain cash
and non-cash benefits ($17.4 million of which will be paid or reimbursed by
Corning). See Note (a) to the Pro Forma Consolidated Condensed Statement of
Operations. These cash and non-cash compensation expenses are associated with
arrangements entered into by Corning.
 
    The Company also estimates it will incur transaction-related fees and
expenses of approximately $25.0 million, approximately $10.0 million of which
will be charged to income in the second quarter of 1998. The remainder will be
capitalized and amortized over the terms of the related debt instruments.
 
    TAXES; BASIS OF PRESENTATION.  The Company has been included in the
consolidated federal income tax returns filed by Corning. The Company and its
subsidiaries have had a tax sharing arrangement with Corning pursuant to which
the Company was required to compute its provision for income taxes on a separate
return basis and pay to, or receive from, Corning the separate U.S. federal
income tax return liability or benefit so computed, if any. In connection with
the Recapitalization, CCPC Acquisition and Corning will make a joint election
under Section 338(h)(10) of the Internal Revenue Code of 1986, as amended, which
will result in the Company recording an increase in the tax basis of its fixed
assets and intangibles. As a result, for tax purposes, the Company will be able
to depreciate assets with a higher tax basis after the Recapitalization,
resulting in a significant deferred tax asset. See "Unaudited Pro Forma
Financial Information."
 
    The Recapitalization of the Company will have no impact on the historical
basis of assets and liabilities as reflected in the consolidated financial
statements of the Company, with the exception of deferred taxes on income which
will change to reflect the tax basis step-up which occurred upon the
consummation of the Recapitalization.
 
    OTHER MATTERS.  As outlined in the table below, a significant portion of the
Company's net sales is derived from international markets. The Company's
international sales have historically had higher margins than domestic sales and
historically a significant portion of the Company's operating income has been
derived from international sales. Despite recent economic disruptions in Asia,
the Company believes international markets, including Asia over the long term,
represent potential growth areas for the Company. For the first quarter of 1998,
the Company recorded net sales and operating income (loss) (before allocation of
manufacturing variances and corporate overhead) of $3.8 million and $(0.1)
million
 
                                       45
<PAGE>
in Asian markets (excluding Japan), respectively, compared to $16.7 million and
$6.9 million in the first quarter of 1997. For 1997, net sales and operating
income (before allocation of manufacturing variances and corporate overhead)
from Asian markets (excluding Japan) were $57.7 million and $18.5 million,
respectively. Results in Japan in the first quarter of 1998 were substantially
equivalent with those in the prior year. Although the Company believes that such
markets offer long term growth potential, the current disruptions in Asia are
expected to continue to materially adversely affect the Company's results of
operations in the short term. See "Risk Factors-- Risks Associated With
International Markets."
 
<TABLE>
<CAPTION>
                                                        INTERNATIONAL NET SALES
                                         -----------------------------------------------------
                                         FOR THE THREE MONTHS
                                                                     FOR THE YEARS ENDED
                                           ENDED MARCH 31,              DECEMBER 31,
                                         --------------------  -------------------------------
                                           1998       1997       1997       1996       1995
                                         ---------  ---------  ---------  ---------  ---------
                                                         (DOLLARS IN MILLIONS)
                                         -----------------------------------------------------
<S>                                      <C>        <C>        <C>        <C>        <C>
Asia:
  Korea................................  $     1.0  $     9.2  $    30.3  $    25.3  $    17.3
  All Other............................        2.8        7.5       27.4       28.7       26.1
Japan..................................        2.4        2.1        8.9        8.6        8.8
Canada.................................        7.1        7.6       33.4       33.1       33.1
Latin America:
  Brazil...............................        0.1        0.2        1.8        1.5        1.5
  Mexico...............................        2.1        0.8        4.8        3.4        1.0
  All Other............................        4.0        3.6       11.1        9.8       10.6
South Pacific..........................        2.4        2.9       13.0       14.6       13.5
Europe(1)..............................        1.0        2.9       10.2        7.0       11.0
                                         ---------  ---------  ---------  ---------  ---------
Total International....................  $    22.9  $    36.8  $   140.9  $   132.0  $   122.9
                                         ---------  ---------  ---------  ---------  ---------
                                         ---------  ---------  ---------  ---------  ---------
</TABLE>
 
- --------------------------
 
(1) Comprised of revenues from Europe, Russia, Middle East and Africa from the
    distribution agreement with Newell. See "Business--Distribution
    Channels--European, Russian, Middle Eastern and African Consumer Products
    Business."
 
    SECOND QUARTER FORECAST.  In the second quarter of 1998 the Company expects
that continuing softness in the Asian market will offset performance
improvements in the Domestic retail market and Company-operated outlet stores
and result in a decline in net sales, operating income and EBITDA for the second
quarter of fiscal 1998 compared to the same period of the prior year. The second
quarter is not complete and, as such, historical results may vary from such
forecast and Investors are cautioned not to place undue reliance on such
forecast. The Company believes that its results of operations for future periods
will improve, although it is currently analyzing an accelerated inventory
reduction program that would entail temporarily reducing the Company's rate of
production. This program would have the temporary effect of increasing costs of
production per unit while improving cash flows and lowering inventory carrying
costs. In the longer term the Company believes it will benefit from (i) the
increase in allotted shelf space at key retailers, which the Company believes is
evidenced by an increase in shipments to mass merchants in the second quarter of
1998, (ii) an increase in the number of Company-operated outlet stores planned
for 1998, (iii) future manufacturing costs reductions through further
streamlining of the Company's plants and facilities and (iv) continued
development of a series of new products that the Company plans to introduce over
the next two years. The Company believes that the effect of such factors will be
partially offset by continuing weakness in Asia and increased promotional
expenses to support the introduction of new products. There can be no assurance
that these or other efforts will result in improved financial performance. See
"Risk Factors--Forward-Looking Statements."
 
                                       46
<PAGE>
RESULTS OF OPERATIONS
 
    The following table summarizes the Company's historical results of
operations as a percentage of net sales for the three months ended March 31,
1998 and 1997.
 
<TABLE>
<CAPTION>
                                                                                                PERCENTAGE OF NET
                                                                                                    SALES FOR
                                                                                                 THE THREE MONTHS
                                                                                                      ENDED
                                                                                                    MARCH 31,
                                                                                               --------------------
                                                                                                 1998       1997
                                                                                               ---------  ---------
<S>                                                                                            <C>        <C>
Net sales....................................................................................      100.0%     100.0%
Cost of sales................................................................................       66.7       65.2
 
Gross profit.................................................................................       33.3       34.8
Selling, general, administrative and research and development expenses.......................       31.9       25.6
Other corporate administrative expenses......................................................         --        3.6
Transactions related expenses................................................................        1.3         --
Goodwill amortization........................................................................        0.3        0.3
Other, net...................................................................................        0.3        0.3
Royalty income...............................................................................       (0.2)      (0.2)
                                                                                               ---------  ---------
 
Operating income (loss)......................................................................       (0.3)       5.2
Interest expense, net........................................................................        1.3        1.6
                                                                                               ---------  ---------
Income (loss) before taxes on income.........................................................       (1.6)       3.6
Income tax expense...........................................................................        1.5        2.2
                                                                                               ---------  ---------
Income (loss) before minority interest.......................................................       (3.1)       1.4
Net income (loss)............................................................................       (3.1)%       1.4%
                                                                                               ---------  ---------
                                                                                               ---------  ---------
</TABLE>
 
THREE MONTHS ENDED MARCH 31, 1998 ("FIRST QUARTER 1998") COMPARED WITH THREE
  MONTHS ENDED MARCH 31, 1997 ("FIRST QUARTER 1997")
 
    NET SALES.  Net sales decreased by $11.8 million, or 9.2%, to $116.5 million
in first quarter 1998 from $128.3 million in first quarter 1997. The decline in
sales was principally due to a significant decline in Asian sales as a result of
continued weakness in the Korean and Indonesian markets. For the first quarter
1998, the Company recorded net sales of $3.8 million in Asian markets (excluding
Japan) compared to $16.7 million in the first quarter 1997. Results in Japan
were substantially equivalent to the prior year. Although the Company believes
that Asian markets offer long-term growth potential, the current disruptions in
Asia are expected to continue to materially adversely affect sales in the short
term. The decline in net trade sales for the first quarter of 1998 was partially
offset by (i) improved sales by the Company operated outlet stores and (ii)
increased shipments in March 1998 to mass merchants reflecting improved
allocations of shelf space for the 1998 selling season. The Company believes
that the increased shipments in March 1998 to mass merchants reflects the
implementation by certain key accounts of plan-o-grams finalized in the fall of
1997, on which planned shelf space allocation for the four quarters beginning
April 1998 is based. The Company introduced Corning Ware-Registered Trademark-
Pop-Ins-TM- and three full lines of Revere Ware aluminum non-stick lines to the
retail trade during the fall of 1997 to coincide with the development of such
plan-o-grams. While the Company believes that it has regained a significant
portion of the shelf space lost in 1997, due to the inherent uncertainty
regarding sales of consumer products there can be no assurance that the
improvement in shelf space indicated by the plan-o-grams will result in
additional sales.
 
    COST OF SALES.  Cost of sales decreased by $5.9 million, or 7.0%, to $77.7
million in 1998 from $83.6 million in 1997. The decrease in cost of sales was
due to the decrease in first quarter 1998 sales volume. Cost of sales as a
percentage of net sales increased to 66.7% in 1998 from 65.2% in 1997 as a
 
                                       47
<PAGE>
result of the significant decline in higher margin Asian sales as discussed
above, offsetting the effects of cost saving initiatives.
 
    GROSS PROFIT.  Primarily as a result of the factors discussed above, gross
profit decreased to $38.8 million in first quarter 1998 from $44.7 million in
first quarter 1997, while gross profit as a percentage of net sales decreased to
33.3% in first quarter 1998 from 34.8% in first quarter 1997.
 
    SELLING, GENERAL, ADMINISTRATIVE AND RESEARCH AND DEVELOPMENT
EXPENSES.  Selling, general, administrative and research and development
expenses increased by $4.3 million, or 13.1%, in first quarter 1998 compared to
first quarter 1997. Beginning in first quarter 1998 the Company was no longer
allocated corporate administrative charges for certain administrative services
performed by Corning. Charges relating to these services previously allocated by
Corning were charged on a direct basis based on a new Transition Service
Agreement negotiated between Corning and the Company. These direct charges were
reflected in selling, general, administrative and research and development
expense in first quarter 1998. Selling, general, administrative and research and
development expense as a percentage of net sales in 1998 increased to 31.9% in
first quarter 1998 from 29.2% in first quarter 1997 (including other corporate
administrative expenses for purposes of such comparison). This increase is due
principally to increased expenses related to outlet stores to support increased
sales and increased costs related to the 1998 new product introductions.
 
    OTHER CORPORATE ADMINISTRATIVE EXPENSE.  Other corporate administrative
expense represents an allocation of corporate charges from Corning to the
Company based on an agreement between the companies. Corning calculated these
charges as a percentage of budgeted sales. Other corporate administrative
expenses were zero in first quarter 1998 compared to $4.6 million in first
quarter 1997. Beginning on January 1, 1998, the Company was no longer allocated
corporate administrative charges from Corning. Charges relating to these
services previously performed by Corning were classified as selling, general,
administrative and research and development expense in first quarter 1998 and
were calculated on the basis of agreed upon prices in a transition services
agreement.
 
    OTHER NET AND ROYALTY INCOME.  Other, net and royalty income represents
other miscellaneous operating expenses and royalty income, and did not fluctuate
materially when comparing first quarter 1998 to first quarter 1997.
 
    OPERATING INCOME.  Primarily as a result of the factors discussed above,
operating income decreased by $7.0 million to a loss of $0.3 million in first
quarter 1998 from income of $6.7 million in first quarter 1997. As a percentage
of net sales operating income decreased to (0.3)% in 1998 from 5.2% in 1997.
 
    NET INTEREST EXPENSE.  Net interest expense decreased by $0.5 million, or
23.8%, to $1.6 million in first quarter 1998 from $2.1 million in first quarter
1997. The decrease was principally due to a reduction in the Company's average
outstanding indebtedness in the first quarter 1998 compared to the first quarter
1997.
 
    INCOME TAX EXPENSE.  The incurred income tax expense of $1.7 million on a
pre-tax loss of $(1.9) million in first quarter 1998, and the effective tax rate
of 60.2% in first quarter 1997 which was substantially higher than the combined
state and federal rate, were a result of charges related to a tax sharing
agreement with Corning.
 
    Primarily as a result of the above factors, net income for first quarter
1998 decreased $5.4 million to a loss of $(3.6) million in first quarter 1998
from income of $1.8 million in first quarter 1997.
 
                                       48
<PAGE>
    The following table summarizes the Company's historical results of
operations as a percentage of net sales for 1997, 1996 and 1995.
 
<TABLE>
<CAPTION>
                                                                                        PERCENTAGE OF NET SALES FOR
                                                                                       THE YEARS ENDED DECEMBER 31,
                                                                                      -------------------------------
<S>                                                                                   <C>        <C>        <C>
                                                                                        1997       1996       1995
                                                                                      ---------  ---------  ---------
Net sales...........................................................................      100.0%     100.0%     100.0%
Cost of sales.......................................................................       65.8       68.9       70.8
                                                                                      ---------  ---------  ---------
Gross profit........................................................................       34.2       31.1       29.2
Selling, general, administrative and research and
  development expenses..............................................................       24.0       24.4       27.6
Other corporate administrative expense..............................................        3.2        3.3        3.3
Provision for restructuring costs...................................................     --            0.3     --
Goodwill amortization...............................................................        0.3        0.3        0.3
Other, net..........................................................................        1.0        0.1        0.1
Royalty income......................................................................       (0.3)      (0.2)      (0.3)
                                                                                      ---------  ---------  ---------
Operating income (loss).............................................................        6.0        2.9       (1.8)
Interest expense, net...............................................................        1.5        1.6        1.5
                                                                                      ---------  ---------  ---------
Income (loss) before taxes on income................................................        4.5        1.3       (3.3)
Income tax expense (benefit)........................................................        2.2        1.0       (0.3)
                                                                                      ---------  ---------  ---------
Income (loss) before minority interest..............................................        2.3        0.3       (3.0)
                                                                                      ---------  ---------  ---------
Net income (loss)...................................................................        2.3%       0.3%      (3.0)%
                                                                                      ---------  ---------  ---------
                                                                                      ---------  ---------  ---------
</TABLE>
 
YEAR ENDED DECEMBER 31, 1997 COMPARED WITH YEAR ENDED DECEMBER 31, 1996
 
    NET SALES.  Net sales decreased by $59.5 million, or 9.4%, to $572.9 million
in 1997 from $632.4 million in 1996. This decline was primarily due to decreased
volume through the mass merchant, department store and catalog showroom channels
caused by the elimination of SKUs and customer accounts in accordance with the
Business Redesign Program, as well as unplanned inventory reductions and shelf
space losses due to competitive factors, strategy changes at certain key
customers (such as lower retailer participation in promotional programs) and the
liquidation or bankruptcy of certain customers. Decreased sales through the mass
merchant, department store and catalog showroom channels were partially offset
by increased sales through the international and Company operated outlet store
channels. The Company's average prices for products in 1997 remained comparable
with average prices in 1996, although the Company reduced prices on Pyrex
Portables-Registered Trademark- to compete with an entry in this category by a
competitor.
 
    COST OF SALES.  Cost of sales decreased by $58.9 million, or 13.5%, to
$377.0 million in 1997 from $435.9 million in 1996. The decrease in cost of
sales was due to the decrease in sales volume as well as cost savings resulting
from the Business Redesign Program. Cost of sales as a percentage of net sales
declined to 65.8% in 1997 from 68.9% in 1996 as a result of the continued impact
of the Company's Business Redesign Program and associated manufacturing cost
reductions resulting from systematic productivity improvements concentrated on
reducing labor, materials and overhead costs through (i) process simplification,
(ii) better process control and discipline, (iii) workforce productivity
improvements and (iv) improved raw material sourcing. For example, due in part
to modifications to the Pyrex Portables-Registered Trademark- line to reduce
manufacturing costs, the Company was generally able to maintain margins on Pyrex
Portables-Registered Trademark- despite the price decrease discussed above.
 
    GROSS PROFIT.  Primarily as a result of the factors discussed above, gross
profit decreased slightly to $195.9 million in 1997 from $196.5 million in 1996,
while the gross profit as a percentage of net sales increased to 34.2% in 1997
from 31.1% in 1996.
 
    SELLING, GENERAL, ADMINISTRATIVE AND RESEARCH AND DEVELOPMENT
EXPENSES.  Selling, general, administrative and research and development
expenses decreased by $16.9 million, or 11.0%, to $137.3
 
                                       49
<PAGE>
million in 1997 from $154.2 million in 1996, and as a percentage of net sales
declined to 24.0% in 1997 from 24.4% in 1996. The reduction in these expenses
was primarily achieved through the redesign of sales and administrative
functions and the elimination or outsourcing of non-critical administrative
functions in accordance with the Business Redesign Program's objectives of cost
reduction and improved customer service. The decline was also attributable to
decreased outlet store expenses due to a reduced number of outlet stores. These
decreases were partially offset by increased expenses associated with
incremental investment in international operations to support international
sales growth.
 
    OTHER CORPORATE ADMINISTRATIVE EXPENSE.  Other corporate administrative
expense represents an allocation of corporate charges from Corning to the
Company. Corning calculated these charges as a percentage of the Company's
budgeted sales. Corporate administrative expense decreased by $2.5 million, or
12.0%, to $18.4 million in 1997 from $20.9 million in 1996. The decrease was
primarily due to lower budgeted sales which resulted in lower charges from
Corning.
 
    OTHER, NET.  Other, net represents miscellaneous expenses, including $4.5
million related to incremental incentive payments made to employees during the
sale of the Company.
 
    OPERATING INCOME.  Primarily as a result of the factors discussed above,
operating income increased by $16.0 million to $34.6 million in 1997 from $18.6
million in 1996 while operating income as a percentage of net sales increased to
6.0% in 1997 from 2.9% in 1996.
 
    NET INTEREST EXPENSE.  Net interest expense decreased by $2.2 million, or
20.6%, to $8.5 million in 1997 from $10.7 million in 1996. The decrease was
principally due to a reduction in the Company's average outstanding indebtedness
in 1997 as compared to 1996, which was attributable to improved operating
performance and asset management that generated positive cash flow in 1997.
 
    INCOME TAX EXPENSE.  The Company's effective income tax rate was 49.0% for
1997 and was significantly lower than the effective tax rate of 78.5% in 1996.
The Company's tax provision has been calculated on a separate company basis and
does not reflect the potential benefits that the Company could realize if the
provision was determined on a consolidated basis with Corning. The 1996
effective rate was significantly higher than the combined state and federal rate
primarily as a result of significant foreign dividends in relation to profit
before tax combined with the inability of the Company to use foreign tax
credits.
 
    Primarily as a result of the above factors, net income for 1997 increased
$11.4 million to $13.0 million in 1997 from $1.6 million in 1996.
 
YEAR ENDED DECEMBER 31, 1996 COMPARED WITH YEAR ENDED DECEMBER 31, 1995
 
    NET SALES.  Net sales increased by $23.7 million, or 3.9%, to $632.4 million
in 1996 from $608.7 million in 1995. The increase was principally attributable
to the introduction of Pyrex Portables-Registered Trademark-, which experienced
its first full year of sales in 1996 (compared to one month of sales in 1995),
and growth in the Corelle-Registered Trademark- line of dinnerware as the
Company expanded the range of Corelle-Registered Trademark- patterns with the
addition of more advanced decorating equipment. Sales growth in the bakeware and
dinnerware categories was partially offset by declines in sales of
Visions-Registered Trademark- rangetop cookware (due to the Company's decision
to significantly reduce the number of SKUs offered in this line) and the
Company's decision to discontinue selling to certain department store accounts
that were determined not to be profitable. The Company's average prices for
products in 1996 remained comparable with average prices in 1995.
 
    COST OF SALES.  Cost of sales increased $4.7 million, or 1.1%, to $435.9
million in 1996 from $431.2 million in 1995. The increase in cost of sales was
due to increased volumes partially offset by cost savings resulting from the
Business Redesign Program as well as the absence of increased expenses relating
to a new supplier of sand incurred in 1995. Costs of sales as a percentage of
net sales decreased
 
                                       50
<PAGE>
to 68.9% in 1996 from 70.8% in 1995, in part due to the absorption of fixed
costs over a higher volume of sales as well as cost reductions and productivity
improvements associated with the Business Redesign Program as well as the
absence of increased expenses relating to a new supplier of sand incurred in
1995. The effect of these cost reductions and productivity improvements was
partially offset by higher expenses associated with higher than average repairs
of the Company's glass melting tanks due to a confluence of tank repair cycles
and expenses associated with major capital projects, including the installation
of rotary screening equipment to decorate Corelle-Registered Trademark-
dinnerware and the reconfiguration of certain manufacturing processes to reduce
costs.
 
    GROSS PROFIT.  Primarily as a result of the factors discussed above, gross
profit increased $19.0 million, or 10.7%, to $196.5 million in 1996 from $177.5
million in 1995, while the gross profit percentage increased to 31.1% in 1996
from 29.2% in 1995.
 
    SELLING, GENERAL, ADMINISTRATIVE AND RESEARCH AND DEVELOPMENT
EXPENSE.  Selling, general, administrative and research and development expenses
decreased by $14.0 million, or 8.3%, to $154.2 million in 1996 from $168.2
million in 1995, and as a percentage of net sales declined to 24.4% in 1996 from
27.6% in 1995. The decline in these expenses was primarily attributable to
decreased administrative expense resulting from personnel reduction as part of
the Business Redesign Program. These reductions were partially offset by higher
outlet store operating expenses, which grew in 1996 due to an increase in the
number of outlet stores operated, and higher expenses relating to international
operations, which increased as a result of sales and marketing investments made
in Southeast Asia, Japan, China and Latin America.
 
    OTHER CORPORATE ADMINISTRATIVE EXPENSE.  As a result of the Company's
increased budgeted sales for 1996, other corporate administrative expense
increased by $0.9 million, or 4.5%, to $20.9 million in 1996 from $20.0 million
in 1995.
 
    RESTRUCTURING EXPENSES.  The Company incurred net restructuring expenses of
$2.1 million in 1996 ($4.2 million of gross charges offset by a $2.1 million
reversal of existing reserves). The restructuring charges resulted from the
implementation of the Business Redesign Program. The major components of the
charges were (i) costs related to a reduction in the number of SG&A and
manufacturing employees and (ii) expenses incurred to close underperforming
stores. See note 14 to the consolidated financial statements of the Company
included elsewhere herein.
 
    OPERATING INCOME.  Primarily as a result of the factors discussed above,
operating income increased by $29.8 million to $18.6 million in 1996 from an
operating loss of $11.2 million in 1995, while operating income as a percentage
of net sales was 2.9% in 1996 compared to (1.8)% in 1995. Excluding the net
restructuring expenses in 1996, operating income increased by $31.9 million to
$20.7 million in 1996 from an operating loss of $11.2 million in 1995.
 
    NET INTEREST EXPENSE.  Net interest expense increased by $1.9 million, or
21.6%, to $10.7 million in 1996 from $8.8 million in 1995. The increase was
principally due to an increase in the Company's average outstanding indebtedness
as operating performance and working capital requirements resulted in net cash
outflows in 1995.
 
    INCOME TAX EXPENSE.  The Company's effective income tax rate was 78.5% for
1996 and was significantly higher than the combined state and federal rate
primarily as a result of significant foreign dividends in relation to profit
before tax. The Company recorded an income tax benefit for 1995 as a result of
operating losses.
 
    NET INCOME.  Primarily as a result of the above factors, net income for 1996
increased $20.1 million to $1.6 million from a net loss of $18.5 million in
1995.
 
                                       51
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
 
    On March 2, 1998, Corning, Borden, the Company and CCPC Acquisition entered
into the Recapitalization Agreement, pursuant to which on April 1, 1998 CCPC
Acquisition acquired 92.0% of the outstanding shares of Common Stock of the
Company from Corning for $110.4 million. The Stock Acquisition was financed by
an equity investment in CCPC Acquisition by BW Holdings, an affiliate of KKR and
the parent company of Borden and CCPC Acquisition. BW Holdings financed such
investment from cash on hand. Pursuant to the Recapitalization Agreement, on the
Closing Date prior to the consummation of the Stock Acquisition, the Company
paid the Cash Dividend to Corning of $472.6 million. The amount of the Cash
Dividend is subject to a post-closing adjustment based on the Company's net
worth and outstanding indebtedness on the Closing Date. See "The
Recapitalization." As a result of the Recapitalization, Corning continues to
hold 8.0% of the outstanding shares on Common Stock.
 
    The Company currently believes that cash flow from operating activities,
together with borrowings available under the Revolving Credit Facility, will be
sufficient to fund the Company's currently anticipated working capital, capital
expenditures, interest payments and scheduled principal payments. Any future
acquisitions, joint ventures or other similar transactions will likely require
additional capital and there can be no assurance that any such capital will be
available to the Company on acceptable terms or at all. In addition, the Company
will require liquidity to fund payments due under noncancellable lease
agreements ($17.4 million and $13.1 million due throughout 1998 and 1999,
respectively). The Company may also require cash for a possible post-closing
adjustment to the Cash Dividend based on the Company's net worth and outstanding
indebtedness on the Closing Date and a potential payment of up to $15.0 million
to Corning in 2001 in the event the Company achieves a cumulative gross margin
in excess of $710.9 million for the three-year period ended December 31, 2000.
See "The Recapitalization."
 
    The Company incurred substantial indebtedness in connection with the
Recapitalization. As of March 31, 1998, after giving pro forma effect to the
Transactions, the Company would have had $481.8 million of consolidated
indebtedness and a common stockholders' deficit of $69.0 million. Following the
Transactions, the Company's liquidity requirements will be significantly
increased, primarily due to increased interest expense obligations. Had the
Transactions been consummated on January 1, 1997, interest expense, (net)
incurred in 1997 and the three months ended March 31, 1998 associated with
indebtedness under the Notes, the Credit Facilities and the Company's industrial
development bonds would have been $42.8 million and $10.7 million, respectively,
compared with the $8.5 million and $1.6 million, respectively of interest
expense (net) actually incurred. See "Unaudited Pro Forma Financial
Information." The Credit Facilities and the Indenture will permit the Company to
incur or guarantee certain additional indebtedness, subject to certain
limitations. See "Description of Credit Facilities" and "Description of the
Exchange Notes."
 
    On April 9, 1998, the Company entered into the Credit Facilities under which
the Company borrowed $200.0 million under the Term Loans and $59.6 million under
the Revolving Credit Facility. The Company borrowed an additional $12.0 million
under the Revolving Credit Facility through the date of the closing of the
Offering. The Revolving Credit Facility provides for $275.0 million of
commitments, $71.6 million of which would have been drawn on a pro forma basis
if the Transactions occurred on March 31, 1998. The remaining commitments under
the Revolving Credit Facility are available to fund the working capital, capital
expenditures, general corporate and other cash needs of the Company.
 
    Borrowings under the Credit Facilities bear interest at a rate per annum
equal (at the Company's option) to a margin over either a base rate or LIBOR.
The Term Loans mature on the date that is 8 1/2 years after the closing of the
Credit Facilities and provides for nominal annual amortization. All outstanding
revolving credit borrowings under the Revolving Credit Facility will become due
on the date that is seven years after the closing of the Credit Facilities. The
Company expects that its working capital needs and other cash requirements will
require it to obtain replacement revolving credit facilities at that time. No
 
                                       52
<PAGE>
assurance can be given that any such replacement can be successfully
accomplished. See "Description of Credit Facilities."
 
    The Exchange Notes will mature in 2008. The Company's obligations under the
Exchange Notes are subordinate and junior in right of payment to all existing
and future Senior Indebtedness of the Company, including all indebtedness under
the Credit Facilities. The obligations of the Company under the Notes and the
Indenture have not been guaranteed by subsidiaries of the Company. The Credit
Facilities and the Indenture contain numerous financial and operating covenants
that will limit the discretion of the Company's management with respect to
certain business matters. These covenants place significant restrictions on,
among other things, the ability of the Company to incur additional indebtedness,
pay dividends and other distributions, prepay subordinated indebtedness, enter
into sale and leaseback transactions, create liens or other encumbrances, make
capital expenditures, make certain investments or acquisitions, engage in
certain transactions with affiliates, sell or otherwise dispose of assets and
merge or consolidate with other entities and otherwise restrict corporate
activities. The Credit Facilities also require the Company to meet certain
financial ratios and tests. The Credit Facilities and the Indenture contain
customary events of default. See "Description of Credit Facilities" and
"Description of the Exchange Notes."
 
    Capital expenditures were $7.9 million for the first quarter of 1998
compared to $4.1 million for the comparable period of 1997. The increase in
capital expenditures reflect lower first quarter 1997 capital spending as the
Company was in the early stages of the sale process. In addition, first quarter
1998 capital expenditures include approximately $2.0 million relating to the
implementation of information systems. The Company currently anticipates
investing approximately $26.0 million in capital equipment projects in 1998.
 
    Capital expenditures were $28.6 million, $35.8 million and $40.6 million in
1997, 1996 and 1995, respectively. Higher capital expenditures in 1996 and 1995
were the result of glass melting tank repairs and the cost reduction initiatives
in manufacturing facilities. The most significant capital expenditures in 1997
were for glass melting tank repairs and the installation of new rotary screening
machinery. The Company currently anticipates investing approximately $26.0
million in capital equipment projects in 1998, which includes approximately
$14.0 million directed toward maintenance expenditures, which the Company
believes is a normal level of maintenance capital expenditures.
 
    In the first quarter of 1998 the Company's operating activities provided
$1.7 million in cash compared to a use of $5.9 million in the first quarter of
1997. Despite the decrease in net income in 1998 operating cash flows increased
as a result of (i) lower advertising and promotional spending from lower sales
and fewer customers and (ii) lower incentive payments resulting from lower
earnings.
 
    In 1997 the Company's operating activities provided $37.8 million in cash
compared to $57.0 million in 1996. Despite an increase in net income, operating
cash flows decreased as a result of $30.7 million in net outflows to Corning to
settle certain intercompany trade liabilities. Investing activities used $26.2
million in cash in 1997 compared to a use of $35.6 million in 1996. This
decrease was primarily the result of higher 1996 capital expenditures resulting
from the continuation of cost reduction initiatives in manufacturing facilities
and a decrease in capitalizable maintenance.
 
    Cash provided from operating activities equaled $57.0 million in 1996
compared to $1.0 million in 1995. This increase was attributable to an increase
in net income in 1996 compared to a net loss in 1995, improved working capital
levels and a lower level of intercompany trade payments. Investing activities
used cash of $35.6 million in 1996 compared to $42.9 million in 1995. This
difference was the result of higher capital expenditures in 1995 associated with
the implementation of cost reduction initiatives in manufacturing facilities.
 
    The Company's ability to fund its working capital needs, planned capital
expenditures, scheduled debt payments, lease payments and other cash payments to
continue its Business Redesign Program and to comply with all of the financial
covenants under its debt agreements, depends on its future
 
                                       53
<PAGE>
operating performance and cash flow, which in turn are subject to prevailing
economic conditions and to financial, business and other factors, some of which
are beyond the Company's control. See "Risk Factors."
 
SEASONALITY
 
    Historically, the Company records its highest sales in its third and fourth
quarters as a result of the buying patterns associated with the holiday selling
season (as reflected in the table below). The Company's need for working capital
accelerates in the second half of the year due to additional merchandising and
promotional efforts associated with the holiday selling season and, accordingly,
total debt levels tend to peak in the third and fourth quarters, decreasing in
the first quarter of the following year. The amount of the Company's sales
generated during the second half of the year generally depends on a number of
factors, including general economic conditions, existing retailer inventory
levels and other factors beyond the Company's control. The Company's results of
operations would be adversely and disproportionately affected if the Company's
sales were substantially lower than those normally expected during the second
half of the year.
 
<TABLE>
<CAPTION>
                                                        1997 NET SALES            1996 NET SALES
                                                   ------------------------  ------------------------
<S>                                                <C>        <C>            <C>        <C>
                                                    AMOUNT      % OF YEAR     AMOUNT      % OF YEAR
                                                   ---------  -------------  ---------  -------------
First quarter....................................  $   128.3           22%   $   133.1           21%
Second quarter...................................      125.6           22        132.5           21
Third quarter....................................      145.3           26        165.2           26
Fourth quarter...................................      173.7           30        201.6           32
                                                   ---------          ---    ---------          ---
                                                   $   572.9          100%   $   632.4          100%
                                                   ---------          ---    ---------          ---
                                                   ---------          ---    ---------          ---
</TABLE>
 
IMPACT OF THE YEAR 2000 ISSUE
 
    The year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year, as well as hardware
that is designed with similar constraints. Any of the Company's computer
programs and hardware that have date-sensitive functions may recognize a date
using "00" as the year 1900 rather than the year 2000. This could result in a
system failure or miscalculations causing disruptions in operations including,
among other things, a temporary inability to process transactions, send
invoices, or engage in similar normal business activities.
 
    Corrective action to address the year 2000 issue began in the second quarter
of 1996, with the establishment of a program office to manage year 2000
activities. The Company is utilizing both internal and external resources to
identify, correct and test the Company's hardware and software for year 2000
compliance. In April 1997, the Company completed a comprehensive inventory of
its computer systems. The inventory resulted in an impact assessment that was
completed in October 1997. The findings of the assessment, together with the
need to establish system independence from Corning, led the Company to embark on
a comprehensive systems replacement project.
 
    The Company is in the process of implementing a comprehensive enterprise
resource management system. This system will replace roughly 90% of the
Company's business transaction systems. The remaining 10%, comprised of benefits
administration and payroll, will be outsourced to a year 2000 compliant service
bureau. Implementation of these new systems is expected to be completed by April
1, 1999. In addition, the Company is resolving year 2000 issues related to plant
process control systems, non-data related computer control systems and supplier
and customer year 2000 compliance. While management cannot reasonably estimate
the cost of implementation of all systems necessary to comply with year 2000
dating, significant investments in information systems will total in excess of
$16.5 million by the year 2000. Any remaining costs are not expected to have a
material impact on the financial position or results of operations of the
Company in any year.
 
                                       54
<PAGE>
    The Company intends its year 2000 date conversion project to be completed on
a timely basis so as to not significantly impact business operations. If the
necessary modifications and conversions are not completed as planned, the year
2000 issue may have a material impact on the Company. Also, although the
Company's systems do not rely significantly on systems of other companies, the
Company cannot provide assurance that failure of third parties to address the
year 2000 issue will not have an adverse impact on the Company.
 
FOREIGN CURRENCY RISK
 
    Currency exchange rate fluctuations may significantly affect the Company's
foreign sales and earnings. Increased strength of the U.S. dollar will increase
the effective price of the Company's products sold in U.S. dollars and therefore
may materially adversely affect sales. The Company's costs are predominantly
denominated in U.S. dollars. Thus, with respect to the sales conducted in
foreign currencies, increased strength of the U.S. dollar could decrease the
Company's reported revenues and margins in respect of such sales to the extent
the Company is unable or determines not to increase local currency prices.
 
                                       55
<PAGE>
                                    BUSINESS
 
GENERAL
 
    The Company is a leading manufacturer and marketer of bakeware, dinnerware
and rangetop cookware. The Company believes that its brands, including Corning
Ware-Registered Trademark-, Pyrex-Registered Trademark-,
Corelle-Registered Trademark-, Revere Ware-Registered Trademark- and
Visions-Registered Trademark-, constitute one of the broadest and best
recognized collection of brands in the U.S. housewares industry. The Company has
leading positions in the major channels of distribution for such products in the
United States and has also achieved a significant presence in certain
international markets, primarily Canada, Asia, Australia and Latin America. In
1997, on a pro forma basis after giving effect to the Transactions, the Company
recorded net sales, operating income and EBITDA of $572.9 million, $54.0 million
and $89.7 million, respectively. For the three months ended March 31, 1998, on a
pro forma basis after giving effect to the Transactions, the Company recorded
net sales, operating income and EBITDA of $116.5 million, $2.1 million and $11.1
million, respectively. In 1997, approximately 75% of the Company's net sales
were generated domestically and approximately 25% internationally.
 
    The Company's Corning Ware-Registered Trademark- and
Pyrex-Registered Trademark- products represent the two largest glass-ceramic and
glass bakeware brands (measured in dollar sales) in the United States, with
approximately 67% of all glass-ceramic and glass bakeware sales (and
approximately 29% of total bakeware sales) in 1997. The Company believes that
its Corelle-Registered Trademark- brand is the nation's largest selling
dinnerware brand in the mass merchant channel, with approximately 38% of mass
merchant dinnerware sales in 1997, over two times the sales of the next largest
mass merchant dinnerware competitor. The Company's core rangetop cookware brand,
Revere Ware-Registered Trademark-, is one of the nation's leading stainless
steel rangetop cookware brands, accounting for approximately 29% of stainless
steel rangetop cookware sales and 7% of total rangetop cookware sales among mass
merchant and department store customers in 1997.
 
U.S. HOUSEWARES INDUSTRY
 
    According to management estimates, total retail sales in the U.S. housewares
industry were approximately $19.2 billion in 1997. The categories of the
housewares industry in which the Company's products compete--bakeware,
dinnerware and rangetop cookware--generated an estimated $4.3 billion in total
retail sales in 1997 compared to $4.1 billion in 1996. Retail sales in the U.S.
of bakeware, dinnerware and rangetop cookware have all exhibited a stable growth
pattern over the last ten years with growth in these segments linked to the rate
of household formations and gross domestic product growth. In the United States,
bakeware, dinnerware and rangetop cookware products are sold through three
primary channels, mass merchants (large national or regional discounters, such
as K-Mart), department stores and specialty retailers (full service retailers
providing a broad assortment in their specialty retail category, such as Bed
Bath & Beyond and Home Place), as well as through other channels, including
outlet stores, retail food stores, catalog showrooms and direct mail.
 
    BAKEWARE.  Total U.S. retail bakeware sales are estimated to have been
$800.0 million in 1997. During this period, metal products and glass and
glass-ceramic products each represented an estimated 50% of U.S. retail bakeware
sales. The Company's bakeware sales are generated primarily from glass-ceramic
and glass products sold under the Corning Ware-Registered Trademark- and
Pyrex-Registered Trademark- brand names. The mass merchant channel is the
largest single channel for bakeware, accounting for an estimated 37% of domestic
retail bakeware sales in 1997.
 
    DINNERWARE.  Total U.S. retail dinnerware sales are estimated to have been
$1.7 billion in 1997. The Company's Corelle-Registered Trademark- glass
dinnerware products are sold as "everyday" products. "Everyday" dinnerware
products, which include glass, stoneware and plastic products, represented an
estimated 56% of domestic retail dinnerware sales in 1997. The mass merchant
channel is the largest channel for everyday dinnerware, accounting for an
estimated 33% of U.S. retail dinnerware sales in 1997.
 
                                       56
<PAGE>
    RANGETOP COOKWARE.  Total U.S. retail rangetop cookware sales are estimated
to have been $1.8 billion in 1997. Aluminum, which has been growing in
popularity due to the ease of cleaning and increased durability of non-stick
coatings, is the leading material for rangetop cookware (the other primary
material being stainless steel) and accounted for approximately 70% of U.S.
retail rangetop cookware sales in mass merchant and department store channels in
1997. The Company's rangetop cookware sales are generated primarily from
stainless steel products sold under the Revere Ware-Registered Trademark- brand
name and glass-ceramic products sold under the Visions-Registered Trademark-
brand name. To meet growing consumer demand, the Company introduced three full
lines of Revere Ware-Registered Trademark- non-stick aluminum products in 1998
to complement the Company's sales of individual items of non-stick rangetop
cookware. The mass merchant channel is the largest distribution channel in this
category, accounting for an estimated 45% of retail domestic rangetop cookware
sales in 1997.
 
COMPETITIVE STRENGTHS
 
    The Company attributes its leadership in bakeware, dinnerware and stainless
steel rangetop cookware to the following competitive strengths:
 
    LEADING BRAND NAMES.  The Corning Ware-Registered Trademark-,
Pyrex-Registered Trademark-, Corelle-Registered Trademark-, Revere
Ware-Registered Trademark- and Visions-Registered Trademark- brands have
consistently been among the leaders in brand awareness and household penetration
in the respective product categories in which they compete in the United States.
The Company believes that this brand strength and household penetration results
from consumer experience with the high quality, durability and functionality of
the Company's products.
 
                             BRAND CHARACTERISTICS
 
<TABLE>
<CAPTION>
                                                           TOTAL
BRAND                                                  AWARENESS(A)      HOUSEHOLD PENETRATION(B)
- ---------------------------------------------------  -----------------  ---------------------------
<S>                                                  <C>                <C>
Corning Ware-Registered Trademark-.................             98%                     82%
Pyrex-Registered Trademark-........................             93%                     73%
Corelle-Registered Trademark-......................             91%                     51%
Revere Ware-Registered Trademark-..................             81%                     36%
Visions-Registered Trademark-......................             87%                     33%
</TABLE>
 
- ------------------------
 
(a) Based on surveys conducted in 1997 of female heads of households by market
    research firms using aided and unaided techniques.
 
(b) The percentage of the respondents aware of the brand who currently own a
    product of the applicable brand.
 
    BROAD DISTRIBUTION IN U.S. CHANNELS.  The Company sells its products in the
United States to most major U.S. mass merchant retailers and a broad array of
department stores, specialty retailers and retail food stores, as well as
through its outlet stores and other channels. The strength of the Company's
brand names and its presence in several houseware categories make the Company a
significant supplier to, and enhance the Company's relationship with, its
retailer customers. In 1997, approximately 32% of the Company's U.S. gross sales
(before deductions for trade allowances, customer-paid freight and discounts)
were generated through the mass merchant channel, approximately 34% were
generated by Company-operated outlet stores and approximately 34% were generated
by other domestic channels, including department stores, specialty retailers and
retail food stores. The Company's outlet stores carry an extensive range of the
Company's products and provide the Company with an additional distribution
channel, which allows the Company to profitably sell slower-moving inventory.
The Company believes that its outlet stores, which also sell complementary
kitchen accessories, have developed marketing and pricing strategies that
generate sales which supplement, rather than compete with, its retailer
customers. The broad distribution of the Company's products through the mass
merchant,
 
                                       57
<PAGE>
department store and specialty retailer channels, together with the sales made
through the Company's outlet stores, reduces the Company's dependence on any one
channel of distribution.
 
    EMPHASIS ON NEW PRODUCT DEVELOPMENT.  Products introduced in 1996 and 1997
generated approximately 24% of the Company's 1997 gross sales. New products
include: (i) products introduced into new categories or serving new functions to
meet consumer needs not met by the Company's existing products; (ii) product
line extensions, which generally include manufacturing changes to existing
product lines such as glass color or shape changes; and (iii) product renewals,
which generally include decorative changes to existing product lines such as
pattern changes. The Company's product development process incorporates
extensive use of qualitative and quantitative research and enhances the
Company's ability to (i) focus resources on projects with high market potential,
(ii) bring new products to market quickly and (iii) extend existing product
categories. For example, Pyrex Portables-Registered Trademark-
(Pyrex-Registered Trademark- branded portable food containers) went from concept
to national distribution in only 11 months and generated over $33 million in
gross sales in 1996, the first full calendar year after its introduction. In
addition, the Company launched three full lines of Revere
Ware-Registered Trademark- aluminum non-stick cookware in 1998 within nine
months of commencing product development. Another new product for 1998 currently
being shipped by the Company to major retailers is Corning
Ware-Registered Trademark- Pop-Ins-TM-, a line of products designed for storing,
serving and reheating meals either at home or away from home that leverages the
Company's traditional strength in cooking/serving containers.
 
    HIGH QUALITY MANUFACTURING PROCESSES.  The Company's manufacturing processes
enable the Company to produce products with performance and cost characteristics
that appeal to consumers. The Company believes it is recognized as one of the
highest quality manufacturers of bakeware, dinnerware and rangetop cookware
products and has instituted a process for pursuing continuous quality
improvement throughout its manufacturing organization. All of the Company's four
domestic manufacturing facilities are ISO 9002 certified.
 
    SIGNIFICANT PRESENCE IN INTERNATIONAL MARKETS.  The Company's products are
sold in over 30 foreign countries, primarily in North America, Asia and Latin
America, with established positions in Canada, Korea, Australia, Japan,
Singapore, Taiwan, Hong Kong, Mexico and Brazil. The Company operates a
decorating facility in Malaysia and packaging and distribution facilities in
Canada, Singapore, Australia and Brazil. In Europe, Russia, the Middle East and
Africa, the Company's products are sold through a distribution agreement (which
accounted for less than 2% of net sales in 1997 and first quarter 1998) with
Newell that was entered into when the Company sold its consumer products
business in those territories to Newell in November 1994.
 
    PROVEN MANAGEMENT TEAM.  In the spring of 1996, a new management team,
headed by chief executive officer Peter F. Campanella, implemented a
comprehensive program to refocus and redesign the operations and objectives of
the Company. Key members of management with operational responsibility,
including Mr. Campanella, have remained with the Company following the
Recapitalization. In addition, Borden will provide management, consulting and
financial services to the Company pursuant to an agreement entered into between
the Company and Borden in connection with the Recapitalization. See "Certain
Relationships and Related Party Transactions--Between Borden and the Company."
In addition, five individuals who are senior executives of Borden are members of
the nine-person Board of Directors of the Company.
 
BUSINESS STRATEGY
 
    In the second quarter of 1996, the Company began implementing the Business
Redesign Program to, first, streamline the Company's business to focus on
profitable products and customers while reducing the Company's cost structure
and, second, adopt initiatives to increase sales while maintaining and improving
upon the cost efficiencies achieved in the first phase of the Business Redesign
Program. The first phase of the Business Redesign Program, which is largely
complete, focused on eliminating low
 
                                       58
<PAGE>
volume, low profit products and customers, reducing manufacturing costs and
reducing SG&A. From 1995 to 1997, the first phase of the Business Redesign
Program resulted in improvements in gross margin from 29% to 34% and operating
margin from (2)% to 6%. The first phase of the Business Redesign Program has
included the following initiatives:
 
    FOCUS ON PROFITABLE PRODUCTS AND CUSTOMERS.  The Company has refocused its
sales efforts on higher margin products and profitable customer accounts while
continuing to actively manage its product assortment and customer base. To
eliminate low volume, low profit products, the Company has instituted a process
of continually evaluating the profitability of its SKUs. This process includes
examining volume, gross and operating profit and inventory carrying costs. As a
result of this process, the number of SKUs distributed by the Company has been
reduced by 55%, from 3,088 at the end of 1995 to 1,403 at December 31, 1997. In
addition, based on analyses of customer account profitability, the number of
customers directly served by the Company has been reduced by 43%, from
approximately 1,048 at the end of 1995, to approximately 599 at December 31,
1997. The discontinued accounts were generally low volume customers, many of
which were transferred to distributors.
 
    REDUCE MANUFACTURING COSTS.  From 1995 to 1997, the Company implemented
systematic productivity improvements which concentrated on reducing labor,
materials and overhead costs primarily through (i) process simplification, (ii)
better process control and discipline, (iii) workforce productivity improvements
and (iv) improved raw material sourcing. As a result of implementing the
foregoing, the Company has been able to reduce the number of manufacturing
employees by 26%, from 2,629 at the end of 1995 to 1,955 at December 31, 1997.
 
    REDUCE SG&A COSTS.  The Company has reduced its SG&A expenses by $30.9
million from 1995 to 1997. These reductions were realized primarily through the
redesign of sales and administrative functions and the refocus of the Company's
advertising program on print rather than media advertising as part of the
Business Redesign Program. As a result of these initiatives, the number of SG&A
employees was reduced from 1,284 in 1995 to 1,141 in 1997 and SG&A expenses
(excluding those estimated by management to be attributable to Company-operated
outlet stores) declined from 21.9% of 1995 gross sales to 16.5% of 1997 gross
sales.
 
    IMPROVE CUSTOMER SERVICE.  To improve customer service, the Company has
reorganized its sales force to better align account representatives with
specific customers' needs and has implemented an integrated supply chain
management process which utilizes enhanced information systems to predict
customers' future inventory requirements and permit the Company to maintain a
more efficient allocation between finished goods and work-in-process inventory.
The Company's supply chain management process also enables the Company to
improve the accuracy and timeliness of filling customer orders and is intended
to allow the Company and its customers to reduce finished goods inventory. Since
the end of 1995, the Company's average on-time delivery rate has improved from
approximately 75% to approximately 95% as of December 31, 1997.
 
    With many of the objectives of the first phase of the Business Redesign
Program achieved, the Company has recently begun the second phase of the
Business Redesign Program by pursuing the following strategies:
 
    FOCUS ON STRATEGIC ACCOUNTS.  The Company intends to continue to focus on a
core group of strategic accounts identified during the first phase of the
Business Redesign Program based on their profitability, significant sales
volumes for multiple Company brands, commitment to active merchandising of
national brands and potential for growth. For each strategic account, the
Company has established a team of management, marketing and sales resources
dedicated to developing and executing a strategy to improve customer service and
increase sales to that account. Management believes that the Company's focus on
strategic accounts will improve sales by increasing shelf space at key retailers
while enhancing its brand image and presence.
 
                                       59
<PAGE>
    INTRODUCE NEW PRODUCTS THAT BUILD ON EXISTING BRANDS.  The Company's new
product strategy capitalizes on the Company's strong brand names, broad
distribution and technical expertise to introduce and market products that offer
enhanced value to consumers through new design or new functionality. The Company
plans to accelerate the development of products that extend existing categories
or enter into new categories in order to gain incremental retail shelf space and
preserve sales of existing products. The Company's objective is to generate at
least 20% of its gross sales from products introduced in the two prior years
(including product line extensions and renewals). Management believes that the
new products the Company plans to introduce in the second half of 1998 and in
1999 will increase its shelf space at key retailers.
 
    EXPAND IN INTERNATIONAL MARKETS.  The Company has made, and will continue to
make, investments in localized marketing programs and distribution and sales
capabilities in international markets. As a result, the Company is an
established supplier of bakeware and dinnerware in a number of international
markets, including Canada, Korea, Australia, Japan, Singapore, Taiwan, Hong
Kong, Mexico and Brazil. The Company believes that demand in these markets has
been driven in large part by: (i) the expansion of the middle class in many
developing countries; (ii) a strong desire for U.S. branded goods by the
emerging middle class; and (iii) the expansion of western style merchandisers in
many of these regions. Despite recent economic disruptions in Asia, the Company
believes international markets, including Asia over the long term, represent
potential growth areas for the Company.
 
    CONTINUE TO IMPLEMENT COST REDUCTION INITIATIVES.  The Company intends to
actively pursue opportunities to achieve further cost reductions in its
manufacturing operations through additional productivity improvements and
streamlining of manufacturing processes. The Company also intends to maintain or
lower SG&A as a percentage of net sales while pursuing its strategy of sales
growth through a renewed focus on strategic accounts, international expansion
and product introductions.
 
    SELECTIVELY PURSUE ACQUISITIONS.  The Company plans to selectively pursue
acquisitions which complement its business strategies. The Company believes
that, by taking advantage of its strong brand names, global sales capabilities
and retail store network, the Company can expand distribution of acquired
product lines.
 
HISTORY
 
    The Company's business began as an unincorporated division of Corning in
1915 with the invention of the heat-resistant glass that has become known as
Pyrex-Registered Trademark- brand glassware. In 1958, Corning introduced Corning
Ware-Registered Trademark- bakeware, a versatile glass-ceramic cookware product
evolved from materials originally developed for a U.S. ballistic missile
program. Corelle-Registered Trademark- dinnerware, a proprietary three-layer,
two-glass product with high mechanical strength properties and designed for
everyday use, was launched in 1970. Visions-Registered Trademark- cookware, a
lower cost, clear glass-ceramic cookware line, was introduced in 1982. In 1988,
Corning supplemented its cookware product lines with the acquisition of the
Revere business, which manufactures and distributes stainless steel cookware and
rangetop products (including, more recently, non-stick aluminum products) under
the Revere Ware-Registered Trademark- brand.
 
    The Company was formed in 1991 when Corning, in an effort to expand the
international sales of its consumer products, entered into a joint venture with
Vitro S.A., the leading glass manufacturer in Mexico. In connection with that
joint venture (which was unwound in 1993 when it did not achieve its strategic
and financial objectives), Corning contributed or licensed to the Company
substantially all of its assets used in the Corning's consumer products
business. In November 1994, Corning and the Company sold their European,
Russian, Middle Eastern and African consumer products business to Newell. See
"Business--Distribution Channels--European, Russian, Middle Eastern and African
Consumer Products Business."
 
                                       60
<PAGE>
    Pursuant to the Recapitalization Agreement, the Company will change its
corporate name to remove the word "Corning" within three years of the Closing
Date (although the Company has retained the right to use the word "CorningWare"
in its corporate name). The Company is currently in the process of determining
its new corporate name.
 
PRODUCTS
 
    The Company's products are sold primarily in the bakeware, dinnerware and
rangetop cookware categories under five core brand names. The following table
sets forth the sales of the Company's products in their primary segments from
1993 through 1997.
 
<TABLE>
<CAPTION>
                                                   1997       1996       1995       1994       1993
                                                 ---------  ---------  ---------  ---------  ---------
<S>                                              <C>        <C>        <C>        <C>        <C>
                                                                     (in millions)
Bakeware.......................................  $   206.5  $   235.3  $   212.9  $   202.9  $   175.6
Dinnerware.....................................      186.6      187.2      169.9      167.4      149.0
Rangetop Cookware..............................      109.7      140.6      151.6      175.2      157.4
Other(1).......................................       70.1       69.3       74.3       62.7       71.0
                                                 ---------  ---------  ---------  ---------  ---------
Total(2).......................................  $   572.9  $   632.4  $   608.7  $   608.2  $   553.0
                                                 ---------  ---------  ---------  ---------  ---------
                                                 ---------  ---------  ---------  ---------  ---------
</TABLE>
 
- ------------------------
 
(1) "Other" sales include selected table top and kitchen accessories
    manufactured by third parties which are coordinated with the
    Corelle-Registered Trademark- line of dinnerware and the Revere
    Ware-Registered Trademark- line of stainless steel cookware.
 
(2) Excludes $10.8 million of revenues in 1993 related to nonconsumer business
    in Brazil.
 
    BAKEWARE
 
    CORNING WARE-REGISTERED TRADEMARK-.  Corning Ware-Registered Trademark-
bakeware was introduced in 1958 as a cookware that "does it all," going from
freezer to oven to stovetop to refrigerator to table. This versatility results
from the Corning Ware-Registered Trademark- manufacturing process, which creates
a glass-ceramic material with high resistance to thermal shock. This
glass-ceramic material was originally fabricated for missile nose cones due to
its ability to withstand thermal extremes.
 
    Corning Ware-Registered Trademark- products include round, oval and square
cooking/serving vessels with glass and plastic covers and comprise three product
lines: Corning Ware-Registered Trademark- French White-TM-, Corning
Ware-Registered Trademark- Classics-TM- and Corning Ware-Registered Trademark-
Casual Elegance.-TM- Introduced in 1981, Corning Ware-Registered Trademark-
French White-TM- is a line of white fluted cooking/serving vessels. This product
line currently represents the majority of Corning Ware-Registered Trademark-
sales and is available in capacities ranging from 15 ounces to 4.5 quarts.
Corning Ware-Registered Trademark- Classics-TM-, available in white or in
decorated patterns, is comprised of a broad line of cooking/serving products
with capacities ranging from 15 ounces to five quarts. Corning
Ware-Registered Trademark- Classics-TM- products coordinate with
Corelle-Registered Trademark- dinnerware. Corning Ware-Registered Trademark-
Casual Elegance-TM-, introduced in 1995, is an upscale embossed product line
with capacities ranging from 12.5 ounces to 2.5 quarts. Another new product for
1998 currently being shipped by the Company to major retailers is Corning
Ware-Registered Trademark- Pop-Ins-TM-, a line of products designed for storing,
serving and reheating meals either at home or away from home that leverages the
Company's traditional strength in cooking/serving containers. Corning
Ware-Registered Trademark- products represented approximately 50.5% of the
Company's 1997 bakeware sales.
 
    PYREX-REGISTERED TRADEMARK-.  Pyrex-Registered Trademark- products are made
of borosilicate and tempered soda lime glass and are available in a number of
colors, shapes and sizes. The Company's Pyrex-Registered Trademark- products
comprise four product lines: Pyrex-Registered Trademark- Originals-TM-,
Sculptured Pyrex-TM-, Storage Plus-Registered Trademark- and Pyrex
Portables-Registered Trademark-. Pyrex-Registered Trademark- Originals-TM-
currently generates the largest portion of Pyrex-Registered Trademark- sales and
is available in several colors. Introduced in 1991, Sculptured Pyrex-TM-, which
is also available in several colors, has plastic covers and sells at higher
price points than Pyrex-Registered Trademark- Originals-TM-. Storage
Plus-Registered Trademark-, a line of versatile food storage containers
introduced in 1987, competes in the storage and vessel bakeware categories.
Pyrex Portables-Registered Trademark-, introduced in the fall
 
                                       61
<PAGE>
of 1995, is a food transportation system combining a glass bakeware vessel in an
insulated carrying case with hot/cold packs. Pyrex-Registered Trademark-
products represented approximately 49.5% of the Company's 1997 bakeware sales.
 
    Corning Ware-Registered Trademark- and Pyrex-Registered Trademark- products
are primarily distributed through mass merchants, department stores, specialty
retailers and the Company's outlet stores.
 
    DINNERWARE
 
    CORELLE-REGISTERED TRADEMARK-.  Corelle-Registered Trademark-, the Company's
dinnerware product line developed in 1971, is produced using a proprietary
manufacturing process. This manufacturing process combines three layers of glass
and allows the Company to manufacture a dinnerware that is durable and
break/chip resistant, as well as light, thin and stackable.
 
    The Company markets a wide range of Corelle-Registered Trademark- dinnerware
products, including plates, bowls, cups and saucers.
Corelle-Registered Trademark- dinnerware is available in more than 20 patterns,
with six to eight patterns being introduced each year to keep up with new trends
in the market. Corelle-Registered Trademark- dinnerware is available in open
stock and in sets in both the Corelle-Registered Trademark- Livingware-TM- and
the higher-end Corelle Impressions-Registered Trademark- product lines. Although
sold in various channels, the primary channels of distribution for
Corelle-Registered Trademark- dinnerware are through mass merchants and the
Company's outlet stores.
 
    RANGETOP COOKWARE
 
    REVERE WARE-REGISTERED TRADEMARK-.  The Company's Revere
Ware-Registered Trademark- brand products include stainless steel cookware that
is manufactured by the Company and aluminum non-stick cookware that is made by
other manufacturers. Non-stick skillets have experienced strong growth and
consumer acceptance since their introduction. In 1997 Revere's 12-inch polished
aluminum non-stick skillet was the best selling open stock rangetop item among
mass merchant consumers. In addition, the Company recently introduced three full
lines of non-stick aluminum cookware to leverage its success in non-stick
aluminum skillets.
 
    The Company's Revere Ware-Registered Trademark- stainless steel cookware
products are comprised of the traditional Revere Ware-Registered Trademark-
product line and the Revere Ware-Registered Trademark- Solutions-TM- and Revere
Ware-Registered Trademark- Proline-TM- product lines. The traditional Revere
Ware-Registered Trademark- line is sold to both mass merchants and department
stores and represents the majority of Revere Ware-Registered Trademark- sales.
Revere Ware-Registered Trademark- Solutions-TM-, a department store only
offering, is a cookware line that leverages classic Revere
Ware-Registered Trademark- features with contemporary styling. Certain Revere
Ware-Registered Trademark- Solutions-TM- products feature patented double
pourspouts and steam holes, steam venting nozzles and textured handles. Both the
traditional Revere Ware-Registered Trademark- and Revere
Ware-Registered Trademark- Solutions-TM- lines are available in copper clad and
aluminum disk bottom options, and in sets and open stock with capacities ranging
from 1 to 12 quarts. Revere Ware-Registered Trademark- Proline-TM- products are
professional style, stainless steel products which compete at higher price
points and are sold through department and specialty stores.
 
    VISIONS-REGISTERED TRADEMARK-.  Introduced in the United States in 1982,
Visions-Registered Trademark- products are made with a translucent glass-ceramic
material that allows customers to see what they are cooking. Products sold under
the Visions-Registered Trademark- brand include a line of rangetop cookware
manufactured in two color schemes, as well as a line of casserole products.
Visions-Registered Trademark- products are positioned as a high quality,
"starter" rangetop cookware set and, in addition, share the refrigerator/freezer
to oven versatility of Corning Ware-Registered Trademark- bakeware.
Visions-Registered Trademark- products have experienced particularly strong
sales in international markets where water-based cooking and simmering are
prevalent. The Company manages Visions-Registered Trademark- as a specialty line
focused on promotional programs and markets Visions-Registered Trademark-
products in areas where water-based cooking and simmering are relevant to a
market's or community's culture.
 
                                       62
<PAGE>
    OTHER
 
    The Company's "Other" sales include selected table top and kitchen
accessories manufactured by third parties which are coordinated with the
Corelle-Registered Trademark- line of dinnerware and the Revere
Ware-Registered Trademark- line of stainless steel cookware. These products,
which include ceramics, flatware, linens, storage ware, teapots and products for
the food service industry, are sold primarily in the Company's outlet stores and
a small portion is redistributed to other retailers.
 
    NEW PRODUCT DEVELOPMENT
 
    New products are defined by the Company as products introduced in the last
two years. New products can be classified into three groups: (i) products
introduced into new categories or serving new functions to meet consumer needs
not met by the Company's existing products, (ii) product line extensions and
(iii) product renewals. Product line extensions generally include manufacturing
changes to existing product lines, such as glass color or shape changes, whereas
product renewals generally include decorative changes to existing product lines,
such as pattern changes. Sales generated by products introduced into new
categories or serving new functions are largely incremental. Product line
extensions and product renewals often result in sales of the new product
replacing sales of an existing product.
 
    The Company emphasizes developing products that can extend existing
categories or enter new categories. Products introduced in 1996 and 1997
(including product line extensions and product renewals) generated approximately
24% of the Company's 1997 gross sales.
 
    New products are developed using a disciplined development process adopted
by the Company. This process is designed to reduce the risk associated with new
product development projects through the early assessment of a product's market
viability, and to compress product development cycle time through the use of the
Company's proprietary design and modeling software. This new product development
process leverages the Company's extensive qualitative and quantitative research
knowledge and has reduced development time, focused resources on projects with
high market potential and decreased large expenditures on product concepts with
low market viability. Under this approach, cycle time for
Corelle-Registered Trademark- decoration introductions has been cut in half from
12 months to six months and mold development time has been reduced from 18 to 12
months. The Company launched its line of Pyrex Portables-Registered Trademark-
within 11 months of developing the concept and began shipments of its full lines
of Revere Ware-Registered Trademark- aluminum non-stick cookware within nine
months of commencing product development.
 
    The Company has introduced three full lines of Revere
Ware-Registered Trademark- aluminum non-stick cookware in 1998. In order to
minimize the capital commitment required for the launch of these new lines, the
Company arranged for the manufacture of this product to be outsourced to a third
party manufacturer. In addition, the Company has begun the shipment of Corning
Ware-Registered Trademark- Pop-Ins-TM-, a line of products designed for storing,
serving and reheating meals either at home or away from home that leverages the
Company's traditional strength in cooking/serving containers. In the last six
months of 1998, the Company plans to introduce a combination of various products
serving new functions to meet consumer needs not met by the Company's existing
products, product line extensions and product renewals.
 
    In addition to developing products with new functionality, the Company has
from time to time generated revenues from new categories by licensing the
Company's brand names to manufacturers of tabletop and kitchen accessories. Due
to the strength of the Company's brands, the Company expects to seek additional
licensing opportunities in future periods. In 1997, licensing revenue was
immaterial to the Company.
 
                                       63
<PAGE>
DISTRIBUTION CHANNELS
 
    The Company's products are sold in the United States and in over 30 foreign
countries. In the United States (which accounted for approximately 75% of the
Company's net sales in 1997), the Company sells both on a wholesale basis to
retailers, distributors and other accounts that resell the Company's products
and on a retail basis through Company-operated outlet stores. During 1997,
approximately 32% of the Company's U.S. gross sales (before deductions for trade
allowances, customer-paid freight and discounts) were generated through the mass
merchant channel, approximately 34% were generated by Company-operated outlet
stores and approximately 34% were generated by other domestic channels,
including department stores, specialty retailers and retail food stores.
 
    DOMESTIC WHOLESALE
 
    In the United States, the Company sells to approximately 517 customers made
up primarily of mass merchants, department stores, specialty retailers, as well
as through other channels, including retail food stores, catalog showrooms and
direct mail.
 
    During the last two years, the Company has significantly narrowed the number
of U.S. customers it services directly (from approximately 937 accounts in 1995
to approximately 517 as of December 31, 1997) enabling the Company to focus on
high profit accounts while shifting many lower profit accounts to distributors
of the Company. In 1997, the Company's 25 largest domestic customers represented
approximately 35% of the Company's gross sales. In 1997, Wal-Mart Stores, Inc.
accounted for approximately 12% of the Company's gross sales.
 
    DOMESTIC RETAIL
 
    The Company operates a network of outlet stores in 48 states, located
primarily in outlet malls. The Company's outlet stores carry an extensive range
of the Company's products and provide the Company with an additional
distribution channel which allows the Company to profitably sell slower-moving
inventory. The Company believes that its outlet stores, which also sell
complementary kitchen accessories, have developed marketing and pricing
strategies that generate sales which supplement, rather than compete with, its
retail customers. The Company-operated outlet stores also promote and strengthen
the Company's brands, enabling the Company to provide customers a broader
assortment of products beyond products that are commonly stocked by third party
retailers.
 
    In 1998, the Company expects to close approximately five of its outlet
stores and open 10 to 15 new outlet stores. The Company continually reviews the
operating performance of its individual stores and whether any store is a
candidate for investment, remodeling or closing.
 
    INTERNATIONAL
 
    The Company's 30-person international sales force, together with localized
distribution and marketing capabilities, have allowed the Company to become an
established marketer of bakeware and dinnerware in Canada, Korea, Australia,
Japan, Singapore, Taiwan, Hong Kong, Mexico and Brazil. The Company believes
that developing localized distribution capabilities is critical to continued
growth in international markets and, as a result, has made investments in
localized distribution facilities in Brazil and Asia. For example, in an effort
to more effectively target local customers in Asia, the Company together with
Iwaki Glass Company Ltd., formed Iwaki Corning (Malaysia) Sdn. Bhd. ("ICM") in
1988. ICM, 80% owned by the Company, operates a decorating facility in Malaysia
that decorates the Corelle-Registered Trademark- and Corning
Ware-Registered Trademark- product lines to meet regional tastes and that also
houses a regional distribution facility. The Company also operates packaging and
distribution facilities in Canada, Brazil, Singapore and Australia to provide
higher levels of service to wholesale accounts in those regions. The Company
anticipates making additional future investments in overseas markets as it
develops its infrastructure to oversee and manage future international sales.
 
                                       64
<PAGE>
    EUROPEAN, RUSSIAN, MIDDLE EASTERN AND AFRICAN CONSUMER PRODUCTS BUSINESS
 
    In November 1994, Corning and the Company sold to Newell all of the
outstanding stock of Corning Consumer Limited ("CC Limited"), Corning Consumer
GmbH ("CC GmbH") and Corning Consumer S.A ("CCSA"), subsidiaries of Corning and
the Company through which the Company's consumer products business was conducted
in Europe, Russia, the Middle East, and Africa (collectively, the "Territory").
Corning and the Company granted to Newell, CC Limited, CC GmbH and CCSA the
exclusive right to use certain trademarks within the Territory. In addition,
Corning and the Company agreed for a five-year period (which expires in November
1999), subject to certain distribution agreements with Newell, not to
manufacture, sell or distribute competing products in the Territory. Currently,
Newell serves as the exclusive sales representative and distributor for certain
of the Company's products in the Territory, which represented approximately 2%
of the Company's net sales in 1997.
 
CUSTOMER SERVICE: SALES AND MARKETING SUPPORT
 
    Management believes that service is a key part of the Company's product
offering. The close relationships and frequent contact with its large customers
provide the Company with sales opportunities and application ideas. The Company,
through its sales team, provides its customers with sales and marketing support.
In addition, the Company has a dedicated consumer information center in
Waynesboro, Virginia staffed by approximately 60 consumer service
representatives who may be contacted through a toll-free number. The consumer
facility responds to consumer inquiries on topics such as warranty claims,
rebate programs and store referrals.
 
    SALES
 
    The Company's domestic customers are served by a combination of Company
salespeople and independent, commissioned representatives. The Company's top 100
accounts are serviced by the Company's direct sales force teams, each consisting
of four or five salespeople which are organized (i) by account, for the
Company's most significant customers and (ii) by region, for the balance of the
top 100 accounts. The teams are directly accountable for revenues, allowances,
promotional spending and account profitability. The Company's sales teams
dedicate their primary focus to the top 25 customers. Members of the sales teams
regularly call on the Company's customers to develop an in-depth understanding
of each customer's competitive environment and opportunities. In October 1996,
the Company reorganized its sales force to better align the strengths of account
representatives with specific customer account needs. Smaller wholesale accounts
are serviced by approximately 40 independent, commissioned sales
representatives. The Company's 30-person international sales force, with
personnel located in ten countries, work with local retailers and distributors
to optimize product assortment, consumer promotions and advertising for local
preferences.
 
    MARKETING SUPPORT
 
    The Company provides its customers with extensive marketing support. The
Company conducts extensive research on housewares industry trends, including
consumer color and design preferences. The Company uses this data to optimize
its product mix and selection. The Company also develops distinct packaging and
product assortments for certain customer segments so that they may differentiate
themselves from other retailers selling Company products.
 
    The Company collaborates with its largest customers to develop and implement
effective merchandising strategies, providing, for example, plan-o-grams and
computerized shelf planning. Furthermore, for such strategic accounts, the
Company designs and sets up in-store promotional displays for products,
including new product introductions. Due to the Company's knowledge of consumer
trends and marketing expertise in the dinnerware category, the Company has been
appointed the category manager for dinnerware by a leading mass merchant. As
category manager, the Company, using the
 
                                       65
<PAGE>
knowledge and expertise it has assembled in its business, along with retail
point of sale information, develops and presents analyses and proposals
regarding merchandising, pricing and marketing strategies for that customer.
 
    The Company's marketing support includes a broad program of advertising, as
well as the promotions described above. The Company funds national television
and print advertising campaigns, linked to major spring and fall buying periods,
provides cooperative advertising allowances to its customers and arranges
campaigns that advertise Company products in conjunction with complementary
products. The Company's recent joint Corning Ware-Registered Trademark-/Campbell
Soup campaign is an example of promotions conducted with complementary products.
 
                                       66
<PAGE>
MANUFACTURING AND DISTRIBUTION FACILITIES
 
    The Company utilizes five primary manufacturing facilities (four in the
United States and one outside of the United States) and seven principal
packaging and distribution centers (two in the United States and five outside of
the United States).
 
    The table below summarizes certain data for each of the Company's principal
properties, including its manufacturing and distribution facilities.
 
<TABLE>
<CAPTION>
LOCATION                                        PRIMARY USE                     FACILITY
- -------------------------------------  ------------------------------  --------------------------
<S>                                    <C>                             <C>          <C>
                                                                        SQ. FEET      OWN/LEASE
                                                                       -----------  -------------
DOMESTIC:
Charleroi, Pennsylvania..............          Manufacturing               603,332       Own
Clinton, Illinois....................    Manufacturing/Distribution        660,000       Own
Corning, New York....................          Manufacturing               375,000       Own
Corning, New York(1).................           Headquarters                50,000      Lease
Greencastle, Pennsylvania............           Distribution             1,210,000       Own
Martinsburg, West Virginia...........          Manufacturing               416,000       Own
Waynesboro, Virginia.................     Consumer Service Center           89,800       Own
 
INTERNATIONAL:
Johor, Malaysia(2)...................    Manufacturing/Distribution         64,000    Own/Lease
Ontario, Canada......................           Distribution                94,349      Lease
Singapore............................           Distribution                63,700      Lease
Sao Paulo, Brazil....................           Distribution                 2,000      Lease
Sydney, Australia....................           Distribution                66,000      Lease
</TABLE>
 
- ------------------------------
 
(1) The Company will lease its corporate headquarters from Corning until October
    1, 1999.
 
(2) The building housing the Malaysia facility is owned by ICM, a subsidiary
    that is 80% owned by the Company. The land on which the facility is located
    is leased pursuant to a 60-year lease expiring in 2048.
 
    In addition, the Company and Corning have entered into a supply contract
pursuant to which Corning will supply manufacturing capacity for
Pyrex-Registered Trademark- bakeware products at Corning's Greenville, Ohio
facility to the Company for three years.
 
INFORMATION TECHNOLOGY
 
    The Company leverages information technology to reduce complexity, speed
processes and provide valued services and information to its customers. The
Company employs a supply chain management system that integrates demand
forecasting, inventory planning and distribution requirement planning. This
system directly links the material resource planning, master production
scheduling and capacity resource planning systems. Computer-aided coordination
of these systems allows the Company to optimize its inventory mix to reduce the
risk of products being out-of-stock and, when integrated with the Company's
order fulfillment system described below, results in enhanced customer service
levels while reducing inventory levels. In addition, the Company's information
systems are used to track future inventory requirements to permit the Company to
maintain a more efficient allocation between finished goods and work-in-process
inventory.
 
    Increasingly, the Company's customers desire to purchase products on a "just
in time" basis, leading to more frequent, smaller orders and reduced lead times.
The Company operates advanced electronic data interchange ("EDI") and order
fulfillment systems, which allow the Company to improve the accuracy and
timeliness of order fulfillment despite an increased number of orders and
reduced lead times. The Company receives approximately 87% of all customer order
items via EDI. The Company's EDI system allows customers to monitor the status
of their orders from purchase order to shipment and
 
                                       67
<PAGE>
to receive advance shipment notices that aid customer ability to manage their
inventories. These processes have improved the Company's customer service levels
and have enhanced the ability of the Company and its customers to reduce their
inventories.
 
    Another aspect of the Company's use of information systems to enhance
customer service is the Company's vendor managed inventory ("VMI") system. With
its VMI system, the Company electronically monitors inventory levels of
participating customers and places orders for the customer (or in the case of
customers participating in the Company's co-managed inventory system, formulates
and proposes orders for the customer's approval). This monitoring, made possible
by the VMI system, also allows the Company to anticipate the needs of its
customers and enhances the Company's ability to manage production scheduling.
The EDI and VMI systems allow less costly order placement and increase the
accuracy and timeliness of order processing while enabling the customer and the
Company to decrease inventory levels without losing sales due to products being
out of stock. In addition, the Company has developed extensive information
databases to conduct detailed analysis of orders, sales, customer service levels
and inventory and to identify trends in these items.
 
    The Company has a centralized distribution system in Greencastle,
Pennsylvania that enables the Company to fill, in a single consolidated
shipment, customer orders comprised of different glass product lines (e.g.,
Corning Ware-Registered Trademark- and Pyrex-Registered Trademark-) and products
sourced from third parties. Consolidated shipments significantly aid and
simplify customers' management of inventories and contribute to decreased
shipping costs. Because few houseware manufacturers possess a similar
centralized distribution system, the Company believes that the system represents
a competitive advantage over many other manufacturers of bakeware or dinnerware.
See "--Information Technology."
 
    Pursuant to the transition services agreement entered into on the Closing
Date, Corning will continue to provide the Company with certain data processing
services, including those supporting the Company's financial systems. Prior to
the termination of the transition services agreement in April 2000, the Company
intends to establish independent data processing capability for its financial
reporting system and certain other functions. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Overview--Separation
from Corning; Transaction Related Charges."
 
IMPACT OF THE YEAR 2000 ISSUE
 
    The year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year, as well as hardware
that is designed with similar constraints. Any of the Company's computer
programs and hardware that have date-sensitive functions may recognize a date
using "00" as the year 1900 rather than the year 2000. This could result in a
system failure or miscalculations causing disruptions in operations including,
among other things, a temporary inability to process transactions, send invoices
or engage in similar normal business activities.
 
    Corrective action to address the year 2000 issue began in the second quarter
of 1996, with the establishment of a program office to manage year 2000
activities. The Company is utilizing both internal and external resources to
identify, correct and test the Company's hardware and software for year 2000
compliance. In April 1997, the Company completed a comprehensive inventory of
its computer systems. The inventory resulted in an impact assessment that was
completed in October 1997. The findings of the assessment, together with the
need to establish system independence from Corning, led the Company to embark on
a comprehensive systems replacement project.
 
    The Company is in the process of implementing a comprehensive enterprise
resource management system. This system will replace roughly 90% of the
Company's business transaction systems. The remaining 10%, comprised of benefits
administration and payroll, will be outsourced to a year 2000 compliant service
bureau. Implementation of these new systems is expected to be completed by April
1, 1999. In addition, the Company is resolving year 2000 issues related to plant
process control systems, non-data related computer control systems and supplier
and customer year 2000 compliance. While
 
                                       68
<PAGE>
management cannot reasonably estimate the cost of implementation of all systems
necessary to comply with year 2000 dating, significant investments in
information systems will total in excess of $16.5 million by the year 2000. Any
remaining costs are not expected to have a material impact on the financial
position or results of operations of the Company in any year.
 
    The Company intends its year 2000 date conversion project to be completed on
a timely basis so as to not significantly impact business operations. If the
necessary modifications and conversions are not completed as planned, the year
2000 issue may have a material impact on the Company. Also, although the
Company's systems do not rely significantly on systems of other companies, the
Company cannot provide assurance that failure of third parties to address the
year 2000 issue will not have an adverse impact on the Company.
 
RAW MATERIALS AND SUPPLIES
 
    The Company purchases its raw materials on the spot market and through
long-term contracts with suppliers, including for the supply agreement between
the Company and Corning pursuant to which Corning will supply the Company with
manufacturing capacity for certain of the Company's Pyrex-Registered Trademark-
bakeware products for three years. See "Certain Relationships and Related Party
Transactions-- Between Corning and the Company--Supply Agreement." Sand, soda
ash, borax, limestone, lithia-containing spars, alumina, cullet, stainless
steel, copper and corrugated packaging materials are the principal raw materials
used by the Company. All of these materials are available from various suppliers
and the Company is not limited to any single supplier for any of these
materials. Management believes that adequate quantities of these materials are
and will continue to be available from various suppliers. However, the
replacement of certain raw material suppliers has in the past, and may in the
future, have an adverse effect on the Company's operations and financial
performance and significant increases in the cost of any of the principal raw
materials used by the Company could have a material adverse effect on its
results of operations. The Company's molded plastic products and certain
components of its kitchenware products are manufactured from plastic resin,
which is produced from petrochemical intermediates. Plastic resin prices may
fluctuate as a result of changes in natural gas and crude oil prices and the
capacity, supply and demand for resin and the petrochemical intermediates from
which it is produced. The Company sources certain products, such as non-stick
aluminum rangetop products, from third party suppliers. The Company believes
that alternative sources of supply at competitive prices are available from
other manufacturers of substantially identical products.
 
    The melting units operated by the Company require either electric or natural
gas energy input. Back-up procedures and systems to replace the primary source
of these energy inputs are in place in each of the Company's relevant
facilities. Ongoing programs exist within each of the Company's glass melting
facilities to reduce energy consumption. Furthermore, rates for electric and
natural gas have been fixed contractually in each of the Company's plants to
avoid the negative impact of market fluctuations in prices. The Company does not
engage in any hedging activities for commodity trading relating to its supply of
raw materials.
 
INTELLECTUAL PROPERTY
 
    The Company owns numerous United States and foreign trademarks and trade
names and has applications for the registration of trademarks and trade names
pending in the United States and abroad. The Company's most significant owned
trademarks and/or tradenames include Corelle-Registered Trademark-,
Revere-Registered Trademark-, Revere Ware-Registered Trademark- and
Visions-Registered Trademark-. The other two most significant trademarks used by
the Company are Corning Ware-Registered Trademark- and
Pyrex-Registered Trademark-. Upon the consummation of the Recapitalization on
April 1, 1998, Corning granted to the Company fully paid, royalty-free licenses
to use the Corning Ware-Registered Trademark- trademark, servicemark and
tradename and the Pyroceram-Registered Trademark- trademark in the field of
housewares and to use the Pyrex-Registered Trademark- trademark in the field of
durable consumer products. These licenses are exclusive, worldwide licenses,
subject to the prior exclusive licenses granted to Newell and certain of its
subsidiaries in the
 
                                       69
<PAGE>
Territory (see "--Distribution Channels--European, Russian, Middle Eastern and
African Consumer Products Business") and provide for renewable ten-year terms,
which the Company may renew indefinitely. The Company has also granted to Newell
and certain of its subsidiaries an exclusive license of the
Vision-Registered Trademark- and Visions-Registered Trademark- trademarks in the
Territory until November 1999. In addition, in connection with the
Recapitalization, the Company entered into an agreement with Corning under which
the Company is licensed to continue to use "Corning" in connection with the
Company's business for three years (or up to five years in the case of certain
molds used in the manufacturing process).
 
    The Company also owns and has the exclusive right to use numerous United
States and foreign patents, and has patent applications pending in the United
States and abroad. In addition to its patent portfolio, the Company possesses a
wide array of unpatented proprietary technology and know-how. The Company also
licenses certain intellectual property rights to or from third parties.
 
    Concurrently with the Recapitalization, Corning granted to the Company a
fully paid, royalty-free license of patents and know-how (including evolutionary
improvements) owned by Corning that pertain to or have been used in the
Company's business. Furthermore, the Company and Corning entered into a
five-year technology support agreement (renewable at the option of the Company
for an additional five years), pursuant to which Corning will provide to the
Company (at the Company's option) engineering, manufacturing technology, and
research and development services, among others, at Corning's standard internal
rates.
 
    The Company believes that its patents, trademarks, trade names, service
marks and other proprietary rights are important to the development and conduct
of its business and the marketing of its products. As such, the Company
vigorously protects its intellectual property rights. In some cases, litigation
or other proceedings may be necessary to defend against or assert claims of
infringement, to enforce patents issued to the Company or its licensors, to
protect trade secrets, know-how or other intellectual property rights owned by
the Company, or to determine the scope and validity of the proprietary rights of
the Company or of third parties. There can be no assurance that the Company will
prevail in any such litigation.
 
    On May 12, 1998, the Company received two letters from Rubbermaid
Incorporated alleging that Corning Ware-Registered Trademark- Pop-Ins-TM-
infringe four patents owned by Rubbermaid Incorporated. The letters request that
the Company cease and desist from making, using, offering to sell, and selling
Corning Ware-Registered Trademark- Pop-Ins-TM- and provide to Rubbermaid a full
accounting of sales of such products. The Company is in the process of
investigating the validity of this claim.
 
COMPETITION
 
    The market for the Company's products is highly competitive. Competition in
the United States is affected not only by the large number of domestic
manufacturers but also by the large volume of foreign imports. In addition,
recently the Company has experienced increased competition in the United States
from low-cost Asian competitors and expects this trend to continue in the
future. The Company's major bakeware, dinnerware and cookware competitors for
domestic sales include Newell, Rubbermaid Inc., Ekco Housewares Inc.,
Pfaltzgraff Co., Lenox Inc., The Meyer Corporation, Inc. and T-Fal Corporation.
 
    The market for housewares outside the United States and Europe is relatively
fragmented. The competitive landscape differs by country and region.
Internationally, depending on the country or region, the Company competes with
other U.S. companies operating abroad, locally manufactured private label goods
and international companies competing in the worldwide bakeware, dinnerware and
rangetop cookware categories. Major competitors abroad include Durand Verrerie
Christallerie D'Arquey, Lipper International Inc., Newell, Vitro S.A., NEG
(Nippon Electric Glass) and Schott Glaswerke.
 
                                       70
<PAGE>
    Several of the Company's competitors are larger, may be less leveraged and
have greater financial resources than the Company following the completion of
the Transactions. In addition, there are no substantial regulatory or other
barriers to the entry of new competitors into the industry.
 
    A number of factors affect competition in the sale of bakeware, dinnerware
and rangetop cookware manufactured and/or sold by the Company, including
quality, price competition from competitors and price point parameters
established by the Company's various distribution channels. The Company has,
from time to time, experienced price and market share pressure from certain
competitors in certain product lines, particularly in the bakeware category
where metal products of competitors have created retailer price and margin
pressures, and in the rangetop cookware category where non-stick aluminum
products have increased their share of rangetop cookware sales at the expense of
stainless steel products due to the durability and ease of cleaning of new
non-stick coatings.
 
    Shelf space is a key factor in determining retail sales of bakeware,
dinnerware and rangetop cookware products. A competitor that is able to maintain
or increase the amount of retail space allocated to its product may gain a
competitive advantage for that product, and in recent fiscal quarters the
Company has lost shelf space in its distribution channels to certain of its
competitors. See "Risk Factors--Risks Related to Realizing Objectives of the
Business Redesign Program" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations." The allocation of retail space
is influenced by many factors, including brand name recognition, quality and
price of the product, level of service by the manufacturer and promotions.
 
    In addition, new product introductions are an important factor in the
categories in which the Company's products compete. Other important competitive
factors are brand identification, style, design, packaging and the level of
service provided to customers. The importance of these competitive factors
varies from customer to customer and from product to product. See "Risk
Factors--Development of New Products." There can be no assurance that the
Company will be able to compete successfully against current and future sources
of competition or that the current and future competitive pressures faced by the
Company will not adversely affect its profitability or financial performance.
 
ENVIRONMENTAL MATTERS
 
    The Company's facilities and operations are subject to certain federal,
state, local and foreign laws and regulations relating to environmental
protection and human health and safety, including those governing wastewater
discharges, air emissions, and the use, generation, storage, treatment,
transportation and disposal of hazardous and non-hazardous materials and wastes
and the remediation of contamination associated with such disposal. Because of
the nature of its business, the Company has incurred, and will continue to
incur, capital and operating expenditures and other costs in complying with and
resolving liabilities under such laws and regulations. The Company believes it
is in substantial compliance with applicable environmental laws and regulations,
and does not believe it has material liabilities under such laws and
regulations. However, there can be no assurance that compliance with, or
liabilities under, such laws and regulations, or the discovery of contamination,
will not have a material adverse effect on the Company in the future.
 
    Certain of the Company's facilities have lengthy manufacturing histories
and, over such time, have used or generated and disposed of substances which are
or may be considered hazardous. In addition, certain of these facilities are
located on properties that had been used for various industrial purposes prior
to the Company's occupancy. The Company has been involved in the remediation of
historic contamination at certain of these facilities and is currently
undertaking additional subsurface investigations in order to assess certain
potential soil and groundwater contamination at other facilities. Pursuant to
the terms and conditions of the Recapitalization Agreement, Corning has agreed
to indemnify the Company for certain costs and expenses that may be incurred in
the future by the Company arising from pre-Recapitalization environmental
events, conditions or matters and as to which notice is provided
 
                                       71
<PAGE>
within specified time periods. Corning has agreed to indemnify the Company for
(i) 80% of such costs and expenses up to an aggregate of $20.0 million and (ii)
100% of such costs and expenses in excess of $20.0 million. The Company believes
that, based on currently available information and the terms and conditions of
Corning's indemnification obligations under the Recapitalization Agreement, any
liability of the Company that is reasonably likely to arise out of any of these
environmental conditions and activities would not result in a material adverse
effect on the Company. However, management cannot predict with certainty whether
future events, such as changes in existing laws and regulations, the discovery
of contamination or other environmental conditions not currently known to the
Company, the occurrence of new contamination or other environmental conditions
or developments that could impair the Company's ability to obtain
indemnification from Corning, may result in the Company having to bear
environmental costs not currently planned for by the Company. Accordingly, it is
possible that such additional environmental liabilities could result in a
material adverse effect on the Company. See "Risk Factors--Environmental
Regulation."
 
GOVERNMENTAL REGULATION
 
    The Company is subject to various federal, state and local laws affecting
its business, including various environmental, health, fire and safety
standards. See "--Environmental Matters." The Company is also subject to the
Fair Labor Standards Act and various state laws governing such matters as
minimum wage requirements, overtime and other working conditions and citizenship
requirements. The Company believes that its operations are in material
compliance with applicable laws and regulations.
 
EMPLOYEES
 
    As of March 31, 1998, the Company had approximately 3,150 full-time
employees, approximately 1,950 of whom were covered by collective bargaining
agreements. The Company's collective bargaining agreements are as follows:
 
<TABLE>
<CAPTION>
               PLANT                                    UNION                    EXPIRATION OF CONTRACT
- ------------------------------------  -----------------------------------------  ----------------------
<S>                                   <C>                                        <C>
Charleroi, Pennsylvania               Aluminum Brick & Glass                           January 1, 1999
                                      Workers International
                                      Union, Local 53G
Clinton, Illinois                     International Association of                       April 1, 2001
                                      Machinists and Aerospace
                                      Workers, District Lodge 123
Corning, New York                     American Flint Glass Workers                     January 1, 1999
                                      Union, Local 100
Greencastle, Pennsylvania             American Flint Glass Workers                       July 31, 1999
                                      Union, Local 1024
                                      United Plant Guards Workers of                   August 31, 1999
                                      America, Local 12
Johor, Malaysia                       Kesatuan Pekeria-Pekeria                           June 30, 2000
Ontario, Canada                       Brewery, General and                                 May 1, 1999
                                      Professional Workers
Sydney, Australia                     Australian Workers Union,                           May 31, 1999
                                      Glass and Containers Industry Branch
</TABLE>
 
    The Company believes that its relationship with its employees is
satisfactory. The Company has not experienced any union activities resulting in
work slowdowns or work stoppages during the past five years.
 
                                       72
<PAGE>
    Upon the consummation of the Recapitalization on April 1, 1998, hourly
employees of the Pressware facility in Corning, New York were offered employment
by the Company. Approximately 260, or 70% of such employees accepted employment
with the Company. Pressware personnel not accepting such offer of employment
will continue as employees of Corning and Corning will continue to make
available their services to the Company. The Company will reimburse Corning for
the corporate expenses related to such employees.
 
LEGAL PROCEEDINGS
 
    The Company has been engaged in, and will continue to be engaged in, the
defense of product liability claims related to its products, particularly its
bakeware and cookware product lines. The Company maintains product liability
coverage, subject to certain deductibles and maximum coverage levels that the
Company believes is adequate and in accordance with industry standards.
 
    In addition to product liability claims, the Company is involved from time
to time in various lawsuits or threatened litigation in the ordinary course of
business, none of which the Company believes could have a material adverse
effect on the Company if decided adversely.
 
    On May 12, 1998, the Company received two letters from Rubbermaid
Incorporated alleging that Corning Ware-Registered Trademark- Pop-Ins-TM-
infringe four patents owned by Rubbermaid Incorporated. The letters request that
the Company cease and desist from making, using, offering to sell, and selling
Corning Ware-Registered Trademark- Pop-Ins-TM- and provide to Rubbermaid a full
accounting of sales of such products. The Company is in the process of
investigating the validity of this claim.
 
                                       73
<PAGE>
                                   MANAGEMENT
 
DIRECTORS AND EXECUTIVE OFFICERS
 
    The following table sets forth information regarding the executive officers
and directors of the Company following the Recapitalization.
 
<TABLE>
<CAPTION>
NAME                                      AGE                          POSITION
- ------------------------------------      ---      -------------------------------------------------
<S>                                   <C>          <C>
C. Robert Kidder....................          53   Director and Chairman of the Board
Peter F. Campanella.................          52   Director, President and Chief Executive Officer
Edward A. Gilhuly...................          38   Director
Clifton S. Robbins..................          40   Director
Scott M. Stuart.....................          38   Director
William H. Carter...................          44   Director
Nancy A. Reardon....................          45   Director
William F. Stoll, Jr................          49   Director
Anthony P. Deasey...................          49   Senior Vice President--Finance and Chief
                                                   Financial Officer
George F. Knight....................          41   Vice President, Treasurer and Controller
Clark S. Kinlin.....................          37   Senior Vice President--Sales and Marketing
Twilver Gordon......................          58   Vice President--Manufacturing and Engineering
Thomas C. O'Brien...................          54   Vice President, Secretary and General Counsel
</TABLE>
 
    C. ROBERT KIDDER was elected a Director and Chairman of the Board of the
Company on April 1, 1998. He was elected a Director, Chairman of the Board and
Chief Executive Officer of Borden, Inc. on January 10, 1995, and continues in
those positions. Prior to that he was Chairman of the Board of Duracell
International, Inc. and Duracell, Inc. from August 1991 through October 1995;
Chairman of the Board and Chief Executive Officer of both companies from April
1992 through September 30, 1995; Chairman of the Board, President and Chief
Executive Officer of both companies from August 1991 until April 1992; and
President and Chief Executive Officer of both companies from June 1988 until
August 1991. He is also a director of Electronic Data Systems Corporation, AEP
Industries Inc. and Morgan Stanley, Dean Witter & Co.
 
    PETER F. CAMPANELLA was elected a Director of the Company on April 1, 1998,
and has been its President and Chief Executive Officer since April 1996. From
1994 to 1996, he was Senior Vice President and General Manager of Corning's
Science Products Division, and from 1990 to 1994, he was Vice President and
General Manager of that division. He joined Corning in 1971 and has held various
sales, marketing and general management positions.
 
    EDWARD A. (NED) GILHULY has been a director of the Company since April 1,
1998. He has been a member of KKR & Co., LLC, the limited liability company
which serves as the general partner of KKR, since 1996, was a General Partner of
KKR and has been a General Partner of KKR Associates, L.P. since January 1995.
He is a Director of Owens-Illinois, Inc., Union Texas Petroleum and Layne
Christensen Company.
 
    CLIFTON S. ROBBINS has been a director of the Company since April 1, 1998.
He has been a member of KKR & Co., LLC, the limited liability company which
serves as the general partner of KKR, since 1996, was a General Partner of KKR
and has been a General Partner of KKR Associates, L.P. since January 1995. He
has been a Director of Borden, Inc. since December 1994, and is also a Director
of Act III
 
                                       74
<PAGE>
Cinemas, Inc., AEP Industries Inc., Border, Inc., IDEX Corporation, Glenisla
Group, Ltd., KinderCare Learning Centers, Inc., Newsquest Media Group, PLC and
Regal Cinemas, Inc.
 
    SCOTT M. STUART has been a director of the Company since April 1, 1998. He
has been a member of KKR & Co., LLC, the limited liability company which serves
as the general partner of KKR, since 1996, was a General Partner of KKR, and has
been a General Partner of KKR Associates, L.P. since January 1995. He has been a
Director of Borden, Inc. since December 1994, and is also a Director of AEP
Industries Inc., KSL Recreation Corporation, Newsquest Capital, PLC and World
Color Press, Inc.
 
    WILLIAM H. CARTER has been a director of the Company since April 1, 1998. He
was elected Executive Vice President and Chief Financial Officer of Borden, Inc.
effective April 3, 1995. Prior to that, since 1987, he was a partner in Price
Waterhouse LLP. He is a Director of BCP Management, Inc. and AEP Industries,
Inc.
 
    NANCY A. REARDON has been a director of the Company since April 1, 1998. She
was elected Senior Vice President, Human Resources and Corporate Affairs, of
Borden, Inc. effective March 3, 1997. Previously she was Senior Vice
President-Human Resources and Communications for Duracell International, Inc.
from 1991 through February 1997.
 
    WILLIAM F. STOLL, JR. has been a director of the Company since April 1,
1998. He was elected Senior Vice President and General Counsel of Borden, Inc.
effective July 1, 1996. Prior to joining Borden at that time, he was a Vice
President of Westinghouse Electric Corporation since 1993, and served as its
Deputy General Counsel from 1988 to 1996. He is a Director of BCP Management,
Inc.
 
    ANTHONY P. DEASEY was elected Senior Vice President--Finance and Chief
Financial Officer on June 8, 1998. Prior to joining the Company he was Senior
Vice President of Finance and Information Systems at Rollerblade Inc. from 1996
to 1998. Prior to that he was Vice President, Chief Financial Officer of Church
and Dwight Co. Inc., from 1988 to 1995.
 
    GEORGE F. KNIGHT is Vice President, Treasurer and Controller of the Company,
while continuing as Vice President, Mergers and Acquisitions Finance, of Borden,
Inc. He was named to his Borden position effective January 1, 1998, after
joining Borden, as Director of that function in April 1997. Prior to that he was
with Duracell International, Inc., as Controller for the Asia-Pacific region
from 1994 and as Assistant Corporate Controller from 1992 to 1994.
 
    CLARK S. KINLIN was elected Senior Vice President-Sales and Marketing of the
Company on April 1, 1998. Prior to that he was Vice President-Sales and
Marketing of the Company since September 1997, and from 1995 to 1997, he was
Vice President of Marketing. From 1993 to 1995, he was Director of Retail
Development of the Company, and from 1990 to 1993, he was Manager of Sales and
Marketing of Corning's Telecommunications Products Division. He joined Corning
in 1981.
 
    TWILVER GORDON was elected Vice President-Manufacturing and Engineering of
the Company on April 1, 1998. Prior to that he was Director-Manufacturing and
Engineering since June 1996. From 1995 to 1996, he was Manufacturing Manager of
the Company; from 1993 to 1995, he was plant manager at the Company's Corning,
New York, Pressware facility; and from 1988 to 1993, he was Director-Customer
Services and Distribution at the Company's Greencastle, Pennsylvania, facility.
He joined Corning in 1968.
 
    THOMAS C. O'BRIEN was elected Vice President, Secretary and General Counsel
of the Company on April 1, 1998. Prior to that he had been Assistant General
Counsel of Corning since February 1993, and Secretary and Legal Counsel of the
Company since January 1992. He joined Corning in 1977.
 
EXECUTIVE COMPENSATION
 
    The following table sets forth information with respect to the compensation
paid or accrued by the Company with respect to each of its chief executive
officer and its four other most highly compensated
 
                                       75
<PAGE>
executive officers (the "named executive officers") for services rendered in all
capacities during fiscal 1997. All references in the following tables to stock
and stock options relate to awards of, and options to purchase, the common stock
(with attached preferred share purchase rights) of Corning.
 
                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                                                                              LONG-TERM COMPENSATION
                                                                                    -------------------------------------------
<S>                                 <C>        <C>          <C>        <C>          <C>          <C>            <C>
                                                 ANNUAL COMPENSATION                          AWARDS                PAYOUTS
                                    ----------------------------------------------  --------------------------  ---------------
 
<CAPTION>
                                                                          OTHER     RESTRICTED
                                                                         ANNUAL        STOCK      SECURITIES       INCENTIVE
             NAME AND                                                    COMPEN-      AWARDS      UNDERLYING         PLAN
        PRINCIPAL POSITION            YEAR      SALARY(1)     BONUS     SATION(2)     ($) (3)       OPTIONS       PAYOUTS(4)
- ----------------------------------  ---------  -----------  ---------  -----------  -----------  -------------  ---------------
<S>                                 <C>        <C>          <C>        <C>          <C>          <C>            <C>
Peter F. Campanella...............       1997   $ 273,333   $ 358,162   $  21,140    $ 664,313         8,000              --
  President and Chief Executive
  Officer
George M. Collins(5)..............       1997     210,000     179,109       4,660      359,836         4,000              --
  Vice President--Worldwide Sales
Clark S. Kinlin...................       1997     158,133     115,769       2,160      166,078         4,000              --
  Vice President--Marketing
Twilver Gordon....................       1997     146,733     114,122          --           --         2,000              --
  Director--Manufacturing And
  Engineering
Kim L. Frock(6)...................       1997     137,333      84,231         720       55,369         4,000              --
  Vice President and Chief
  Financial Officer
 
<CAPTION>
<S>                                 <C>
                                     ALL OTHER
             NAME AND                 COMPEN-
        PRINCIPAL POSITION           SATION(4)
- ----------------------------------  -----------
<S>                                 <C>
Peter F. Campanella...............   $  35,667
  President and Chief Executive
  Officer
George M. Collins(5)..............      20,431
  Vice President--Worldwide Sales
Clark S. Kinlin...................       8,236
  Vice President--Marketing
Twilver Gordon....................      12,396
  Director--Manufacturing And
  Engineering
Kim L. Frock(6)...................       6,745
  Vice President and Chief
  Financial Officer
</TABLE>
 
- ------------------------
 
(1) Reflects salary paid or deferred.
 
(2) Includes dividends on CPP Shares (as defined below) paid prior to attainment
    of the relevant performance vesting goals and tax gross-up payments.
 
(3) At the end of 1997, Messrs. Campanella, Collins, Kinlin and Gordon and Ms.
    Frock held an aggregate of 55,124; 18,479; 26,958; 0; and 5,396 shares,
    respectively, of restricted Corning common stock granted under Corning's
    Career Share Plan (such shares, "Career Shares") and under Corning's
    Corporate Performance Plans (such shares, "CPP Shares"), collectively having
    an aggregate value on December 31, 1997 of $2,034,423; $681,992; $994,920;
    $0; and $199,146, respectively.
 
    Career Shares held by Messrs. Campanella, Collins and Kinlin are fully
    vested as of the Closing Date, but are subject to transfer restrictions,
    which in the case of Mr. Campanella will be eliminated annually on a pro
    rata basis until age 60, and in the case of Mr. Kinlin will be eliminated
    annually on a pro rata basis for a period of five years commencing December
    15, 1999. Career Shares held by Ms. Frock are subject to restriction on
    transfer until she retires at or after age 60 and are subject to forfeiture
    prior to age 60, in whole, if she voluntarily terminates employment with
    Corning and, in part, if her employment is terminated by Corning. CPP Shares
    held by Messrs. Campanella, Collins and Kinlin are fully vested as of the
    Closing Date, but are subject to transfer restrictions until February 1,
    2000. CPP Shares held by Ms. Frock are not fully vested as of the Closing
    Date and are subject to both forfeiture and transfer restrictions until
    February 1, 2000.
 
    Dividends are paid to each named executive officer on all shares of
    restricted Corning common stock held by them.
 
(4) Represents amounts contributed by Corning as matching contributions to
    Corning's tax-qualified Investment Plan and amounts paid in cash to the
    named executive officers for benefits which would have been available to
    them pursuant to the terms of the Corning Investment Plan but for certain
    limitations on compensation which may be taken into account under tax-
    qualified plans as imposed pursuant to the Internal Revenue Code of 1986, as
    amended (the "Code").
 
(5) Mr. Collins' employment with the Company recently terminated and he has
    retired from Corning.
 
(6) Ms. Frock's employment with the Company recently terminated and she has
    become an employee of Corning.
 
                                       76
<PAGE>
    The following table sets forth certain information regarding options granted
in 1997 to the named executive officers pursuant to Corning stock option plans.
 
               OPTION/SAR GRANTS IN LAST COMPLETED FISCAL YEAR(1)
 
<TABLE>
<CAPTION>
                                                                                                                POTENTIAL REALIZABLE
                                                                                                                  VALUE AT ASSUMED
                                                                                                                RATES OF STOCK PRICE
                                                                                                                  APPRECIATION FOR
                                                                      INDIVIDUAL GRANTS(2)                         OPTION TERM(3)
                                                  ------------------------------------------------------------  --------------------
<S>                                               <C>            <C>                  <C>          <C>          <C>        <C>
                                                    NUMBER OF        % OF TOTAL
                                                   SECURITIES          OPTIONS
                                                   UNDERLYING          GRANTED
                                                     OPTIONS        TO EMPLOYEES       EXERCISE    EXPIRATION    GAIN AT    GAIN AT
NAME                                                 GRANTED       IN FISCAL YEAR        PRICE        DATE         5%         10%
- ------------------------------------------------  -------------  -------------------  -----------  -----------  ---------  ---------
Peter F. Campanella.............................        8,000               0.9%       $   35.32       2/4/07   $ 177,700  $ 450,328
George M. Collins...............................        4,000               0.5%           35.32       2/4/07      88,850    225,164
Clark S. Kinlin.................................        4,000               0.5%           35.32       2/4/07      88,850    225,164
Twilver Gordon..................................        2,000               0.2%           47.00      4/23/07      59,116    149,812
Kim L. Frock....................................        4,000               0.5%           35.52       2/4/07      88,850    225,164
</TABLE>
 
- ------------------------
 
(1) No SARs were granted in 1997 to any of the named executive officers.
 
(2) The stock option agreements with Messrs. Campanella, Collins, Kinlin and Ms.
    Frock provide that one-half of the options will become exercisable on
    February 1, 1999 and the remainder will become exercisable on February 1,
    2000. The stock option agreement for Mr. Gordon provides that one-half of
    the options will become exercisable on April 24, 1998 and the remainder will
    become exercisable on April 24, 1999.
 
(3) The dollar amounts set forth under these columns are the result of
    calculations at the 5% and 10% rates established by the Commission and
    therefore are not intended to forecast future appreciation of the value of
    Corning's common stock.
 
    The following table sets forth the number of shares of Corning common stock
covered by both exercisable and unexercisable stock options as of December 31,
1997 held by the named executive officers.
 
            AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
                     FISCAL YEAR-END OPTIONS/SAR VALUES(1)
 
<TABLE>
<CAPTION>
                                                                      NUMBER OF SECURITIES
                                                                           UNDERLYING                VALUE OF UNEXERCISED
                                                                      UNEXERCISED OPTIONS            IN-THE-MONEY OPTIONS
                                                                     AT FISCAL YEAR END(2)          AT FISCAL YEAR END(3)
                                                                 ------------------------------  ----------------------------
                                          SHARES
                                         ACQUIRED       VALUE
NAME                                    ON EXERCISE   REALIZED    EXERCISABLE    UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
- -------------------------------------  -------------  ---------  -------------  ---------------  ------------  --------------
<S>                                    <C>            <C>        <C>            <C>              <C>           <C>
Peter F. Campanella..................       26,951    $ 729,111       33,540          91,843      $  306,166     $  935,742
George M. Collins....................        5,345      179,289        3,593          36,340          37,354        356,144
Clark S. Kinlin......................            0            0       15,551          14,780         161,096        122,945
Twilver Gordon.......................            0            0        6,587           2,898          59,046          7,333
Kim L. Frock.........................        2,995      126,090        6,349           5,198          53,189         15,673
</TABLE>
 
- ------------------------
 
(1) There are no SARs outstanding.
 
(2) Adjusted for spin-offs at December 31, 1996.
 
(3) Value at December 31, 1997.
 
                                       77
<PAGE>
PENSION PLAN
 
    Prior to the Closing Date, each of the named executive officers participated
in and accrued benefits under Corning's Salaried Pension Plan (the "Corning
Pension Plan"), a defined benefit plan. Benefits paid under this plan are based
upon career earnings (regular salary and cash bonuses paid under Corning's
variable compensation plans substantially as set forth in the Summary
Compensation Table) and years of credited service. The benefit formula is
reviewed and adjusted periodically for inflationary and other factors. Effective
upon commencement of employment, salaried employees may contribute to the
Corning Pension Plan two percent of their annual earnings up to the social
security wage base. Such employees will receive for each year of credited
service after December 31, 1990 an additional amount of pension benefit
reflecting the value of the increased voluntary contribution. Benefits under the
Corning Pension Plan are not subject to social security or other offsets.
 
    Corning maintains a non-qualified Supplemental Pension Plan (the
"Supplemental Plan"), pursuant to which it will pay to certain executives,
including each of the named executive officers, amounts approximately equal to
the difference between the benefits provided for under the Corning Pension Plan
and benefits which would have been provided thereunder but for limitations on
benefits which may be provided under tax-qualified plans, as set forth in the
Code.
 
    Effective upon the Closing Date, the Company will establish a pension plan
("CCP Pension Plan") providing pension benefits which are substantially similar
in aggregate economic value to those provided by the Corning Pension Plan. It is
anticipated that executives who participated in the Supplemental Plan will
participate, as of the Closing Date, in the Borden Inc. Executive Supplemental
Pension Plan.
 
    Maximum annual benefits calculated under the straight life annuity option
form of pension payable to participants at age 60 are illustrated in the table
set forth below. The table below does not reflect any limitations on benefits
imposed by the Code. Assets of the Corning Pension Plan and Supplemental Plan
will not be transferred to the Company from Corning in connection with the
Recapitalization and the Company will have no obligations under these plans
following the Recapitalization.
 
<TABLE>
<CAPTION>
                                          YEARS OF SERVICE
                 ------------------------------------------------------------------
<S>              <C>        <C>        <C>        <C>        <C>         <C>
 REMUNERATION       15         20         25         30          35          40
- ---------------  ---------  ---------  ---------  ---------  ----------  ----------
  $   100,000    $  26,202  $  35,559  $  44,419  $  52,784  $   61,149  $   69,514
      200,000       56,202     75,559     94,419    112,784     131,149     149,514
      300,000       86,202    115,559    144,419    172,784     201,149     229,514
      400,000      116,202    155,559    194,419    232,784     271,149     309,514
      500,000      146,202    195,559    244,419    292,784     341,149     389,514
      600,000      176,202    235,559    294,419    352,784     411,149     469,514
      700,000      206,202    275,559    344,419    412,784     481,149     549,514
      800,000      236,202    315,559    394,419    472,784     551,149     629,514
      900,000      266,202    355,559    444,419    532,784     621,149     709,514
    1,000,000      296,202    395,559    494,419    592,784     691,149     789,514
    1,100,000      326,202    435,559    544,419    652,784     761,149     869,514
    1,200,000      356,202    475,559    594,419    712,784     831,149     949,514
    1,300,000      386,202    515,559    644,419    772,784     901,149   1,029,514
    1,400,000      416,202    555,559    694,419    832,784     971,149   1,109,514
    1,500,000      446,202    595,559    744,419    892,784   1,041,149   1,189,514
</TABLE>
 
    It is estimated that Messrs. Campanella, Collins, Kinlin, Gordon and Ms.
Frock, who currently have 25, 24, 15, 28 and 9 years of credited service,
respectively, would receive each year (if they worked to age 60) $360,639,
$98,030, $175,128, $74,868 and $148,072, respectively, under the Corning
Salaried Pension Plan, the Supplemental Plan and the CCP Pension Plan (if
applicable) in the aggregate. Messrs. Campanella's, Collins', Kinlin's and
Gordon's employment with Corning recently terminated and each became employees
of the Company.
 
                                       78
<PAGE>
EMPLOYEE AGREEMENTS
 
    The Company has in place a severance practice pursuant to which it will
provide to all salaried employees upon certain terminations of employment,
compensation in amounts ranging between eight weeks of base salary (for
employees with at least one year of service) and 52 weeks of base salary (for
employees with at least 20 years of service).
 
COMPENSATION OF MEMBERS OF BOARD
 
    Members of the Board will receive no cash compensation for their service on
the Board or its committees. Members of the Board will receive reimbursement for
traveling costs and other out-of-pocket expenses incurred in attending Board and
committee meetings.
 
RETENTION PROGRAM
 
    The Company has adopted a retention program (the "Retention Program") for 84
key employees (73 of its domestic employees and 11 of its international
employees). The Retention Program provides that its participants will receive
retention payments (ranging from three to six months of base salary) if they
remain employed with the Company for six months following the Closing Date. The
Recapitalization Agreement provides that Corning shall reimburse the Company for
its payments made under the Retention Program following the Closing Date.
 
TRANSITION ARRANGEMENTS
 
    Corning has entered into transition agreements with eight officers of the
Company providing certain cash and stock incentives and assurances regarding the
treatment of outstanding Corning equity grants to such officers.
 
1998 STOCK PURCHASE AND OPTION PLAN
 
    The Company has adopted the 1998 Plan. The 1998 Plan provides for the sale
by CCPC Acquisition of shares of outstanding Common Stock and the issuance by
the Company of options to purchase authorized but unissued shares of Common
Stock, subject to adjustment by the Company to reflect certain events such as
stock dividends, stock splits, recapitalizations, mergers or reorganizations of
the Company. The 1998 Plan is intended to assist the Company in attracting and
retaining employees of outstanding ability and to promote the identification of
their interests with those of the Company. Unless sooner terminated by the
Company's Board of Directors, the 1998 Plan will expire ten years after
adoption. Such termination will not affect the validity of any grant under the
1998 Plan ("1998 Plan Grant") outstanding on the date of the termination. Under
the 1998 Plan, CCPC Acquisition is currently in the process of selling shares of
Common Stock, and the Company is making grants of options to purchase Common
Stock, to certain members of management of the Company. In the aggregate, the
sales of shares of Common Stock by CCPC Acquisition and the option grants by the
Company will represent approximately 12.4% of the Company's fully diluted Common
Stock.
 
    The Compensation Committee of the Board of Directors will administer the
1998 Plan, including, without limitation, the determination of the employees to
whom 1998 Plan Grants will be made, the number of shares of Common Stock subject
to each 1998 Plan Grant, and the various terms of 1998 Plan Grants. The
Compensation Committee of the Board of Directors may from time to time amend the
terms of any 1998 Plan Grant, but, except for adjustments made upon a change in
the Common Stock by reason of a stock split, spin-off, stock dividend, stock
combination or reclassification, recapitalization, reorganization,
consolidation, change of control, or similar event, such action shall not
adversely affect the rights of any participant under the 1998 Plan without such
participant's consent. The Board of Directors retain the right to amend, suspend
or terminate the 1998 Plan.
 
                                       79
<PAGE>
MANAGEMENT STOCKHOLDERS' AGREEMENTS
 
    In connection with the 1998 Plan, the Company and each such employee will
enter into a management stockholders' agreement and a stock option agreement.
The management stockholders' agreement and related sale participation agreement
will (i) place restrictions on each such employee's ability to transfer shares
of Common Stock, including a right of first refusal in favor of the Company,
(ii) provide each such employee the right to participate pro rata in certain
sales of Common Stock by CCPC Acquisition or its affiliates and (iii) provide
CCPC Acquisition and its affiliates the right to require each such employee to
participate pro rata in certain sales of Common Stock by CCPC Acquisition or its
affiliates. The management stockholders' agreements will also grant piggyback
registration rights to each such employee pursuant to the CCPC Acquisition
Registration Rights Agreement. In addition, the management stockholders'
agreement will give the Company the right to purchase shares and options held by
each such employee upon termination of employment for any reason and will permit
each such employee to sell stock and options to the Company, and the Company
will be required to purchase such stock, in the event of death, disability or
retirement after turning 65 years of age.
 
                                       80
<PAGE>
                             PRINCIPAL STOCKHOLDERS
 
    The following table sets forth information with respect to the beneficial
ownership of the Company's Common Stock as of April 1, 1998 by (i) each person
who is known by the Company to beneficially own more than 5% of the Company's
Common Stock, (ii) each of the Company's directors who own Common Stock, (iii)
each of the named executive officers who own Common Stock and (iv) all directors
and executive officers as a group. Unless otherwise indicated, the address of
each person named in the table below is Corning Consumer Products Company,
E-Building, Houghton Park, Corning, New York 14831.
 
<TABLE>
<CAPTION>
                                                                                  BENEFICIAL        PERCENTAGE OF
                                                                                 OWNERSHIP OF       COMMON STOCK
NAME AND ADDRESS OF BENEFICIAL OWNER                                           COMMON STOCK(1)       OUTSTANDING
- ----------------------------------------------------------------------------  ------------------  -----------------
<S>                                                                           <C>                 <C>
KKR Associates, L.P.(2) ....................................................        21,477,000             89.5%
c/o Kohlberg Kravis Roberts & Co., L.P.
9 West 57th Street
New York, New York 10019
  Edward A. Gilhuly.........................................................          --                 --
  Clifton S. Robbins........................................................          --                 --
  Scott M. Stuart...........................................................          --                 --
Corning Incorporated .......................................................         1,920,000              8.0%
One Riverfront Plaza
Corning, NY 14831
Peter F. Campanella(3)......................................................           180,000            *
Twilver Gordon(3)...........................................................            45,000            *
Clark S. Kinlin(3)..........................................................            80,000            *
Thomas C. O'Brien(3)........................................................            25,000            *
All executive officers and directors as a group (13 persons, excluding
Messrs. Gilhuly, Robbins and Stuart)(4).....................................           330,000              1.4%
</TABLE>
 
- --------------------------
 
 * Less than 1%.
 
(1) The amounts and percentages of Common Stock beneficially owned are reported
    on the basis of regulations of the Commission governing the determination of
    beneficial ownership of securities. Under the rules of the Commission, a
    person is deemed to be a "beneficial owner" of a security if that person has
    or shares "voting power," which includes the power to vote or to direct the
    voting of such security, or "investment power," which includes the power to
    dispose of or to direct the disposition of such security. A person is also
    deemed to be a beneficial owner of any securities of which that person has a
    right to acquire beneficial ownership within 60 days. Under these rules,
    more than one person may be deemed to be a beneficial owner of securities as
    to which such person has an economic interest. The percentage of class
    outstanding is based on 24,000,000 shares of Common Stock outstanding on the
    Closing Date. It is expected that after completion of the Transactions, CCPC
    Acquisition will secondarily sell shares of Common Stock, and the Company
    will issue options to purchase Common Stock, to management of the Company,
    which in the aggregate will represent approximately 12.4% of the fully
    diluted common equity of the Company.
 
(2) Shares of Common Stock shown as owned by KKR Associates, L.P. ("KKR
    Associates") are owned of record by CCPC Acquisition. KKR Associates is the
    sole general partner of Whitehall Associates, L.P., which is the managing
    member of BW Holdings, LLC. BW Holdings, LLC owns 100% of the outstanding
    capital stock of CCPC Acquisition. Messrs. Gilhuly, Robbins and Stuart (who
    are directors of the Company) and Messrs. Henry R. Kravis, George E.
    Roberts, James H. Greene, Jr., Paul E. Raether, Michael W. Michelson,
    Michael T. Tokarz, Perry Golkin and Robert I. MacDonnel, as general partners
    of KKR Associates, may be deemed to share beneficial ownership of any shares
    beneficially owned by KKR Associates, but disclaim any such beneficial
    ownership. The address of KKR Associates is 9 West 57th Street, New York,
    New York 10019.
 
(3) The Company has granted Messrs. Campanella, Gordon, Kinlin and O'Brien
    options to purchase 540,000, 135,000, 240,000 and 75,000 shares of Common
    Stock, respectively, of which 20% will vest each year beginning one year
    after the date of grant.
 
(4) The Company currently is in the process of implementing the 1998 Plan which
    will provide for ownership of up to 12.4% of the outstanding Common Stock by
    members of management, including the shares acquired by Messrs. Campanella,
    Gordon, Kinlin and O'Brien.
 
                                       81
<PAGE>
              CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
 
BETWEEN CORNING AND THE COMPANY
 
    Historically, Corning has provided the Company with certain administrative,
technical and other services, as well as providing office space and
manufacturing capacity in facilities owned or leased by Corning. Additionally,
Corning has made available to the Company certain manufacturing technology and
other intellectual property, including the Pyrex-Registered Trademark- and
Corning Ware-Registered Trademark-  trademarks. In connection with the
Recapitalization, Corning and the Company entered into several agreements
relating to the provision by Corning of goods and services to the Company, the
sharing of certain facilities with the Company and the royalty-free license to
use certain trademarks, tradenames, service marks, patents and know-how of
Corning, in each case, on terms substantially as described below.
 
    HEADQUARTERS LEASE AND TRANSITION SERVICES AGREEMENT.  Corning has entered
into agreements with the Company pursuant to which Corning will continue to make
available to the Company certain office space and related facilities currently
used as the Company's headquarters until October 1, 1999 and certain
administrative services which the Company currently obtains from or through
Corning until April 1, 2000. Corning has agreed to provide this office space and
these services on substantially the same terms as offered by Corning during the
12-month period immediately prior to the Recapitalization and reflected in the
Company's historical financial statements. The Company has the right to
terminate the headquarters' lease on 30 days' notice and the right to terminate
the receipt of specific administrative services on 90 days' notice. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Overview--Separation from Corning; Transaction Related Charges."
 
    SUPPLY AGREEMENT.  Certain of the Company's Pyrex-Registered Trademark-
bakeware products are manufactured at a facility owned by Corning in Greenville,
Ohio. The Company and Corning entered into a supply agreement pursuant to which
Corning will supply the Company with manufacturing capacity for these products
for three years. Orders under the supply agreement will be billed at Corning's
actual cost (consisting of standard costs plus variances allocable to production
of the Company's products) determined in the same manner as during the 12-month
period immediately prior to the Recapitalization and reflected in the Company's
historical financial statements.
 
    TECHNOLOGY SUPPORT AGREEMENT.  The Company obtains certain manufacturing
technology, engineering and research and development services from Corning. The
Company and Corning entered into a technology support agreement pursuant to
which Corning will continue to make these manufacturing and technology services
available to the Company. In addition, the technology support agreement will
provide for Corning and the Company to conduct an annual technology review, for
each other's benefit, relating to patents and technical know-how in the field of
the Company's products. The manufacturing technology and engineering services to
be provided by Corning will be made available to the Company on the same basis
as has been made available to the Company during the 12-month period immediately
prior to the Recapitalization. The technology support agreement will have a term
of five years and will be renewable for an additional five-year term at the
option of the Company.
 
    ADMINISTRATIVE SERVICES AGREEMENT.  In order to enable the Company to
continue its sales operations in Australia, Brazil, Mexico, China, Hong Kong,
India, Japan, Korea, Singapore and Taiwan, Corning or its affiliates will
provide certain administrative and distribution services and sublease space to
the Company. The administrative services agreement governing these arrangements
has a term of two years expiring on April 1, 2000 and is on terms designed to
replicate substantially the economic terms of the arrangements in effect during
the 12 months immediately prior to the Recapitalization.
 
    SHARED FACILITY AGREEMENT.  The Company's Corning, New York manufacturing
facility is adjacent to, and shares certain assets and infrastructure (e.g.,
waste disposal and utility service facilities) with, Corning's Fallbrook Plant.
The Company and Corning have entered into a shared facility agreement pursuant
to which the parties have provided for the continued use and sharing of these
assets and infrastructure facilities and the allocation of the costs associated
with these items (which costs are
 
                                       82
<PAGE>
generally allocated according to the parties' relative use of such shared asset)
until April 1, 2008, or until such earlier time as the Company or Corning shall
have terminated its obligation to accept or provide such assets and
infrastructure facilities in accordance with the agreement.
 
    LICENSE AGREEMENTS.  Corning and the Company entered into certain license
agreements pursuant to which Corning granted to the Company exclusive licenses
to use the Corning Ware-Registered Trademark- trademark, service mark and trade
name and Pyroceram-Registered Trademark- trademark in the field of housewares
and the Pyrex-Registered Trademark- trademark in the field of durable consumer
products (which the Company currently does not sell) for ten years (each
renewable at the option of the Company on the same terms and conditions for an
unlimited number of successive ten-year terms). In addition, Corning entered
into agreements with the Company providing for the Company's continued use of
the Corning name for up to three years (and up to five years for molds and
molded products with the Corning name embedded thereon). Corning granted to the
Company a fully paid, royalty free license of patents and know-how (including
evolutionary improvements) owned by Corning that pertain to or have been used in
the Company's business. See "Business--Intellectual Property."
 
    CORNING GLASS CENTER AND SUPPLY ARRANGEMENTS.  Pursuant to the
Recapitalization Agreement, the Company will maintain its commercial
arrangements with the Corning Glass Center (the Corning employee store) for a
period of ten years following the Closing Date on a pricing basis of the
Company's standard costs plus 15% and will continue to sell products to
Corning's manufacturing facilities for a period of five years in substantially
the same quantities and terms as during the twelve month period prior to March
2, 1998.
 
BETWEEN BORDEN AND THE COMPANY
 
    In connection with the Recapitalization, the Company and Borden entered into
an agreement pursuant to which Borden will provide management, consulting and
financial services to the Company. Services will be provided in such areas as
the preparation and evaluation of strategic, operating, financial and capital
plans and the development and implementation of compensation and other incentive
programs. In consideration for such services, Borden will be entitled to an
annual fee of $1.5 million, plus reimbursement for certain expenses and
indemnification against certain liabilities. This agreement is terminable by
either party upon 30 days written notice. In connection with the
Recapitalization and in consideration of services provided by Borden in
arranging, structuring and negotiating the terms of the Recapitalization and the
related financing transactions, the Company paid Borden transaction and
financing fees and expenses of $8.0 million. The transaction and financing fees
and expenses are included in the fees and expenses incurred in connection with
the Recapitalization described under "Summary" and were funded through the
stated sources of funds disclosed thereunder. In addition, Borden and its
affiliates provided all of the interim debt financing for the Recapitalization,
a portion of which was refinanced by borrowings under the Credit Facilities and
the remainder was refinanced with the proceeds of the Old Notes.
 
TAX SHARING AGREEMENT
 
    The Company and certain of its subsidiaries have entered into a tax sharing
arrangement with CCPC Acquisition pursuant to which the Company and such
subsidiaries will be required to compute their provision for income taxes on a
separate return basis and pay to, or receive from, CCPC Acquisition the separate
U.S. federal and applicable state and local income tax return liability or
credit so computed, if any.
 
STOCKHOLDERS' AGREEMENT; REGISTRATION RIGHTS AGREEMENT
 
    The Company, CCPC Acquisition and Corning entered into the Stockholders'
Agreement which provides for certain restrictions and rights regarding the
transfer of Common Stock, including a right of first refusal in favor of, first,
the Company and, if the Company refuses, then CCPC Acquisition with
 
                                       83
<PAGE>
respect to the Common Stock owned by Corning. After the Closing Date, Corning
will have the right to participate pro rata in certain sales of Common Stock
through the Corning Tag Along, and CCPC Acquisition will have the right to
require Corning to participate pro rata in certain sales of Common Stock by CCPC
Acquisition through the Corning Drag Along. In addition, the Stockholders'
Agreement provides Corning with unlimited "piggy back" registration rights and
one demand registration right.
 
    CCPC Acquisition has the right, under certain circumstances and subject to
certain conditions, to require the Company to register under the Securities Act
shares of Common Stock held by it pursuant to the CCPC Acquisition Registration
Rights Agreement. Such registration rights will generally be available to CCPC
Acquisition until registration under the Securities Act is no longer required to
enable it to resell the Common Stock owned by it without restriction. The CCPC
Acquisition Registration Rights Agreement provides, among other things, that the
Company will pay all registration expenses in connection with the first six
demand registrations requested by CCPC Acquisition and in connection with any
registration commenced by the Company as a primary offering in which CCPC
Acquisition participates through "piggyback" registration rights granted under
the CCPC Acquisition Registration Rights Agreement.
 
                                       84
<PAGE>
                          DESCRIPTION OF CAPITAL STOCK
 
GENERAL
 
    The Certificate of Incorporation of the Company authorizes 45,000,000 shares
of Common Stock and 5,000,000 shares of preferred stock, par value $0.01 per
share (the "Preferred Stock"), of which 2,000,000 shares have been designated as
the Junior Preferred Stock. As of April 1, 1998, the outstanding capital stock
of the Company consisted of 24,000,000 shares of Common Stock and 1,200,000
shares of the Junior Preferred Stock. The following summaries of certain
provisions of the Common Stock and the Preferred Stock do not purport to be
complete and are subject to, and qualified in their entirety by, the provisions
of the Certificate of Incorporation and Bylaws of the Company.
 
COMMON STOCK
 
    Holders of Common Stock are entitled to one vote per share on all matters to
be voted upon by the stockholders of the Company, and do not have cumulative
voting rights. The holders of Common Stock are entitled to receive ratably such
dividends, if any, as may be declared from time to time by the Board of
Directors out of funds legally available for that purpose, subject to
preferences that may be applicable to any outstanding Preferred Stock and any
other provisions of the Company's Certificate of Incorporation. Holders of
Common Stock have no preemptive or other rights to subscribe for additional
shares. No shares of Common Stock are subject to redemption or a sinking fund.
In the event of any liquidation, dissolution or winding up of the Company, after
payment of the debts and other liabilities of the Company, and subject to the
rights of holders of shares of Preferred Stock, holders of Common Stock are
entitled to share pro rata in any distribution to the stockholders. All of the
outstanding shares of Common Stock are fully paid and nonassessable.
 
PREFERRED STOCK
 
    The Board of Directors has the authority, without action by the
stockholders, to designate and issue Preferred Stock in one or more series and
to designate the rights, preferences and privileges of each series, any or all
of which may be greater than the rights of the Common Stock. It is not possible
to state the actual effect of the issuance of any shares of Preferred Stock upon
the rights of holders of the Common Stock until the Board of Directors
determines the specific rights of the holders of such Preferred Stock. However,
the effects might include, among other things, restricting dividends on the
Common Stock, diluting the voting power of the Common Stock, impairing the
liquidation rights of the Common Stock and delaying or preventing a change in
control of the Company without further action by the stockholders.
 
    Holders of Junior Preferred Stock are entitled to receive cumulative
dividends at the rate of $0.75 per share per calendar quarter. Such dividends
may be paid, at the option of the Company, in cash or in additional shares of
Junior Preferred Stock, or in a combination thereof. The Company may at any time
at its option redeem the Junior Preferred Stock at a redemption price per share
equal to $25.00, plus an amount equal to all unpaid accumulated dividends
thereon (the "Redemption Price"). Upon a Change of Control, the holders of the
Junior Preferred Stock have the right to require the Company to purchase the
Junior Preferred Stock at the Redemption Price, subject to the restrictions
contained in the Credit Facilities and subject to the prior payment of the
Change of Control Payment relating to the Exchange Notes and any other amounts
due pursuant to indebtedness of the Company as a result of the Change of
Control. In the event of a liquidation, dissolution or winding up of the
Company, the holders of Junior Preferred Stock shall be entitled to an amount
equal to $25.00 per share, plus an amount equal to all accumulated dividends
thereon. Holders of Junior Preferred Stock are not entitled to voting or
conversion rights.
 
                                       85
<PAGE>
                        DESCRIPTION OF CREDIT FACILITIES
 
    The Credit Facilities are provided by a syndicate of banks and other
financial institutions (the "Lenders") led by The Chase Manhattan Bank, as
administrative agent (the "Administrative Agent"), Salomon Brothers Holding
Company Inc, as syndication agent, and Bankers Trust Company, as documentation
agent. The Credit Facilities provide for the Term Loans of $200.0 million and
the Revolving Credit Facility of up to $275.0 million. The Revolving Credit
Facility includes borrowing capacity of up to $25.0 million for letters of
credit, and up to $25.0 million for short-term swing line loans. The final
maturity of the Term Loans is the date that is 8 1/2 years after closing of the
Credit Facilities on April 9, 1998 (the "Closing") and provides for nominal
annual amortization. The final maturity of loans under the Revolving Credit
Facility is the date that is 7 years after the Closing. Certain capitalized
terms used in this section have the meanings set forth in the Credit Facilities.
 
    The interest rate for the Term Loans fluctuates based on leverage and
initially is Adjusted LIBOR plus 2.00%. The interest rate under the Revolving
Credit Facility fluctuates based on leverage and initially is ABR plus 1.75%.
The Company may elect interest periods of 1, 2, 3 or 6 months (or 9 or 12
months, to the extent available from all the Lenders) for Adjusted LIBOR
borrowings. Calculation of interest is on the basis of actual days elapsed in a
year of 360 days (or 365 or 366 days, as the case may be, in the case of ABR
loans based on the Prime Rate) and interest in arrears is payable at the end of
each interest period and, in any event, at least every 3 months or 90 days, as
the case may be. ABR is the Alternate Base Rate, which is the highest of Chase's
Prime Rate, the Federal Funds Effective Rate plus 0.5% and the Base CD Rate plus
1.0%. Adjusted LIBOR and the Base CD Rate will at all times include statutory
reserves to the extent actually incurred (and, in the case of the Base CD Rate,
FDIC assessment rates).
 
    The Company will pay a commitment fee at a rate which will fluctuate based
on leverage and initially is 0.375% per annum on the undrawn portion of the
commitments in respect of the Credit Facilities, payable quarterly in arrears
after the Closing. The commitment fees will at all times be calculated based on
the actual number of days elapsed over a 365-day year.
 
    The Company will pay a letter of credit fee equal to a rate per annum equal
to the margin for Adjusted LIBOR loans under the Revolving Credit Facility, less
0.125%, on the aggregate face amount of outstanding letters of credit under the
Revolving Credit Facility, payable in arrears at the end of each quarter and
upon the termination of the Revolving Credit Facility, in each case for the
actual number of days elapsed over a 365-day year. In addition, the Company will
pay to the fronting bank, for its own account, (a) a fronting fee of 0.125% per
annum on the aggregate face amount of outstanding letters of credit, payable in
arrears at the end of each quarter and upon the termination of the Revolving
Credit Facility, in each case for the actual number of days elapsed over a
365-day year, and (b) customary issuance, amendment and administration fees.
 
    The Credit Facilities contain provisions under which commitment fees and
interest rates will be adjusted in increments based on the ratio (the "Leverage
Ratio") of consolidated total debt to consolidated adjusted EBITDA in effect
from time to time. Subject to certain exceptions, the margin for Adjusted LIBOR
loans for the Term Loans and the Revolving Credit Facility, and the commitment
fee rate thereunder, will be, in the case of a Leverage Ratio (i) greater than
or equal to 6.0:1.0, 2.50%, 2.25% and 0.425%, respectively, (ii) greater than or
equal to 5.5:1.0 but less than 6.0:1.0, 2.25%, 2.00% and 0.375%, respectively,
(iii) greater than or equal to 5.0:1.0 but less than 5.5:1.0, 2.00%, 1.75% and
0.375%, respectively, (iv) greater than or equal to 4.5:1.0 but less than
5.0:1.0, 1.75%, 1.50% and 0.350%, respectively, (v) greater than or equal to
4.0:1.0 but less than 4.5:1.0, 1.50%, 1.25% and 0.30%, respectively, (vi)
greater than or equal to 3.25:1.0 but less than 4.0:1.0, 1.50%, 1.00% and 0.25%,
respectively and (vii) less than 3.25:1.0, 1.50%, 0.75% and 0.225%,
respectively, with the margin for ABR loans being 1.0% less than the
corresponding margin for Adjusted LIBOR loans (but not less than 0%).
 
    The Term Loans are subject to mandatory prepayment with (a) the net cash
proceeds of certain non-ordinary-course asset sales or other dispositions of
property by the Company and its subsidiaries,
 
                                       86
<PAGE>
except to the extent that such proceeds are reinvested in the business of the
Company and its subsidiaries within a specified time period and subject to
certain other exceptions, (b) a portion of excess cash flow (as defined in the
Credit Facilities) and (c) the net proceeds of certain issuances of debt
obligations of the Company and its subsidiaries. Voluntary prepayments and
Revolving Credit Facility commitment reductions are permitted in whole or in
part at the option of the Company, in minimum principal amounts, without premium
or penalty, subject to reimbursement of certain of the Lenders' costs under
certain conditions.
 
    The Company's obligations under the Credit Facilities are required to be
secured by a perfected first priority pledge of and security interest in (i) all
the common stock of existing and subsequently acquired direct domestic
subsidiaries of the Company (which at Closing consisted of Revere Ware
Corporation; the Company intends to transfer substantially all of its assets to
a new subsidiary after the Closing, the stock of which will also be pledged as
described above) other than common stock of unrestricted subsidiaries and
certain subsidiaries created or acquired in connection with permitted
acquisitions, (ii) evidences of indebtedness in excess of $5.0 million received
by the Company in connection with asset sales other than sales in the ordinary
course of business or in connection with permitted sale-leasebacks and (iii) 65%
of the common stock of existing and subsequently acquired material direct
foreign subsidiaries. In addition, indebtedness under the Credit Facilities is
required to be guaranteed by each existing and subsequently acquired domestic
subsidiary of the Company (which at Closing consisted of Revere Ware
Corporation), subject to certain exceptions. See "Description of the Exchange
Notes-- Subordination" and "Risk Factors--Subordination" and "--Encumbrances on
Assets to Secure Credit Facilities."
 
    The Credit Facilities contain customary covenants and restrictions on the
Company's ability to, among other things, incur debt, grant liens, sell assets,
pay dividends, make investments, prepay or redeem the Exchange Notes, enter into
leases or make capital expenditures. In addition, the Credit Facilities provide
that the Company (i) must meet or exceed a ratio of consolidated adjusted EBITDA
to consolidated adjusted interest expense of 1.50 to 1.00 in 1998 and gradually
increasing through the maturity of the Term Loans to 2.50 to 1.00 and (ii) must
not exceed a ratio of consolidated total debt to consolidated adjusted EBITDA of
6.50 to 1.00 at the end of the last quarter of 1998 and gradually decreasing
through the maturity of the Term Loans to 4.00 to 1.00.
 
    Events of default under the Credit Facilities include (i) nonpayment of
principal with no period of grace and nonpayment of interest, fees or other
amounts due under the Credit Facilities within 5 days after the same become due;
(ii) material breach of any representation or warranty; (iii) failure to observe
any other term, covenant or agreement contained in the Credit Facilities beyond
an applicable period of grace; (iv) the failure by the Company or its
subsidiaries (1) to make payments in respect of any indebtedness when due which
continues after the applicable period of grace or (2) to perform or observe any
condition or covenant or any other event occurring or condition existing
relating to indebtedness of the Company or its subsidiaries and the effect of
such failure, event or condition is to cause or to permit the holders of such
indebtedness to cause such indebtedness to be due prior to its stated maturity,
and, in the case of both clause (1) and (2), the aggregate amount of such
indebtedness, together with the aggregate amount of all other indebtedness in
default, equals or exceeds $20.0 million; (v) certain events of bankruptcy or
insolvency with respect to the Company or material subsidiaries; (vi) the
occurrence of certain events under the Employee Retirement Income Security Act
of 1974, as amended; (vii) any material provision of the pledge agreement
ceasing to create a valid security interest or the guaranty of the Company's
obligations ceasing to be effective; (viii) judgments against the Company or its
subsidiaries of $20.0 million or greater that remain unsatisfied, unvacated or
unstayed pending appeal for a period of 60 days after entry; or (ix) a change of
control.
 
    A "change of control" under the Credit Facilities will occur if (a) KKR, its
affiliates and management of the Company cease to own in the aggregate, directly
or indirectly, beneficially and of record, at least 35% of the outstanding
voting stock of the Company (other than as the result of one or more widely
 
                                       87
<PAGE>
distributed offerings of voting stock of the Company); (b) any person, entity or
"group" (within the meaning of Section 13(d) or 14(d) of the Exchange Act) have
acquired direct or indirect beneficial ownership of a percentage of the
outstanding voting stock of the Company that exceeds the percentage of such
voting stock then beneficially owned, in the aggregate, by KKR, its affiliates
and management of the Company, unless, in the case of (a) or (b) above, KKR, its
affiliates and management of the Company have, at such time, the right or the
ability by voting power, contract or otherwise to elect or designate for
election a majority of the Board of Directors of the Company; or (c) at any time
"continuing directors" shall not constitute a majority of the Board of Directors
of the Company. Continuing directors of the Company under the Credit Facilities
is defined in the Credit Facilities to include members of the Board of Directors
at Closing, individuals who have been members of the Board of Directors for the
preceding 12 months, individuals nominated by KKR and individuals nominated by a
majority of the then continuing directors.
 
                                       88
<PAGE>
                               THE EXCHANGE OFFER
 
GENERAL
 
    The Company hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal (which
together constitute the Exchange Offer), to exchange up to $200.0 million
aggregate principal amount of Exchange Notes for a like aggregate principal
amount of Old Notes properly tendered on or prior to the Expiration Date and not
withdrawn as permitted pursuant to the procedures described below. The Exchange
Offer is being made with respect to all of the Old Notes.
 
    As of the date of this Prospectus, $200.0 million aggregate principal amount
of the Old Notes is outstanding. This Prospectus, together with the Letter of
Transmittal, is first being sent on or about           , 1998, to all holders of
Old Notes known to the Company. The Company's obligation to accept Old Notes for
exchange pursuant to the Exchange Offer is subject to certain conditions set
forth under "--Certain Conditions to the Exchange Offer" below. The Company
currently expects that each of the conditions will be satisfied and that no
waivers will be necessary.
 
PURPOSE OF THE EXCHANGE OFFER
 
    The Old Notes were issued on May 5, 1998 in a transaction exempt from the
registration requirements of the Securities Act. Accordingly, the Old Notes may
not be reoffered, resold, or otherwise transferred unless so registered or
unless an applicable exemption from the registration and prospectus delivery
requirements of the Securities Act is available.
 
    In connection with the issuance and sale of the Old Notes, the Company
entered into the Registration Rights Agreement, which requires the Company to
file with the Commission a registration statement relating to the Exchange Offer
not later than 100 days after the date of issuance of the Old Notes, and to use
its best efforts to cause the registration statement relating to the Exchange
Offer to become effective under the Securities Act not later than 200 days after
the date of issuance of the Old Notes and the Exchange Offer to be consummated
not later than 230 days after the date on which the Old Notes were issued. A
copy of the Registration Rights Agreement has been filed as an exhibit to the
Registration Statement.
 
    The Exchange Offer is being made by the Company to satisfy its obligations
with respect to the Registration Rights Agreement. The term "holder," with
respect to the Exchange Offer, means any person in whose name Old Notes are
registered on the books of the Company or any other person who has obtained a
properly completed bond power from the registered holder, or any person whose
Old Notes are held of record by The Depository Trust Company. Other than
pursuant to the Registration Rights Agreement, the Company is not required to
file any registration statement to register any outstanding Old Notes. Holders
of Old Notes who do not tender their Old Notes or whose Old Notes are tendered
but not accepted would have to rely on exemptions to registration requirements
under the securities laws, including the Securities Act, if they wish to sell
their Old Notes.
 
    The Company is making the Exchange Offer in reliance on the position of the
Staff of the Commission as set forth in certain interpretive letters addressed
to third parties in other transactions. However, the Company has not sought its
own interpretive letter and there can be no assurance that the staff would make
a similar determination with respect to the Exchange Offer as it has in such
interpretive letters to third parties. Based on these interpretations by the
Staff, the Company believes that the Exchange Notes issued pursuant to the
Exchange Offer in exchange for Old Notes may be offered for resale, resold and
otherwise transferred by a Holder (other than any Holder who is a broker-dealer
or an "affiliate" of the Company within the meaning of Rule 405 of the
Securities Act) without further compliance with the registration and prospectus
delivery requirements of the Securities Act, provided that such
 
                                       89
<PAGE>
Exchange Notes are acquired in the ordinary course of such Holder's business and
that such Holder is not participating, and has no arrangement or understanding
with any person to participate, in a distribution (within the meaning of the
Securities Act) of such Exchange Notes. See "--Resale of Exchange Notes." Each
broker-dealer that receives Exchange Notes for its own account in exchange for
Old Notes, where such Old Notes were acquired by such broker-dealer as a result
of market-making activities or other trading activities, must acknowledge that
it will deliver a prospectus in connection with any resale of such Exchange
Notes. See "Plan of Distribution."
 
TERMS OF THE EXCHANGE
 
    The Company hereby offers to exchange, subject to the conditions set forth
herein and in the Letter of Transmittal accompanying this Prospectus, $1,000 in
principal amount of Exchange Notes for each $1,000 in principal amount of the
Old Notes. The terms of the Exchange Notes are identical in all material
respects to the terms of the Old Notes for which they may be exchanged pursuant
to this Exchange Offer, except that the Exchange Notes will generally be freely
transferable by holders thereof and will not be subject to any covenant
regarding registration. The Exchange Notes will evidence the same indebtedness
as the Old Notes and will be entitled to the benefits of the Indenture. See
"Description of Exchange Notes."
 
    The Exchange Offer is not conditioned upon any minimum aggregate principal
amount of Old Notes being tendered for exchange.
 
    The Company has not requested, and does not intend to request, an
interpretation by the staff of the Commission with respect to whether the
Exchange Notes issued pursuant to the Exchange Offer in exchange for the Old
Notes may be offered for sale, resold or otherwise transferred by any holder
without compliance with the registration and prospectus delivery provisions of
the Securities Act. Instead, based on an interpretation by the staff of the
Commission set forth in a series of no-action letters issued to third parties,
the Company believes that Exchange Notes issued pursuant to the Exchange Offer
in exchange for Old Notes may be offered for sale, resold and otherwise
transferred by any holder of such Exchange Notes (other than any such holder
that is a broker-dealer or is an "affiliate" of the Company within the meaning
of Rule 405 under the Securities Act) without compliance with the registration
and prospectus delivery provisions of the Securities Act, provided that such
Exchange Notes are acquired in the ordinary course of such holder's business and
such holder has no arrangement or understanding with any person to participate
in the distribution of such Exchange Notes and neither such holder nor any other
such person is engaging in or intends to engage in a distribution of such
Exchange Notes. Since the Commission has not considered the Exchange Offer in
the context of a no-action letter, there can be no assurance that the Staff of
the Commission would make a similar determination with respect to the Exchange
Offer. Any holder who is an affiliate of the Company or who tenders in the
Exchange Offer for the purpose of participating in a distribution of the
Exchange Notes cannot rely on such interpretation by the staff of the Commission
and must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction. Each holder, other
than a broker-dealer, must acknowledge that it is not engaged in, and does not
intend to engage in, a distribution of Exchange Notes. Each broker-dealer that
receives Exchange Notes for its own account in exchange for Old Notes, where
such Old Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. A broker-dealer
may not participate in the Exchange Offer with respect to Old Notes acquired
other than as a result of market-making activities or other trading activities.
See "Plan of Distribution."
 
    Interest on the Exchange Notes will accrue from the last Interest Payment
Date on which interest was paid on the Old Notes so surrendered or, if no
interest has been paid on such Notes, from May 5, 1998.
 
                                       90
<PAGE>
    Tendering holders of the Old Notes shall not be required to pay brokerage
commissions or fees or, subject to the instructions in the Letter of
Transmittal, transfer taxes with respect to the exchange of the Old Notes
pursuant to the Exchange Offer.
 
EXPIRATION DATE; EXTENSION; TERMINATION; AMENDMENT
 
    The Exchange Offer will expire at 5:00 p.m., New York City time, on
               , 1998, unless the Company, in its sole discretion, has extended
the period of time for which the Exchange Offer is open (such date, as it may be
extended, is referred to herein as the "Expiration Date") . The Expiration Date
will be at least 20 business days after the commencement of the Exchange Offer
in accordance with Rule 14e-1(a) under the Exchange Act. The Company expressly
reserves the right, at any time or from time to time, to extend the period of
time during which the Exchange Offer is open, and thereby delay acceptance for
exchange of any Old Notes, by giving oral or written notice to the Exchange
Agent and by timely public announcement no later than 9:00 a.m. New York City
time, on the next business day after the previously scheduled Expiration Date.
During any such extension, all Old Notes previously tendered will remain subject
to the Exchange Offer unless properly withdrawn. The Company does not anticipate
extending the Expiration Date.
 
    The Company expressly reserves the right to (i) terminate or amend the
Exchange Offer and not to accept for exchange any Old Notes not theretofore
accepted for exchange upon the occurrence of any of the events specified below
under "--Certain Conditions to the Exchange Offer" which have not been waived by
the Company and (ii) amend the terms of the Exchange Offer in any manner which,
in its good faith judgment, is advantageous to the holders of the Old Notes,
whether before or after any tender of the Notes. If any such termination or
amendment occurs, the Company will notify the Exchange Agent and will either
issue a press release or give oral or written notice to the holders of the Old
Notes as promptly as practicable.
 
    For purposes of the Exchange Offer, a "business day" means any day other
than Saturday, Sunday or a date on which banking institutions are required or
authorized by New York State law to be closed, and consists of the time period
from 12:01 a.m. through 12:00 midnight, New York City time. Unless the Company
terminates the Exchange Offer prior to 5:00 p.m., New York City time, on the
Expiration Date, the Company will exchange the Exchange Notes for the Old Notes
on the Exchange Date.
 
PROCEDURES FOR TENDERING OLD NOTES
 
    The tender to the Company of Old Notes by a holder thereof as set forth
below and the acceptance thereof by the Company will constitute a binding
agreement between the tendering holder and the Company upon the terms and
subject to the conditions set forth in this Prospectus and in the accompanying
Letter of Transmittal.
 
    A holder of Old Notes may tender the same by (i) properly completing and
signing the Letter of Transmittal or a facsimile thereof (all references in this
Prospectus to the Letter of Transmittal shall be deemed to include a facsimile
thereof) and delivering the same, together with the certificate or certificates
representing the Old Notes being tendered and any required signature guarantees
and any other documents required by the Letter of Transmittal, to the Exchange
Agent at its address set forth below on or prior to the Expiration Date (or
complying with the procedure for book-entry transfer described below) or (ii)
complying with the guaranteed delivery procedures described below.
 
    THE METHOD OF DELIVERY OF OLD NOTES, LETTERS OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDERS. IF SUCH DELIVERY
IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL PROPERLY INSURED, WITH RETURN
RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
INSURE TIMELY DELIVERY. NO OLD NOTES OR LETTERS OF TRANSMITTAL SHOULD BE SENT TO
THE COMPANY.
 
                                       91
<PAGE>
    If tendered Old Notes are registered in the name of the signer of the Letter
of Transmittal and the Exchange Notes to be issued in exchange therefor are to
be issued (and any untendered Old Notes are to be reissued) in the name of the
registered holder (which term, for the purposes described herein, shall include
any participant in The Depository Trust Company (also referred to as a
"book-entry transfer facility") whose name appears on a security listing as the
owner of Old Notes), the signature of such signer need not be guaranteed. In any
other case, the tendered Old Notes must be endorsed or accompanied by written
instruments of transfer in form satisfactory to the Company and duly executed by
the registered holder, and the signature on the endorsement or instrument of
transfer must be guaranteed by a bank, broker, dealer, credit union, savings
association, clearing agency or other institution (each an "Eligible
Institution") that is a member of a recognized signature guarantee medallion
program within the meaning of Rule 17Ad-15 under the Exchange Act. If the
Exchange Notes and/or Old Notes not exchanged are to be delivered to an address
other than that of the registered holder appearing on the note register for the
Old Notes, the signature in the Letter of Transmittal must be guaranteed by an
Eligible Institution.
 
    The Exchange Agent will make a request within two business days after the
date of receipt of this Prospectus to establish accounts with respect to the Old
Notes at the book-entry transfer facility for the purpose of facilitating the
Exchange Offer, and subject to the establishment thereof, any financial
institution that is a participant in the book-entry transfer facility's system
may make book-entry delivery of Old Notes by causing such book-entry transfer
facility to transfer such Old Notes into the Exchange Agent's account with
respect to the Old Notes in accordance with the book-entry transfer facility's
procedures for such transfer. Although delivery of Old Notes may be effected
through book-entry transfer into the Exchange Agent's account at the book-entry
transfer facility, an appropriate Letter of Transmittal with any required
signature guarantee and all other required documents must in each case be
transmitted to and received or confirmed by the Exchange Agent at its address
set forth below on or prior to the Expiration Date, or, if the guaranteed
delivery procedures described below are complied with, within the time period
provided under such procedures.
 
    If a holder desires to accept the Exchange Offer and time will not permit a
Letter of Transmittal or Old Notes to reach the Exchange Agent before the
Expiration Date or the procedure for book-entry transfer cannot be completed on
a timely basis, a tender may be effected if the Exchange Agent has received at
its address set forth below on or prior to the Expiration Date, a letter,
telegram or facsimile transmission (receipt confirmed by telephone and an
original delivered by guaranteed overnight courier) from an Eligible Institution
setting forth the name and address of the tendering holder, the names in which
the Old Notes are registered and, if possible, the certificate numbers of the
Old Notes to be tendered, and stating that the tender is being made thereby and
guaranteeing that within three business days after the Expiration Date, the Old
Notes in proper form for transfer (or a confirmation of book-entry transfer of
such Old Notes into the Exchange Agent's account at the book-entry transfer
facility), will be delivered by such Eligible Institution together with a
properly completed and duly executed Letter of Transmittal (and any other
required documents). Unless Old Notes being tendered by the above-described
method are deposited with the Exchange Agent within the time period set forth
above (accompanied or preceded by a properly completed Letter of Transmittal and
any other required documents), the Company may, at its option, reject the
tender. Copies of the notice of guaranteed delivery ("Notice of Guaranteed
Delivery") which may be used by Eligible Institutions for the purposes described
in this paragraph are available from the Exchange Agent.
 
    A tender will be deemed to have been received as of the date when (i) the
tendering holder's properly completed and duly signed Letter of Transmittal
accompanied by the Old Notes (or a confirmation of book-entry transfer of such
Old Notes into the Exchange Agent's account at the book-entry transfer facility)
is received by the Exchange Agent, or (ii) a Notice of Guaranteed Delivery or
letter, telegram or facsimile transmission to similar effect (as provided above)
from an Eligible Institution is received by the Exchange Agent. Issuances of
Exchange Notes in exchange for Old Notes tendered
 
                                       92
<PAGE>
pursuant to a Notice of Guaranteed Delivery or letter, telegram or facsimile
transmission to similar effect (as provided above) by an Eligible Institution
will be made only against deposit of the Letter of Transmittal (and any other
required documents) and the tendered Old Notes.
 
    All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of Old Notes tendered for exchange will be determined by
the Company in its sole discretion, which determination shall be final and
binding. The Company reserves the absolute right to reject any and all tenders
of any particular Old Notes not properly tendered or not to accept any
particular Old Notes which acceptance might, in the judgment of the Company or
its counsel, be unlawful. The Company also reserves the absolute right to waive
any defects or irregularities or conditions of the Exchange Offer as to any
particular Old Notes either before or after the Expiration Date (including the
right to waive the ineligibility of any holder who seeks to tender Old Notes in
the Exchange Offer). The interpretation of the terms and conditions of the
Exchange Offer (including the Letter of Transmittal and the instructions
thereto) by the Company shall be final and binding on all parties. Unless
waived, any defects or irregularities in connection with tenders of Old Notes
for exchange must be cured within such reasonable period of time as the Company
shall determine. Neither the Company, the Exchange Agent nor any other person
shall be under any duty to give notification of any defect or irregularity with
respect to any tender of Old Notes for exchange, nor shall any of them incur any
liability for failure to give such notification.
 
    If the Letter of Transmittal is signed by a person or persons other than the
registered holder or holders of Old Notes, such Old Notes must be endorsed or
accompanied by appropriate powers of attorney, in either case signed exactly as
the name or names of the registered holder or holders appear on the Old Notes.
 
    If the Letter of Transmittal or any Old Notes or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and, unless waived by
the Company, proper evidence satisfactory to the Company of their authority to
so act must be submitted.
 
    By tendering, each holder will represent to the Company that, among other
things, the Exchange Notes acquired pursuant to the Exchange Offer are being
acquired in the ordinary course of business of the person receiving such
Exchange Notes, whether or not such person is the holder, that neither the
holder nor any such other person has an arrangement or understanding with any
person to participate in the distribution of such Exchange Notes and that
neither the holder nor any such other person is an "affiliate," as defined under
Rule 405 of the Securities Act, of the Company, or if it is an affiliate it will
comply with the registration and prospectus requirements of the Securities Act
to the extent applicable.
 
    Each broker-dealer that receives Exchange Notes for its own account in
exchange for Old Notes where such Old Notes were acquired by such broker-dealer
as a result of market-making activities or other trading activities must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Notes. See "Plan of Distribution."
 
TERMS AND CONDITIONS OF THE LETTER OF TRANSMITTAL
 
    The Letter of Transmittal contains, among other things, the following terms
and conditions, which are part of the Exchange Offer.
 
    The party tendering Notes for exchange (the "Transferor") exchanges, assigns
and transfers the Old Notes to the Company and irrevocably constitutes and
appoints the Exchange Agent as the Transferor's agent and attorney-in-fact to
cause the Old Notes to be assigned, transferred and exchanged. The Transferor
represents and warrants that it has full power and authority to tender,
exchange, assign and transfer the Old Notes and to acquire Exchange Notes
issuable upon the exchange of such tendered Notes, and that, when the same are
accepted for exchange, the Company will acquire good and unencumbered title to
the tendered Old Notes, free and clear of all liens,
 
                                       93
<PAGE>
restrictions, charges and encumbrances and not subject to any adverse claim. The
Transferor also warrants that it will, upon request, execute and deliver any
additional documents deemed by the Exchange Agent or the Company to be necessary
or desirable to complete the exchange, assignment and transfer of tendered Old
Notes or transfer ownership of such Old Notes on the account books maintained by
a book-entry transfer facility. The Transferor further agrees that acceptance of
any tendered Old Notes by the Company and the issuance of Exchange Notes in
exchange therefor shall constitute performance in full by the Company of certain
of its obligations under the Registration Rights Agreement. All authority
conferred by the Transferor will survive the death or incapacity of the
Transferor and every obligation of the Transferor shall be binding upon the
heirs, legal representatives, successors, assigns, executors and administrators
of such Transferor.
 
    The Transferor certifies that it is not an "affiliate" of the Company within
the meaning of Rule 405 under the Securities Act and that it is acquiring the
Exchange Notes offered hereby in the ordinary course of such Transferor's
business and that such Transferor has no arrangement with any person to
participate in the distribution of such Exchange Notes. Each holder, other than
a broker-dealer, must acknowledge that it is not engaged in, and does not intend
to engage in, a distribution of Exchange Notes. Each Transferor which is a
broker-dealer receiving Exchange Notes for its own account must acknowledge that
it will deliver a prospectus in connection with any resale of such Exchange
Notes. By so acknowledging and by delivering a prospectus, a broker-dealer will
not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be amended or supplemented from time
to time, may be used by a broker-dealer in connection with resales of Exchange
Notes received in exchange for Old Notes where such Old Notes were acquired by
such broker-dealer as a result of market-making activities or other trading
activities. The Company will, for a period of 90 days after the Expiration Date,
make copies of this Prospectus available to any broker-dealer for use in
connection with any such resale.
 
WITHDRAWAL RIGHTS
 
    Tenders of Old Notes may be withdrawn at any time prior to the Expiration
Date.
 
    For a withdrawal to be effective, a written notice of withdrawal sent by
facsimile transmission (receipt confirmed by telephone) or letter must be
received by the Exchange Agent at the address set forth herein prior to the
Expiration Date. Any such notice of withdrawal must (i) specify the name of the
person having tendered the Old Notes to be withdrawn (the "Depositor"), (ii)
identify the Old Notes to be withdrawn (including the certificate number or
numbers and principal amount of such Old Notes), (iii) specify the principal
amount of Notes to be withdrawn, (iv) include a statement that such holder is
withdrawing his election to have such Old Notes exchanged, (v) be signed by the
holder in the same manner as the original signature on the Letter of Transmittal
by which such Old Notes were tendered or as otherwise described above (including
any required signature guarantees) or be accompanied by documents of transfer
sufficient to have the Trustee under the Indenture register the transfer of such
Old Notes into the name of the person withdrawing the tender and (vi) specify
the name in which any such Old Notes are to be registered, if different from
that of the Depositor. The Exchange Agent will return the properly withdrawn Old
Notes promptly following receipt of notice of withdrawal. If Old Notes have been
tendered pursuant to the procedure for book-entry transfer, any notice of
withdrawal must specify the name and number of the account at the book-entry
transfer facility to be credited with the withdrawn Old Notes or otherwise
comply with the book-entry transfer facility procedure. All questions as to the
validity of notices of withdrawals, including time of receipt, will be
determined by the Company and such determination will be final and binding on
all parties.
 
    Any Old Notes so withdrawn will be deemed not to have been validly tendered
for exchange for purposes of the Exchange Offer. Any Old Notes which have been
tendered for exchange but which are not exchanged for any reason will be
returned to the holder thereof without cost to such holder (or, in the case of
Old Notes tendered by book-entry transfer into the Exchange Agent's account at
the book-entry
 
                                       94
<PAGE>
transfer facility pursuant to the book-entry transfer procedures described
above, such Old Notes will be credited to an account with such book-entry
transfer facility specified by the holder) as soon as practicable after
withdrawal, rejection of tender or termination of the Exchange Offer. Properly
withdrawn Old Notes may be retendered by following one of the procedures
described under "Procedures for Tendering Old Notes" above at any time on or
prior to the Expiration Date.
 
ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF EXCHANGE NOTES
 
    Upon satisfaction or waiver of all of the conditions to the Exchange Offer,
the Company will accept, promptly on the Exchange Date, all Old Notes properly
tendered and will issue the Exchange Notes promptly after such acceptance. See
"--Certain Conditions to the Exchange Offer" below. For purposes of the Exchange
Offer, the Company shall be deemed to have accepted properly tendered Old Notes
for exchange when, as and if the Company has given oral or written notice
thereof to the Exchange Agent.
 
    For each Old Note accepted for exchange, the holder of such Old Note will
receive an Exchange Note having a principal amount equal to that of the
surrendered Old Note.
 
    In all cases, issuance of Exchange Notes for Old Notes that are accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of certificates for such Old Notes or a timely book-entry
confirmation of such Old Notes into the Exchange Agent's account at the
book-entry transfer facility, a properly completed and duly executed Letter of
Transmittal and all other required documents. If any tendered Old Notes are not
accepted for any reason set forth in the terms and conditions of the Exchange
Offer or if Old Notes are submitted for a greater principal amount than the
holder desires to exchange, such unaccepted or non-exchanged Old Notes will be
returned without expense to the tendering holder thereof (or, in the case of Old
Notes tendered by book-entry transfer into the Exchange Agent's account at the
book-entry transfer facility pursuant to the book-entry transfer procedures
described above, such non-exchanged Old Notes will be credited to an account
maintained with such book-entry transfer facility) as promptly as practicable
after the expiration of the Exchange Offer.
 
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
 
    Notwithstanding any other provision of the Exchange Offer, or any extension
of the Exchange Offer, the Company shall not be required to accept for exchange,
or to issue Exchange Notes in exchange for, any Old Notes and may terminate or
amend the Exchange Offer (by oral or written notice to the Exchange Agent or by
a timely press release) if at any time before the acceptance of such Old Notes
for exchange or the exchange of the Exchange Notes for such Old Notes, any of
the following conditions exist:
 
        (a) any action or proceeding is instituted or threatened in any court or
    by or before any governmental agency or regulatory authority or any
    injunction, order or decree is issued with respect to the Exchange Offer
    which, in the sole judgment of the Company, might materially impair the
    ability of the Company to proceed with the Exchange Offer or have a material
    adverse effect on the contemplated benefits of the Exchange Offer to the
    Company; or
 
        (b) any change (or any development involving a prospective change) shall
    have occurred or be threatened in the business, properties, assets,
    liabilities, financial condition, operations, results of operations or
    prospects of the Company that is or may be adverse to the Company, or the
    Company shall have become aware of facts that have or may have adverse
    significance with respect to the value of the Old Notes or the Exchange
    Notes or that may materially impair the contemplated benefits of the
    Exchange Offer to the Company; or
 
                                       95
<PAGE>
        (c) any law, rule or regulation or applicable interpretations of the
    Staff of the Commission is issued or promulgated which, in the good faith
    determination of the Company, do not permit the Company to effect the
    Exchange Offer; or
 
        (d) any governmental approval has not been obtained, which approval the
    Company, in its sole discretion, deems necessary for the consummation of the
    Exchange Offer; or
 
        (e) there shall have been proposed, adopted or enacted any law, statute,
    rule or regulation (or an amendment to any existing law statute, rule or
    regulation) which, in the sole judgment of the Company, might materially
    impair the ability of the Company to proceed with the Exchange Offer or have
    a material adverse effect on the contemplated benefits of the Exchange Offer
    to the Company; or
 
        (f) there shall occur a change in the current interpretation by the
    staff of the Commission which permits the Exchange Notes issued pursuant to
    the Exchange Offer in exchange for Old Notes to be offered for resale,
    resold and otherwise transferred by holders thereof (other than any such
    holder that is an "affiliate" of the Company within the meaning of Rule 405
    under the Securities Act) without compliance with the registration and
    prospectus delivery provisions of the Securities Act provided that such
    Exchange Notes are acquired in the ordinary course of such holders' business
    and such holders have no arrangement with any person to participate in the
    distribution of such Exchange Notes; or
 
        (g) there shall have occurred (i) any general suspension of, shortening
    of hours for, or limitation on prices for, trading in securities on any
    national securities exchange or in the over-the-counter market (whether or
    not mandatory), (ii) any limitation by any govermental agency or authority
    which may adversely affect the ability of the Company to complete the
    transactions contemplated by the Exchange Offer, (iii) a declaration of a
    banking moratorium or any suspension of payments in respect of banks by
    Federal or state authorities in the United States (whether or not
    mandatory), (iv) a commencement of a war, armed hostilities or other
    international or national crisis directly or indirectly involving the United
    States, (v) any limitation (whether or not mandatory) by any governmental
    authority on, or other event having a reasonable likelihood of affecting,
    the extension of credit by banks or other leading institutions in the United
    States, or (vi) in the case of any of the foregoing existing at the time of
    the commencement of the Exchange Offer, a material acceleration or worsening
    thereof.
 
    The Company expressly reserves the right to terminate the Exchange Offer and
not accept for exchange any Old Notes upon the occurrence of any of the
foregoing conditions (which represent all of the material conditions to the
acceptance by the Company of properly tendered Old Notes). In addition, the
Company may amend the Exchange Offer at any time prior to the Expiration Date if
any of the conditions set forth above occur. Moreover, regardless of whether any
of such conditions has occurred, the Company may amend the Exchange Offer in any
manner which, in its good faith judgment, is advantageous to holders of the Old
Notes.
 
    The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances giving rise to any such
condition or may be waived by the Company in whole or in part at any time and
from time to time in its sole discretion. The failure by the Company at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time. If the Company waives or amends the foregoing
conditions, it will, if required by law, extend the Exchange Offer for a minimum
of five business days from the date that the Company first gives notice, by
public announcement or otherwise, of such waiver or amendment, if the Exchange
Offer would otherwise expire within such five business-day period. Any
determination by the Company concerning the events described above will be final
and binding upon all parties.
 
                                       96
<PAGE>
    In addition, the Company will not accept for exchange any Old Notes
tendered, and no Exchange Notes will be issued in exchange for any such Old
Notes, if at such time any stop order shall be threatened or in effect with
respect to the Registration Statement of which this Prospectus constitutes a
part or the qualification of the Indenture under the Trust Indenture Act of
1939, as amended. In any such event the Company is required to use every
reasonable effort to obtain the withdrawal of any stop order at the earliest
possible time.
 
    The Exchange Offer is not conditioned upon any minimum principal amount of
Old Notes being tendered for exchange.
 
EXCHANGE AGENT
 
    The Bank of New York has been appointed as the Exchange Agent for the
Exchange Offer. All executed Letters of Transmittal should be directed to the
Exchange Agent at one of the addresses set forth below:
 
<TABLE>
<S>                                            <C>
         BY HAND/OVERNIGHT COURIER:                              BY MAIL:
            The Bank of New York                           The Bank of New York
             101 Barclay Street                           101 Barclay Street, 7E
       Corporate Trust Services Window                   New York, New York 10286
                Ground Level                    Attention: Vincent Jhingoor, Reorganization
 Attention: Vincent Jhingoor, Reorganization                      Section
                   Section
 
                                       BY FACSIMILE:
                                       (212) 815-6339
</TABLE>
 
Questions and requests for assistance, requests for additional copies of this
Prospectus or of the Letter of Transmittal and requests for Notices of
Guaranteed Delivery should be directed to the Exchange Agent at the address and
telephone number set forth in the Letter of Transmittal.
 
    DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ON THE LETTER OF TRANSMITTAL,
OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE OR TELEX NUMBER OTHER THAN THE
ONES SET FORTH ON THE LETTER OF TRANSMITTAL, WILL NOT CONSTITUTE A VALID
DELIVERY.
 
SOLICITATION OF TENDERS; FEES AND EXPENSES
 
    The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or others
soliciting acceptances of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
it for its reasonable out-of-pocket expenses in connection therewith. The
Company will also pay brokerage houses and other custodians, nominees and
fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding
copies of this and other related documents to the beneficial owners of the Old
Notes and in handling or forwarding tenders for their customers.
 
    The estimated cash expenses to be incurred in connection with the Exchange
Offer will be paid by the Company and are estimated in the aggregate to be
approximately $500,000, which includes fees and expenses of the Exchange Agent,
Trustee, registration fees, accounting, legal, printing and related fees and
expenses.
 
    No person has been authorized to give any information or to make any
representations in connection with the Exchange Offer other than those contained
in this Prospectus. If given or made, such information or representations should
not be relied upon as having been authorized by the Company.
 
                                       97
<PAGE>
Neither the delivery of this Prospectus nor any exchange made hereunder shall,
under any circumstances, create any implication that there has been no change in
the affairs of the Company since the respective dates as of which information is
given herein. The Exchange Offer is not being made to (nor will tenders be
accepted from or on behalf of) holders of Old Notes in any jurisdiction in which
the making of the Exchange Offer or the acceptance thereof would not be in
compliance with the laws of such jurisdiction. However, the Company may, at its
discretion, take such action as it may deem necessary to make the Exchange Offer
in any such jurisdiction and extend the Exchange Offer to holders of Old Notes
in such jurisdiction. In any jurisdiction in which the securities laws or blue
sky laws of which require the Exchange Offer to be made by a licensed broker or
dealer, the Exchange Offer is being made on behalf of the Company by one or more
registered brokers or dealers which are licensed under the laws of such
jurisdication.
 
TRANSFER TAXES
 
    The Company will pay all transfer taxes, if any, applicable to the exchange
of Old Notes pursuant to the Exchange Offer. If, however, certificates
representing Exchange Notes or Old Notes for principal amounts not tendered or
accepted for exchange are to be delivered to, or are to be issued in the name
of, any person other than the registered holder of the Old Notes tendered, or if
tendered Old Notes are registered in the name of any person other than the
person signing the Letter of Transmittal, or if a transfer tax is imposed for
any reason other than the exchange of Old Notes pursuant to the Exchange Offer,
then the amount of any such transfer taxes (whether imposed on the registered
holder or any other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
 
ACCOUNTING TREATMENT
 
    The Exchange Notes will be recorded at the carrying value of the Old Notes
as reflected in the Company's accounting records on the date of the exchange.
Accordingly, no gain or loss for accounting purposes will be recognized by the
Company upon the exchange of Exchange Notes for Old Notes. Expenses incurred in
connection with the issuance of the Exchange Notes will be amortized over the
term of the Exchange Notes.
 
CONSEQUENCES OF FAILURE TO EXCHANGE
 
    Holders of Old Notes who do not exchange their Old Notes for Exchange Notes
pursuant to the Exchange Offer will continue to be subject to the restrictions
on transfer of such Old Notes as set forth in the legend thereon. Old Notes not
exchanged pursuant to the Exchange Offer will continue to remain outstanding in
accordance with their terms. In general, the Old Notes may not be offered or
sold unless registered under the Securities Act, except pursuant to an exemption
from, or in a transaction not subject to, the Securities Act and applicable
state securities laws. The Company does not currently anticipate that it will
register the Old Notes under the Securities Act.
 
    Participation in the Exchange Offer is voluntary, and holders of Old Notes
should carefully consider whether to participate. Holders of Old Notes are urged
to consult their financial and tax advisors in making their own decision on what
action to take.
 
    As a result of the making of, and upon acceptance for exchange of all
validly tendered Old Notes pursuant to the terms of, this Exchange Offer, the
Company will have fulfilled a covenant contained in the Registration Rights
Agreement. Holders of Old Notes who do not tender their Old Notes in the
Exchange Offer will continue to hold such Old Notes and will be entitled to all
the rights and limitations applicable thereto under the Indenture, except for
any such rights under the Registration Rights Agreement that by their terms
terminate or cease to have further effectiveness as a result of the making of
this Exchange
 
                                       98
<PAGE>
Offer. All untendered Old Notes will continue to be subject to the restrictions
on transfer set forth in the Indenture. To the extent that Old Notes are
tendered and accepted in the Exchange Offer, the trading market for untendered
Old Notes could be adversely affected.
 
    The Company may in the future seek to acquire, subject to the terms of the
Indenture, untendered Old Notes in open market or privately negotiated
transactions, through subsequent exchange offers or otherwise. The Company has
no present plan to acquire any Old Notes which are not tendered in the Exchange
Offer.
 
RESALE OF EXCHANGE NOTES
 
    The Company is making the Exchange Offer in reliance on the position of the
staff of the Commission as set forth in certain interpretive letters addressed
to third parties in other transactions. However, the Company has not sought its
own interpretive letter and there can be no assurance that the Staff would make
a similar determination with respect to the Exchange Offer as it has in such
interpretive letters to third parties. Based on these interpretations by the
staff, the Company believes that the Exchange Notes issued pursuant to the
Exchange Offer in exchange for Old Notes may be offered for resale, resold and
otherwise transferred by a Holder (other than any Holder who is a broker-dealer
or an "affiliate" of the Company within the meaning of Rule 405 of the
Securities Act) without further compliance with the registration and prospectus
delivery requirements of the Securities Act, provided that such Exchange Notes
are acquired in the ordinary course of such Holder's business and that such
Holder is not participating, and has no arrangement or understanding with any
person to participate, in a distribution (within the meaning of the Securities
Act) of such Exchange Notes. However, any Holder who is an "affiliate" of the
Company or who has an arrangement or understanding with respect to the
distribution of the Exchange Notes to be acquired pursuant to the Exchange
Offer, or any broker-dealer who purchased Old Notes from the Company to resell
pursuant to Rule 144A or any other available exemption under the Securities Act
(i) could not rely on the applicable interpretations of the staff and (ii) must
comply with the registration and prospectus delivery requirements of the
Securities Act. A broker-dealer who holds Old Notes that were acquired for its
own account as a result of market-making or other trading activities may be
deemed to be an "underwriter" within the meaning of the Securities Act and must,
therefore, deliver a prospectus meeting the requirements of the Securities Act
in connection with any resale of Exchange Notes. Each such broker-dealer that
receives Exchange Notes for its own account in exchange for Old Notes, where
such Old Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge in the Letter of
Transmittal that it will deliver a prospectus in connection with any resale of
such Exchange Notes. See "Plan of Distribution."
 
    In addition, to comply with the securities laws of certain jurisdictions, if
applicable, the Exchange Notes may not be offered or sold unless they have been
registered or qualified for sale in such jurisdiction or an exemption from
registration or qualification is available and is complied with. The Company has
agreed, pursuant to the Registration Rights Agreement and subject to certain
specified limitations therein, to register or qualify the Exchange Notes for
offer or sale under the securities or blue sky laws of such jurisdictions as any
holder of the Exchange Notes reasonably requests. Such registration or
qualification may require the imposition of restrictions or conditions
(including suitability requirements for offerees or purchasers) in connection
with the offer or sale of any Exchange Notes.
 
                                       99
<PAGE>
                       DESCRIPTION OF THE EXCHANGE NOTES
 
GENERAL
 
    The Old Notes were issued and the Exchange Notes offered hereby will be
issued under the Indenture. The terms of the Exchange Notes include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). The Exchange
Notes are subject to all such terms, and holders of the Exchange Notes are
referred to the Indenture and the Trust Indenture Act for a statement thereof.
The following summary of the material provisions of the Indenture describes the
material terms of the Indenture but is subject to, and qualified in its entirety
by reference to, the provisions of the Indenture, including the definitions of
certain terms contained therein and those terms made part of the Indenture by
reference to the Trust Indenture Act. For definitions of certain capitalized
terms used in the following summary, see "--Certain Definitions." The Indenture
is an exhibit to the Registration Statement of which this Prospectus is a part.
 
    On April 30, 1998, the Company issued $200.0 million aggregate principal
amount of Old Notes under the Indenture. The terms of the Exchange Notes are
identical in all material respects to the Old Notes, except for certain transfer
restrictions and registration and other rights relating to the exchange of the
Old Notes for Exchange Notes. The Trustee will authenticate and deliver Exchange
Notes for original issue only in exchange for a like principal amount of Old
Notes. Any Old Notes that remain outstanding after the consummation of the
Exchange Offer, together with the Exchange Notes, will be treated as a single
class of securities under the Indenture. Accordingly, all references herein to
specified percentages in aggregate principal amount of the outstanding Exchange
Notes shall be deemed to mean, at any time after the Exchange Offer is
consummated, such percentage in aggregate principal amount of the Old Notes and
Exchange Notes then outstanding.
 
    The Notes will be general unsecured obligations of the Company and will be
subordinated in right of payment to all existing and future Senior Indebtedness
of the Company. As of March 31, 1998, on a pro forma basis giving effect to
Transactions, the aggregate amount of the Company's outstanding Senior
Indebtedness would have been approximately $271.6 million, all of which would
have been secured Indebtedness and the Company would have had no Senior
Subordinated Indebtedness outstanding other than the Notes. The Indenture will
permit the incurrence of additional Senior Indebtedness in the future. See "Risk
Factors--Substantial Leverage and Debt Service."
 
    The Company is in the process of contributing substantially all of its
assets to its Subsidiaries and will operate as a holding company conducting
substantially all of its operations through its Subsidiaries. Consequently, the
Notes will be effectively subordinated to the obligations of the Company's
Subsidiaries, including the guarantee by its Subsidiaries of obligations under
the Senior Credit Facilities. The Notes are not guaranteed by any of the
Company's Subsidiaries. In the event of an insolvency, liquidation or other
reorganization of any of the Subsidiaries of the Company, the creditors of the
Company (including the holders of the Notes), as well as stockholders of the
Company, will have no right to proceed against the assets of such Subsidiaries
or to cause the liquidation or bankruptcy of such Subsidiaries under Federal
bankruptcy laws. Creditors of such Subsidiaries, including lenders under the
Senior Credit Facilities, would be entitled to payment in full from such assets
before the Company would be entitled to receive any distribution therefrom.
Except to the extent that the Company may itself be a creditor with recognized
claims against such Subsidiaries, claims of creditors of such Subsidiaries will
have priority with respect to the assets and earnings of such Subsidiaries over
the claims of creditors of the Company, including claims under the Notes. In
addition, as a result of the Company becoming a holding company, the Company's
operating cash flow and its ability to service its indebtedness, including the
Notes, will be dependent upon the operating cash flow of its Subsidiaries and
the payment of funds by such Subsidiaries to the Company in the form of loans,
dividends or otherwise. As of March 31, 1998, after giving pro forma effect to
the Transactions, the Subsidiaries of the Company would have had total
liabilities of $117.4 million (excluding guarantees in respect of the Senior
Credit Facilities).
 
                                      100
<PAGE>
    As of the Issuance Date, all of the Company's Subsidiaries will be
Restricted Subsidiaries. However, under certain circumstances, the Company will
be able to designate current or future Subsidiaries as Unrestricted
Subsidiaries. Unrestricted Subsidiaries will not be subject to any of the
restrictive covenants set forth in the Indenture.
 
SUBORDINATION
 
    The payment of the Subordinated Note Obligations will be subordinated in
right of payment, as set forth in the Indenture, to the prior payment in full in
cash or cash equivalents of all Senior Indebtedness, whether outstanding on the
date of the Indenture or thereafter incurred. Upon any distribution to creditors
of the Company in a liquidation or dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property, an assignment for the benefit of
creditors or any marshalling of the Company's assets and liabilities, the
holders of Senior Indebtedness will be entitled to receive payment in full in
cash or cash equivalents of such Senior Indebtedness and all outstanding Letter
of Credit Obligations will be fully cash collateralized before the Holders will
be entitled to receive any payment with respect to the Subordinated Note
Obligations, and until all Senior Indebtedness is paid in full in cash
equivalents, any distribution to which the Holders would be entitled shall be
made to the holders of Senior Indebtedness (except that Holders may receive (i)
shares of stock and any debt securities that are subordinated at least to the
same extent as the Notes to (a) Senior Indebtedness and (b) any securities
issued in exchange for Senior Indebtedness and (ii) payments made from the
trusts described under "--Legal Defeasance and Covenant Defeasance").
 
    The Company also may not make any payment upon or in respect of the
Subordinated Note Obligations (except in such subordinated securities or from
the trust described under "--Legal Defeasance and Covenant Defeasance") if (i) a
default in the payment of the principal of, premium, if any, or interest on, or
of unreimbursed amounts under drawn letters of credit or in respect of bankers'
acceptances or fees relating to letters of credit or bankers' acceptances
constituting, Designated Senior Indebtedness occurs and is continuing beyond any
applicable period of grace (a "PAYMENT DEFAULT") or (ii) any other default
occurs and is continuing with respect to Designated Senior Indebtedness that
permits holders of the Designated Senior Indebtedness as to which such default
relates to accelerate its maturity without further notice (except such notice as
may be required to effect such acceleration) or the expiration of any applicable
grace periods (a "NON-PAYMENT DEFAULT") and the Trustee receives a notice of
such default (a "PAYMENT BLOCKAGE NOTICE") from a representative of holders of
such Designated Senior Indebtedness. Payments on the Notes, including any missed
payments, may and shall be resumed (a) in the case of a payment default, upon
the date on which such default is cured or waived or shall have ceased to exist
or such Designated Senior Indebtedness shall have been discharged or paid in
full in cash or cash equivalents and all outstanding Letter of Credit
Obligations shall have been fully cash collateralized and (b) in case of a
nonpayment default, the earlier of (x) the date on which such nonpayment default
is cured or waived, (y) 179 days after the date on which the applicable Payment
Blockage Notice is received (each such period, the "PAYMENT BLOCKAGE PERIOD") or
(z) the date such Payment Blockage Period shall be terminated by written notice
to the Trustee from the requisite holders of such Designated Senior Indebtedness
necessary to terminate such period or from their representative. No new Payment
Blockage Period may be commenced unless and until 365 days have elapsed since
the effectiveness of the immediately preceding Payment Blockage Notice. However,
if any Payment Blockage Notice within such 365-day period is given by or on
behalf of any holders of Designated Senior Indebtedness (other than the agent
under the Senior Credit Facilities), the agent under the Senior Credit
Facilities may give another Payment Blockage Notice within such period. In no
event, however, may the total number of days during which any Payment Blockage
Period or Periods is in effect exceed 179 days in the aggregate during any 365
consecutive day period. No nonpayment default that existed or was continuing on
the date of delivery of any Payment Blockage Notice to the Trustee shall be, or
be made, the basis for a subsequent Payment Blockage Notice unless such default
shall have been cured or waived for a period of not less than 90 days.
 
                                      101
<PAGE>
    If the Company fails to make any payment on the Notes when due or within any
applicable grace period, whether or not on account of the payment blockage
provision referred to above, such failure would constitute an Event of Default
under the Indenture and would enable the Holders to accelerate the maturity
thereof.
 
    The Indenture further requires that the Company promptly notify holders of
Senior Indebtedness if payment of the Notes is accelerated because of an Event
of Default.
 
    As a result of the subordination provisions described above, in the event of
insolvency, bankruptcy, administration, reorganization, receivership or similar
proceedings relating to the Company, Holders may recover less ratably than
creditors of the Company who are holders of Senior Indebtedness. In addition,
the Notes will be structurally subordinated to the liabilities of Subsidiaries
of the Company. At March 31, 1998, on a pro forma basis after giving effect to
the Transactions, the aggregate amount of the Company's outstanding Senior
Indebtedness would have been approximately $271.6 million, all of which would
have been secured Indebtedness, the Company would have had no Senior
Subordinated Indebtedness outstanding other than the Old Notes and the Company's
subsidiaries would have had total liabilities of $117.4 million, excluding
guarantees in respect of the Senior Credit Facilities. The Indenture permits the
Company to incur additional indebtedness, including up to $278.4 million of
additional Senior Indebtedness under the Senior Credit Facilities, subject to
certain limitations. Although the Indenture contains limitations on the amount
of additional Indebtedness that the Company and its Subsidiaries may incur,
under certain circumstances the amount of such Indebtedness could be substantial
and, in any case, such Indebtedness may be Senior Indebtedness. See "--Certain
Covenants-- Limitations on Incurrence of Indebtedness and Issuance of
Disqualified Stock."
 
    "DESIGNATED SENIOR INDEBTEDNESS" means (i) Senior Indebtedness under the
Senior Credit Facilities and (ii) any other Senior Indebtedness permitted under
the Indenture the principal amount of which is $25.0 million or more and that
has been designated by the Company as Designated Senior Indebtedness.
 
    "SENIOR INDEBTEDNESS" means (i) the Obligations under the Senior Credit
Facilities and (ii) any other Indebtedness permitted to be incurred by the
Company under the terms of the Indenture, unless the instrument under which such
Indebtedness is incurred expressly provides that it is on a parity with or
subordinated in right of payment to the Notes, including, with respect to
clauses (i) and (ii), interest accruing subsequent to the filing of, or which
would have accrued but for the filing of, a petition for bankruptcy, in
accordance with and at the rate (including any rate applicable upon any default
or event of default, to the extent lawful) specified in the documents evidencing
or governing such Senior Indebtedness, whether or not such interest is an
allowable claim in such bankruptcy proceeding. Notwithstanding anything to the
contrary in the foregoing, Senior Indebtedness will not include (1) any
liability for federal, state, local or other taxes owed or owing by the Company,
(2) any obligation of the Company to any of its Subsidiaries, (3) any accounts
payable or trade liabilities arising in the ordinary course of business
(including guarantees thereof or instruments evidencing such liabilities) other
than obligations in respect of letters of credit under the Senior Credit
Facilities, (4) any Indebtedness that is incurred in violation of the Indenture,
(5) Indebtedness which, when incurred and without respect to any election under
Section 1111(b) of Title 11, United States Code, is without recourse to the
Company, (6) any Indebtedness, guarantee or obligation of the Company which is
subordinate or junior to any other Indebtedness, guarantee or obligation of the
Company, (7) Indebtedness evidenced by the Notes and (8) Capital Stock of the
Company.
 
    "SUBORDINATED NOTE OBLIGATIONS" means any principal of, premium, if any, and
interest on the Notes payable pursuant to the terms of the Notes or upon
acceleration, together with and including any amounts received upon the exercise
of rights of rescission or other rights of action (including claims for damages)
or otherwise, to the extent relating to the purchase price of the Notes or
amounts corresponding to such principal, premium, if any, or interest on the
Notes.
 
                                      102
<PAGE>
    The Notes will rank senior in right of payment to all Subordinated
Indebtedness of the Company. At the Issuance Date the Company will have no
Subordinated Indebtedness.
 
PRINCIPAL, MATURITY AND INTEREST
 
    The Notes will mature on May 1, 2008. Interest on the Notes will accrue at
the rate of 9 5/8% per annum and will be payable semi-annually in arrears on May
1 and November 1, commencing on November 1, 1998, to Holders of record on the
immediately preceding April 15 and October 15. Interest on the Notes will accrue
from the most recent date to which interest has been paid or, if no interest has
been paid, from the Issuance Date. Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months. Principal of, premium, if any,
and interest on the Notes will be payable at the office or agency of the Company
maintained for such purpose within the City and State of New York or, at the
option of the Company, payment of interest may be made by check mailed to the
Holders at their respective addresses set forth in the register of Holders;
PROVIDED that all payments of principal, premium, if any, and interest with
respect to Notes represented by one or more permanent global Notes registered in
the name of or held by The Depository Trust Company or its nominee will be made
by wire transfer of immediately available funds to the accounts specified by the
Holder or Holders thereof. Until otherwise designated by the Company, the
Company's office or agency in New York will be the office of the Trustee
maintained for such purpose. The Notes will be issued in denominations of $1,000
and integral multiples thereof.
 
MANDATORY REDEMPTION
 
    Except as set forth below under "--Repurchase at the Option of Holders," the
Company is not required to make mandatory redemption or sinking fund payments
with respect to the Notes.
 
OPTIONAL REDEMPTION
 
    Except as described below, the Notes will not be redeemable at the Company's
option prior to May 1, 2003. From and after May 1, 2003, the Notes will be
subject to redemption at any time at the option of the Company, in whole or in
part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below, plus
accrued and unpaid interest thereon, if any, to the applicable redemption date
(subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the twelve-month period beginning on May 1 of each of the years indicated below:
 
<TABLE>
<CAPTION>
YEAR                                                                         REDEMPTION PRICE
- --------------------------------------------------------------------------  ------------------
<S>                                                                         <C>
2003......................................................................         104.813%
2004......................................................................         103.208%
2005......................................................................         101.604%
2006 and thereafter.......................................................         100.000%
</TABLE>
 
    In addition, at any time or from time to time, on or prior to May 1, 2001,
the Company may, at its option, redeem up to 35% of the aggregate principal
amount of Notes originally issued under the Indenture on the Issuance Date at a
redemption price equal to 109.625% of the aggregate principal amount thereof,
plus accrued and unpaid interest thereon, if any, to the redemption date
(subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date), with the net
proceeds of one or more Equity Offerings; PROVIDED that at least 65% of the
aggregate principal amount of Notes originally issued under the Indenture on the
Issuance Date remains outstanding immediately after the occurrence of each such
redemption; PROVIDED FURTHER that each such redemption occurs within 90 days of
the date of closing of each such Equity Offering. The Trustee shall select the
Notes to be purchased in the manner described under "Repurchase at the Option of
Holders--Selection and Notice."
 
                                      103
<PAGE>
    At any time on or prior to May 1, 2003, the Notes may also be redeemed as a
whole at the option of the Company upon the occurrence of a Change of Control,
upon not less than 30 nor more than 60 days prior notice (but in no event more
than 90 days after the occurrence of such Change of Control or transfer event)
mailed by first-class mail to each Holder's registered address, at a redemption
price equal to 100% of the principal amount thereof plus the Applicable Premium
as of, and accrued and unpaid interest, if any, to, the date of redemption (the
"Redemption Date") (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date).
 
    "APPLICABLE PREMIUM" means, with respect to a Note at any Redemption Date,
the greater of (i) 1.0% of the principal amount of such Note and (ii) the excess
of (A) the present value at such time of (1) the redemption price of such Note
at May 1, 2003 (such redemption price being described under "--Optional
Redemption") plus (2) all required interest payments due on such Note through
May 1, 2003, computed using a discount rate equal to the Treasury Rate plus 50
basis points, over (B) the principal amount of such Note.
 
    "TREASURY RATE" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15 (519)
which has become publicly available at least two business days prior to the
Redemption Date (or, if such Statistical Release is no longer published, any
publicly available source of similar market data)) most nearly equal to the
period from the Redemption Date to May 1, 2003; PROVIDED, HOWEVER, that if the
period from the Redemption Date to May 1, 2003 is not equal to the constant
maturity of a United States Treasury security for which a weekly average yield
is given, the Treasury Rate shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of a year) from the weekly average yields
of United States Treasury securities for which such yields are given, except
that if the period from the Redemption Date to May 1, 2003 is less than one
year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be used.
 
REPURCHASE AT THE OPTION OF HOLDERS
 
    CHANGE OF CONTROL.  The Indenture provides that, upon the occurrence of a
Change of Control, unless the Company has elected to redeem the Notes in
connection with such Change of Control, the Company will make an offer to
purchase all of the Notes pursuant to the offer described below (the "CHANGE OF
CONTROL OFFER") at a price in cash (the "CHANGE OF CONTROL PAYMENT") equal to
101% of the aggregate principal amount thereof plus accrued and unpaid interest,
if any, to the date of purchase (subject to the right of holders of record on
the relevant record date to receive interest due on the relevant interest
payment date). The Indenture provides that within 30 days following any Change
of Control, the Company will mail a notice to each Holder, with a copy to the
Trustee, with the following information: (1) a Change of Control Offer is being
made pursuant to the covenant entitled "Change of Control," and that all Notes
properly tendered pursuant to such Change of Control Offer will be accepted for
payment; (2) the purchase price and the purchase date, which will be no earlier
than 30 days nor later than 60 days from the date such notice is mailed, except
as may be otherwise required by applicable law (the "CHANGE OF CONTROL PAYMENT
DATE"); (3) any Note not properly tendered will remain outstanding and continue
to accrue interest; (4) unless the Company defaults in the payment of the Change
of Control Payment, all Notes accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest on the Change of Control Payment
Date; (5) Holders electing to have any Notes purchased pursuant to a Change of
Control Offer will be required to surrender the Notes, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Notes completed, to
the paying agent specified in the notice at the address specified in the notice
prior to the close of business on the third Business Day preceding the Change of
Control Payment Date; (6) Holders will be entitled to withdraw their tendered
Notes and their election to require the Company to purchase such Notes, provided
that
 
                                      104
<PAGE>
the paying agent receives, not later than the close of business on the last day
of the Offer Period (as defined in the Indenture), a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Notes tendered for purchase, and a statement that such Holder is
withdrawing his tendered Notes and his election to have such Notes purchased;
and (7) that Holders whose Notes are being purchased only in part will be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered, which unpurchased portion must be equal to $1,000 in principal
amount or an integral multiple thereof.
 
    The Indenture provides that, prior to complying with the provisions of this
covenant, but in any event within 30 days following a Change of Control, the
Company will either repay all outstanding Senior Indebtedness or obtain the
requisite consents, if any, under any outstanding Senior Indebtedness in each
case necessary to permit the repurchase of the Notes required by this covenant.
 
    The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws or regulations are applicable in connection with the repurchase
of the Notes pursuant to a Change of Control Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
the Indenture, the Company will comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations described
in the Indenture by virtue thereof.
 
    The Indenture provides that on the Change of Control Payment Date, the
Company will, to the extent permitted by law, (1) accept for payment all Notes
or portions thereof properly tendered pursuant to the Change of Control Offer,
(2) deposit with the paying agent an amount equal to the aggregate Change of
Control Payment in respect of all Notes or portions thereof so tendered and (3)
deliver, or cause to be delivered, to the Trustee for cancellation the Notes so
accepted together with an Officers' Certificate stating that such Notes or
portions thereof have been tendered to and purchased by the Company. The
Indenture will provide that the paying agent will promptly mail to each Holder
the Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any, PROVIDED, that each such
new Note will be in a principal amount of $1,000 or an integral multiple
thereof. The Company will publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment Date.
 
    The Senior Credit Facilities will, and future credit agreements or other
agreements relating to Senior Indebtedness to which the Company becomes a party
may, prohibit the Company from purchasing any Notes as a result of a Change of
Control and/or provide that certain change of control events with respect to the
Company would constitute a default thereunder. In the event a Change of Control
occurs at a time when the Company is prohibited from purchasing the Notes, the
Company could seek the consent of its lenders to the purchase of the Notes or
could attempt to refinance the borrowings that contain such prohibition. If the
Company does not obtain such a consent or repay such borrowings, the Company
will remain prohibited from purchasing the Notes. In such case, the Company's
failure to purchase tendered Notes would constitute an Event of Default under
the Indenture. If, as a result thereof, a default occurs with respect to any
Senior Indebtedness, the subordination provisions in the Indenture would likely
restrict payments to the Holders.
 
    The existence of a Holder's right to require the Company to repurchase such
Holder's Notes upon the occurrence of a Change of Control may deter a third
party from seeking to acquire the Company in a transaction that would constitute
a Change of Control.
 
    ASSET SALES.  The Indenture provides that the Company will not, and will not
permit any of its Restricted Subsidiaries to, cause, make or suffer to exist an
Asset Sale, unless (x) the Company, or such Restricted Subsidiary, as the case
may be, receives consideration at the time of such Asset Sale at least equal to
the fair market value (as determined in good faith by the Company) of the assets
sold or otherwise disposed of and (y) at least 75% of the consideration therefor
received by the Company, or
 
                                      105
<PAGE>
such Restricted Subsidiary, as the case may be, is in the form of cash or Cash
Equivalents; PROVIDED that the amount of (a) any liabilities (as shown on the
Company's or such Restricted Subsidiary's most recent balance sheet or in the
notes thereto) of the Company or any Restricted Subsidiary (other than
liabilities that are by their terms subordinated to the Notes), that are assumed
by the transferee of any such assets, (b) any securities received by the Company
or such Restricted Subsidiary from such transferee that are converted by the
Company or such Restricted Subsidiary into cash (to the extent of the cash
received) within 180 days following the closing of such Asset Sale and (c) any
Designated Noncash Consideration received by the Company or any of its
Restricted Subsidiaries in such Asset Sale having an aggregate fair market
value, taken together with all other Designated Noncash Consideration received
pursuant to this clause (c) that is at that time outstanding, not to exceed the
greater of (x) $50.0 million or (y) 15% of Total Assets at the time of the
receipt of such Designated Noncash Consideration (with the fair market value of
each item of Designated Noncash Consideration being measured at the time
received and without giving effect to subsequent changes in value), shall be
deemed to be cash for purposes of this provision and for no other purpose.
 
    Within 365 days after the Company's or any Restricted Subsidiary's receipt
of the Net Proceeds of any Asset Sale, the Company or such Restricted
Subsidiary, at its option, may (i) apply the Net Proceeds from such Asset Sale
to permanently reduce (x) Obligations under the Senior Credit Facilities (and to
correspondingly reduce commitments with respect thereto), (y) other Senior
Indebtedness or Senior Subordinated Indebtedness (and to correspondingly reduce
commitments with respect thereto) (PROVIDED that if the Company shall so reduce
Obligations under Senior Subordinated Indebtedness, it will equally and ratably
reduce Obligations under the Notes if the Notes are then prepayable or, if the
Notes may not then be prepaid, the Company shall make an offer (in accordance
with the procedures set forth below for an Asset Sale Offer) to all Holders to
purchase at 100% of the principal amount thereof, plus the amount of accrued but
unpaid interest, if any, on the amount of Notes that would otherwise be prepaid)
or (z) Indebtedness of a Wholly Owned Restricted Subsidiary (other than
Indebtedness owed to the Company or another Restricted Subsidiary), (ii) apply
the Net Proceeds from such Asset Sale to an investment in any one or more
businesses, capital expenditures or acquisitions of other assets in each case,
used or useful in a Similar Business and/or (iii) apply the Net Proceeds from
such Asset Sale to an investment in properties or assets that replace the
properties and assets that are the subject of such Asset Sale. The Indenture
will provide that any Net Proceeds from the Asset Sale that are not invested or
applied as provided and within the time period set forth in the first sentence
of this paragraph will be deemed to constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $15.0 million, the Company shall
make an offer to all Holders (an "Asset Sale Offer") to purchase the maximum
principal amount of Notes, that is an integral multiple of $1,000, that may be
purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to 100% of the principal amount thereof, plus accrued and unpaid interest,
if any, to the date fixed for the closing of such offer, in accordance with the
procedures set forth in the Indenture. The Company will commence an Asset Sale
Offer with respect to Excess Proceeds within ten Business Days after the date
that Excess Proceeds exceeds $15.0 million by mailing the notice required
pursuant to the terms of the Indenture, with a copy to the Trustee. To the
extent that the aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company may use any remaining Excess
Proceeds for general corporate purposes. If the aggregate principal amount of
Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased in the manner described under the
caption "Selection and Notice" below. Upon completion of any such Asset Sale
Offer, the amount of Excess Proceeds shall be reset at zero.
 
    The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws or regulations are applicable in connection with the repurchase
of the Notes pursuant to an Asset Sale Offer. To the extent that the
 
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provisions of any securities laws or regulations conflict with the provisions of
the Indenture, the Company will comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations described
in the Indenture by virtue thereof.
 
    The Senior Credit Facilities will, and future credit agreements or other
agreements relating to Senior Indebtedness to which the Company becomes a party
may, prohibit the Company from purchasing any Notes pursuant to this Asset Sales
covenant. In the event the Company is prohibited from purchasing the Notes, the
Company could seek the consent of its lenders to the purchase of the Notes or
could attempt to refinance the borrowings that contain such prohibition. If the
Company does not obtain such a consent or repay such borrowings, the Company
will remain prohibited from purchasing the Notes. In such case, the Company's
failure to purchase tendered Notes would constitute an Event of Default under
the Indenture. If, as a result thereof, a default occurs with respect to any
Senior Indebtedness, the subordination provisions in the Indenture would likely
restrict payments to the Holders.
 
    SELECTION AND NOTICE.  If less than all of the Notes are to be redeemed at
any time or if more Notes are tendered pursuant to an Asset Sale Offer than the
Company is required to purchase, selection of such Notes for redemption or
purchase, as the case may be, will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which
such Notes are listed, or, if such Notes are not so listed, on a pro rata basis,
by lot or by such other method as the Trustee shall deem fair and appropriate
(and in such manner as complies with applicable legal requirements); provided
that no Notes of $1,000 or less shall be purchased or redeemed in part.
 
    Notices of purchase or redemption shall be mailed by first class mail,
postage prepaid, at least 30 but not more than 60 days before the purchase or
redemption date to each Holder of Notes to be purchased or redeemed at such
Holder's registered address. If any Note is to be purchased or redeemed in part
only, any notice of purchase or redemption that relates to such Note shall state
the portion of the principal amount thereof that has been or is to be purchased
or redeemed.
 
    A new Note in principal amount equal to the unpurchased or unredeemed
portion of any Note purchased or redeemed in part will be issued in the name of
the Holder thereof upon cancellation of the original Note. On and after the
purchase or redemption date unless the Company defaults in payment of the
purchase or redemption price, interest shall cease to accrue on Notes or
portions thereof purchased or called for redemption.
 
CERTAIN COVENANTS
 
    LIMITATION ON RESTRICTED PAYMENTS.  The Indenture provides that the Company
will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly: (i) declare or pay any dividend or make any distribution on account
of the Company's or any of its Restricted Subsidiaries' Equity Interests,
including any dividend or distribution payable in connection with any merger or
consolidation (other than (A) dividends or distributions by the Company payable
in Equity Interests (other than Disqualified Stock) of the Company or in
options, warrants or other rights to purchase such Equity Interests or (B)
dividends or distributions by a Restricted Subsidiary so long as, in the case of
any dividend or distribution payable on or in respect of any class or series of
securities issued by a Subsidiary other than a Wholly Owned Subsidiary, the
Company or a Restricted Subsidiary receives at least its pro rata share of such
dividend or distribution in accordance with its Equity Interests in such class
or series of securities); (ii) purchase, redeem, defease or otherwise acquire or
retire for value any Equity Interests of the Company or any direct or indirect
parent of the Company; (iii) make any principal payment on, or redeem,
repurchase, defease or otherwise acquire or retire for value in each case, prior
to any scheduled repayment, or maturity, any Subordinated Indebtedness (other
than (x) Indebtedness permitted under clauses (g) and (h) of the covenant
described under "--Limitations on Incurrence of Indebtedness and Issuance of
Disqualified Stock" or (y) the purchase, repurchase or other acquisition of
Subordinated Indebtedness purchased in anticipation of satisfying a sinking fund
obligation, principal installment or
 
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final maturity, in each case due within one year of the date of purchase,
repurchase or acquisition); or (iv) make any Restricted Investment (all such
payments and other actions set forth in clauses (i) through (iv) above being
collectively referred to as "Restricted Payments"), unless, at the time of such
Restricted Payment:
 
        (a) no Default or Event of Default shall have occurred and be continuing
    or would occur as a consequence thereof;
 
        (b) immediately after giving effect to such transaction on a pro forma
    basis, the Company could incur $1.00 of additional Indebtedness under the
    provisions of the first paragraph of "--Limitations on Incurrence of
    Indebtedness and Issuance of Disqualified Stock"; and
 
        (c) such Restricted Payment, together with the aggregate amount of all
    other Restricted Payments made by the Company and its Restricted
    Subsidiaries after the Issuance Date (including Restricted Payments
    permitted by clauses (i), (ii) (with respect to the payment of dividends on
    Refunding Capital Stock pursuant to clause (b) thereof), (iv) (only to the
    extent that amounts paid pursuant to such clause are greater than amounts
    that could have been paid pursuant to such clause if $5.0 million and $10.0
    million were substituted in such clause for $10.0 million and $20.0 million,
    respectively), (vi), (ix) and (x) of the next succeeding paragraph, but
    excluding all other Restricted Payments permitted by the next succeeding
    paragraph), is less than the sum of (i) 50% of the Consolidated Net Income
    of the Company for the period (taken as one accounting period) from the
    fiscal quarter that first begins after the Issuance Date to the end of the
    Company's most recently ended fiscal quarter for which internal financial
    statements are available at the time of such Restricted Payment (or, in the
    case such Consolidated Net Income for such period is a deficit, minus 100%
    of such deficit), PLUS (ii) 100% of the aggregate net cash proceeds and the
    fair market value, as determined in good faith by the Board of Directors, of
    marketable securities and Qualified Proceeds received by the Company since
    immediately after the closing of the Transactions from the issue or sale of
    Equity Interests of the Company (including Retired Capital Stock (as defined
    below), but excluding cash proceeds, marketable securities and Qualified
    Proceeds received from the sale of (A) Equity Interests to members of
    management, directors or consultants of the Company and its Subsidiaries
    after the Issuance Date to the extent such amounts have been applied to
    Restricted Payments made in accordance with clause (iv) of the next
    succeeding paragraph and (B) Designated Preferred Stock) or debt securities
    of the Company that have been converted into such Equity Interests of the
    Company (other than Refunding Capital Stock (as defined below) or Equity
    Interests or convertible debt securities of the Company sold to a Restricted
    Subsidiary of the Company and other than Disqualified Stock or debt
    securities that have been converted into Disqualified Stock), PLUS (iii)
    100% of the aggregate amount of cash, marketable securities and Qualified
    Proceeds contributed to the capital of the Company following the Issuance
    Date (other than by a Restricted Subsidiary of the Company), PLUS (iv) 100%
    of the aggregate amount received in cash, the fair market value of
    marketable securities and Qualified Proceeds (other than Restricted
    Investments) received by means of (A) the sale or other disposition (other
    than to the Company or a Restricted Subsidiary) of Restricted Investments
    made by the Company and its Restricted Subsidiaries and repurchases and
    redemptions of such Restricted Investments from the Company and its
    Restricted Subsidiaries and repayments of loans or advances which constitute
    Restricted Investments by the Company and its Restricted Subsidiaries or (B)
    the sale (other than to the Company or a Restricted Subsidiary) of the stock
    of an Unrestricted Subsidiary or a distribution from an Unrestricted
    Subsidiary (other than in each case to the extent the Investment in such
    Unrestricted Subsidiary was made by the Company or a Restricted Subsidiary
    pursuant to clauses (vii) or (xi) below or to the extent such Investment
    constituted a Permitted Investment) or a dividend from an Unrestricted
    Subsidiary plus (v) in the case of the redesignation of an Unrestricted
    Subsidiary as a Restricted Subsidiary, the fair market value of the
    Investment in such Unrestricted Subsidiary, as determined by the Board of
    Directors in good faith or if such fair market value may exceed $25
 
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    million, in writing by an independent investment banking firm of nationally
    recognized standing, at the time of the redesignation of such Unrestricted
    Subsidiary as a Restricted Subsidiary (other than an Unrestricted Subsidiary
    to the extent the Investment in such Unrestricted Subsidiary was made by the
    Company or a Restricted Subsidiary pursuant to clauses (vii) or (xi) below
    or to the extent such Investment constituted a Permitted Investment).
 
        The foregoing provisions will not prohibit:
 
         (i) the payment of any dividend within 60 days after the date of
    declaration thereof, if at the date of declaration such payment would have
    complied with the provisions of the Indenture;
 
        (ii) (a) the redemption, repurchase, retirement or other acquisition of
    any Equity Interests ("RETIRED CAPITAL STOCK") or Subordinated Indebtedness
    of the Company in exchange for, or out of the proceeds of the substantially
    concurrent sale (other than to a Restricted Subsidiary) of, Equity Interests
    of the Company (other than any Disqualified Stock) ("REFUNDING CAPITAL
    STOCK") and (b) the declaration and payment of dividends on the Refunding
    Capital Stock in an aggregate amount per year no greater than the aggregate
    amount of dividends per annum that was declarable and payable on such
    Retired Capital Stock immediately prior to such retirement;
 
        (iii) the redemption, repurchase or other acquisition or retirement of
    Subordinated Indebtedness of the Company made by exchange for, or out of the
    proceeds of the substantially concurrent sale of, new Indebtedness of the
    Company which is incurred in compliance with "--Limitations on Incurrence of
    Indebtedness and Issuance of Disqualified Stock" so long as (A) the
    principal amount of such new Indebtedness does not exceed the principal
    amount of the Subordinated Indebtedness being so redeemed, repurchased,
    acquired or retired for value (PLUS the amount of any premium required to be
    paid under the terms of the instrument governing the Subordinated
    Indebtedness being so redeemed, repurchased, acquired or retired), (B) such
    Indebtedness is subordinated to Senior Indebtedness and the Notes at least
    to the same extent as such Subordinated Indebtedness so purchased,
    exchanged, redeemed, repurchased, acquired or retired for value, (C) such
    Indebtedness has a final scheduled maturity date equal to or later than the
    final scheduled maturity date of the Subordinated Indebtedness being so
    redeemed, repurchased, acquired or retired and (D) such Indebtedness has a
    Weighted Average Life to Maturity equal to or greater than the remaining
    Weighted Average Life to Maturity of the Subordinated Indebtedness being so
    redeemed, repurchased, acquired or retired;
 
        (iv) a Restricted Payment to pay for the repurchase, retirement or other
    acquisition or retirement for value of common Equity Interests of the
    Company held by any future, present or former employee, director or
    consultant of the Company or any Subsidiary pursuant to any management
    equity plan or stock option plan or any other management or employee benefit
    plan or agreement; PROVIDED, HOWEVER, that the aggregate Restricted Payments
    made under this clause (iv) does not exceed in any calendar year $10.0
    million (with unused amounts in any calendar year being carried over to
    succeeding calendar years subject to a maximum (without giving effect to the
    following proviso) of $20.0 million in any calendar year); PROVIDED FURTHER
    that such amount in any calendar year may be increased by an amount not to
    exceed (A) the cash proceeds from the sale of Equity Interests of the
    Company to members of management, directors or consultants of the Company
    and its Subsidiaries that occurs after the Issuance Date (to the extent the
    cash proceeds from the sale of such Equity Interest have not otherwise been
    applied to the payment of Restricted Payments by virtue of the preceding
    paragraph (c)) plus (B) the cash proceeds of key man life insurance policies
    received by the Company and its Restricted Subsidiaries after the Issuance
    Date less (C) the amount of any Restricted Payments previously made pursuant
    to clauses (A) and (B) of this subparagraph (iv); and PROVIDED FURTHER that
    cancellation of Indebtedness owing to the Company from members of management
    of the Company or any of its Restricted Subsidiaries in connection
 
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    with a repurchase of Equity Interests of the Company will not be deemed to
    constitute a Restricted Payment for purposes of this covenant or any other
    provision of the Indenture;
 
        (v) the declaration and payment of dividends to holders of any class or
    series of Disqualified Stock of the Company issued in accordance with the
    covenant entitled "--Limitations on Incurrence of Indebtedness and Issuance
    of Disqualified Stock" to the extent such dividends are included in the
    definition of Fixed Charges;
 
        (vi) (A) the declaration and payment of dividends to holders of any
    class or series of Designated Preferred Stock (other than Disqualified
    Stock) issued after the Issuance Date or (B) the declaration and payment of
    dividends on Refunding Capital Stock in excess of the dividends declarable
    and payable thereon pursuant to clause (ii); PROVIDED, HOWEVER, in either
    case, that for the most recently ended four full fiscal quarters for which
    internal financial statements are available immediately preceding the date
    of issuance of such Designated Preferred Stock or the declaration of such
    dividends on Refunding Capital Stock, after giving effect to such issuance
    or declaration on a pro forma basis, the Company and its Restricted
    Subsidiaries would have had a Fixed Charge Coverage Ratio of at least 1.75
    to 1.00;
 
       (vii) Investments in Unrestricted Subsidiaries having an aggregate fair
    market value, taken together with all other Investments made pursuant to
    this clause (vii) that are at that time outstanding (without giving effect
    to the sale of an Unrestricted Subsidiary to the extent the proceeds of such
    sale do not consist of cash, marketable securities and/or Qualified Proceeds
    or distributions made pursuant to clause (xiv) below), not to exceed $25.0
    million at the time of such Investment (with the fair market value of each
    Investment being measured at the time made and without giving effect to
    subsequent changes in value);
 
       (viii) repurchases of Equity Interests deemed to occur upon exercise of
    stock options if such Equity Interests represent a portion of the exercise
    price of such options;
 
        (ix) the payment of dividends on the Company's Common Stock, following
    the first public offering of the Company's Common Stock after the Issuance
    Date, of up to 6% per annum of the net proceeds received by the Company in
    such public offering, other than public offerings with respect to the
    Company's Common Stock registered on Form S-8;
 
        (x) a Restricted Payment to pay for the repurchase, retirement or other
    acquisition or retirement for value of Equity Interests of the Company in
    existence on the Issuance Date and which are not held by KKR or any of their
    Affiliates on the Issuance Date (including any Equity Interests issued in
    respect of such Equity Interests as a result of a stock split,
    recapitalization, merger, combination, consolidation or otherwise, but
    excluding any management equity plan or stock option plan or similar
    agreement), PROVIDED that notwithstanding the foregoing proviso, the Company
    and its Restricted Subsidiaries shall be permitted to make Restricted
    Payments under this clause (x) only if after giving effect thereto, the
    Company would be permitted to incur at least $1.00 of additional
    Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
    the first sentence of the covenant described under "--Limitations on
    Incurrence of Indebtedness and Issuance of Disqualified Stock";
 
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        (xi) Investments that are made with Excluded Contributions;
 
       (xii) other Restricted Payments in an aggregate amount not to exceed
    $20.0 million;
 
       (xiii) distributions or payments of Receivables Fees;
 
       (xiv) the distribution, as a dividend or otherwise, of shares of Capital
    Stock of, or Indebtedness owed to the Company or a Restricted Subsidiary of
    the Company by, Unrestricted Subsidiaries (with the exception of Investments
    in Unrestricted Subsidiaries acquired pursuant to clause (j) of the
    definition of Permitted Investments);
 
       (xv) cash dividends and other payments to CCPC Acquisition in amounts
    equal to (A) the amounts required for CCPC Acquisition to pay any Federal,
    state or local income taxes to the extent that such income taxes are
    attributable to the income of the Company and its Subsidiaries and (B) the
    amounts required for CCPC Acquisition to pay franchise taxes, administrative
    and similar expenses related to its existence and to its ownership of the
    Company; and
 
       (xvi) cash dividends and other payments required to be made under the
    Recapitalization Agreement provided however, that at the time of, and after
    giving effect to, any Restricted Payment permitted under clauses (ii)(b),
    (iii) through (v) and (vi) through (x) and clauses (xii) and (xiv), no
    Default or Event or Default shall have occurred and be continuing or would
    occur as a consequence thereof. To the extent the issuance of Equity
    Interests and the receipt of capital contributions are applied to permit the
    issuance of Indebtedness pursuant to clause (m) of "--Limitation on
    Incurrence of Indebtedness and Issuance of Disqualified Stock," the issuance
    of such Equity Interests and the receipt of such capital contributions shall
    not be applied to permit payments under this covenant or Permitted
    Investments (other than clauses (a) and (c) thereof).
 
    As of the Issuance Date, all of the Company's Subsidiaries will be
Restricted Subsidiaries. The Company will not permit any Unrestricted Subsidiary
to become a Restricted Subsidiary except pursuant to the second to last sentence
of the definition of "Unrestricted Subsidiary." For purposes of designating any
Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments
by the Company and its Restricted Subsidiaries (except to the extent repaid) in
the Subsidiary so designated will be deemed to be Restricted Payments in an
amount determined as set forth in the last sentence of the definition of
"Investments." Such designation will be permitted only if a Restricted Payment
in such amount would be permitted at such time (whether pursuant to the first
paragraph of this covenant or under clauses (vii), (xi) and (xii)) and if such
Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
Unrestricted Subsidiaries will not be subject to any of the restrictive
covenants set forth in the Indenture.
 
    LIMITATIONS ON INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED
STOCK.  The Indenture provides that the Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "INCUR" and
collectively, an "INCURRENCE") any Indebtedness (including Acquired
Indebtedness) and that the Company will not issue any shares of Disqualified
Stock and will not permit any of its Restricted Subsidiaries to issue any shares
of preferred stock; PROVIDED, HOWEVER, that the Company may incur Indebtedness
(including Acquired Indebtedness) or issue shares of Disqualified Stock if the
Fixed Charge Coverage Ratio for the Company's and its Restricted Subsidiaries'
most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock is issued would have been at
least 1.75 to 1.00, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred, or the Disqualified Stock had been issued, as the case may
be, and the application of proceeds therefrom had occurred at the beginning of
such four-quarter period.
 
                                      111
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    The foregoing limitations will not apply to:
 
        (a) the existence of Indebtedness under Credit Facilities on the
    Issuance Date together with the incurrence by the Company of Indebtedness
    under Credit Facilities and the issuance and creation of letters of credit
    and bankers' acceptances thereunder (with letters of credit and bankers'
    acceptances being deemed to have a principal amount equal to the face amount
    thereof) up to an aggregate principal amount of $550.0 million outstanding
    at any one time;
 
        (b) the incurrence by the Company of Indebtedness represented by the
    Notes issued on the Issuance Date;
 
        (c) Existing Indebtedness (other than Indebtedness described in clauses
    (a) and (b));
 
        (d) Indebtedness (including Capitalized Lease Obligations) incurred by
    the Company or any of its Restricted Subsidiaries, to finance the purchase,
    lease or improvement of property (real or personal) or equipment (whether
    through the direct purchase of assets or the Capital Stock of any Person
    owning such assets) in an aggregate principal amount which, when aggregated
    with the principal amount of all other Indebtedness then outstanding and
    incurred pursuant to this clause (d) and including all Refinancing
    Indebtedness incurred to refund, refinance or replace any other Indebtedness
    incurred pursuant to this clause (d), does not exceed 20% of Total Assets;
 
        (e) Indebtedness incurred by the Company or any of its Restricted
    Subsidiaries constituting reimbursement obligations with respect to letters
    of credit issued in the ordinary course of business, including without
    limitation letters of credit in respect of workers' compensation claims or
    self-insurance, or other Indebtedness with respect to reimbursement type
    obligations regarding workers' compensation claims; PROVIDED, HOWEVER, that
    upon the drawing of such letters of credit or the incurrence of such
    Indebtedness, such obligations are reimbursed within 30 days following such
    drawing or incurrence;
 
        (f)  Indebtedness arising from agreements of the Company or a Restricted
    Subsidiary providing for indemnification, adjustment of purchase price or
    similar obligations, in each case, incurred or assumed in connection with
    the disposition of any business, assets or a Subsidiary, other than
    guarantees of Indebtedness incurred by any Person acquiring all or any
    portion of such business, assets or a Subsidiary for the purpose of
    financing such acquisition; PROVIDED, HOWEVER, that (i) such Indebtedness is
    not reflected on the balance sheet of the Company or any Restricted
    Subsidiary (contingent obligations referred to in a footnote to financial
    statements and not otherwise reflected on the balance sheet will not be
    deemed to be reflected on such balance sheet for purposes of this clause
    (i)) and (ii) the maximum assumable liability in respect of all such
    Indebtedness shall at no time exceed the gross proceeds including noncash
    proceeds (the fair market value of such noncash proceeds being measured at
    the time received and without giving effect to any subsequent changes in
    value) actually received by the Company and its Restricted Subsidiaries in
    connection with such disposition;
 
        (g) Indebtedness of the Company to a Restricted Subsidiary; PROVIDED
    that any such Indebtedness is subordinated in right of payment to the Notes;
    PROVIDED FURTHER that any subsequent issuance or transfer of any Capital
    Stock or any other event which results in any such Restricted Subsidiary
    ceasing to be a Restricted Subsidiary or any other subsequent transfer of
    any such Indebtedness (except to the Company or another Restricted
    Subsidiary) shall be deemed, in each case to be an incurrence of such
    Indebtedness;
 
        (h) Indebtedness of a Restricted Subsidiary to the Company or another
    Restricted Subsidiary; PROVIDED that (i) any such Indebtedness is made
    pursuant to an intercompany note and (ii) if a Guarantor incurs such
    Indebtedness from a Restricted Subsidiary that is not a Guarantor such
    Indebtedness is subordinated in right of payment to the Guarantee of such
    Guarantor; PROVIDED
 
                                      112
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    further that any subsequent transfer of any such Indebtedness (except to the
    Company or another Restricted Subsidiary) shall be deemed, in each case to
    be an incurrence of such Indebtedness;
 
         (i) shares of preferred stock of a Restricted Subsidiary issued to the
    Company or another Restricted Subsidiary; PROVIDED that any subsequent
    issuance or transfer of any Capital Stock or any other event which results
    in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or
    any other subsequent transfer of any such shares of preferred stock (except
    to the Company or another Restricted Subsidiary) shall be deemed in each
    case to be an issuance of such shares of preferred stock;
 
        (j)  Hedging Obligations that are incurred in the ordinary course of
    business (but in any event excluding Hedging Obligations entered into for
    speculative purposes);
 
        (k) obligations in respect of performance and surety bonds and
    completion guarantees provided by the Company or any Restricted Subsidiary
    in the ordinary course of business;
 
        (l)  Indebtedness of any Guarantor in respect of such Guarantor's
    Guarantee;
 
        (m) Indebtedness and Disqualified Stock of the Company or any of its
    Restricted Subsidiaries not otherwise permitted hereunder in an aggregate
    principal amount or liquidation preference, which when aggregated with the
    principal amount and liquidation preference of all other Indebtedness and
    Disqualified Stock then outstanding and incurred pursuant to this clause
    (m), does not at any one time outstanding exceed the sum of (x) $150.0
    million and (y) 100% of the net cash proceeds received by the Company since
    immediately after the Transactions from the issue or sale of Equity
    Interests of the Company or net cash proceeds contributed to the capital of
    the Company (in each case other than Disqualified Stock) as determined in
    accordance with clauses (c)(ii) and (c)(iii) of the first paragraph of
    "--Limitation on Restricted Payments" to the extent such net cash proceeds
    have not been applied pursuant to such clauses to make Restricted Payments
    or to make other payments or exchanges pursuant to the second paragraph of
    "--Limitation on Restricted Payments" or to make Permitted Investments
    (other than clauses (a) and (c) thereof) (it being understood that any
    Indebtedness incurred under this clause (m) shall cease to be deemed
    incurred or outstanding for purposes of this clause (m) but shall be deemed
    to be incurred for purposes of the first paragraph of this covenant from and
    after the first date on which the Company could have incurred such
    Indebtedness under the first paragraph of this covenant without reliance
    upon this clause (m));
 
        (n) (i) any guarantee by the Company of Indebtedness or other
    obligations of any of its Restricted Subsidiaries so long as the incurrence
    of such Indebtedness incurred by such Restricted Subsidiary is permitted
    under the terms of the Indenture and (ii) any guarantee by a Restricted
    Subsidiary of Indebtedness of the Company, PROVIDED that such guarantee is
    incurred in accordance with the covenant described below under "--Limitation
    on Guarantees of Indebtedness by Restricted Subsidiaries;"
 
        (o) the incurrence by the Company or any of its Restricted Subsidiaries
    of Indebtedness which serves to refund, refinance or restructure any
    Indebtedness incurred as permitted under the first paragraph of this
    covenant and clauses (b) and (c) above, this clause (o) and clause (p) below
    or any Indebtedness issued to so refund, refinance or restructure such
    Indebtedness including additional Indebtedness incurred to pay premiums and
    fees in connection therewith (the "REFINANCING INDEBTEDNESS") prior to its
    respective maturity; PROVIDED, HOWEVER, that such Refinancing Indebtedness
    (i) has a Weighted Average Life to Maturity at the time such Refinancing
    Indebtedness is incurred which is not less than the remaining Weighted
    Average Life to Maturity of Indebtedness being refunded or refinanced, (ii)
    to the extent such Refinancing Indebtedness refinances Indebtedness
    subordinated or PARI PASSU to the Notes, such Refinancing Indebtedness is
    subordinated or PARI PASSU to the Notes at least to the same extent as the
    Indebtedness being refinanced or
 
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    refunded and (iii) shall not include (x) Indebtedness of a Subsidiary that
    refinances Indebtedness of the Company or (y) Indebtedness of the Company or
    a Restricted Subsidiary that refinances Indebtedness of an Unrestricted
    Subsidiary; and PROVIDED FURTHER that subclauses (i) and (ii) of this clause
    (o) will not apply to any refunding or refinancing of any Senior
    Indebtedness; and
 
        (p) Indebtedness or Disqualified Stock of Persons that are acquired by
    the Company or any of its Restricted Subsidiaries or merged into a
    Restricted Subsidiary in accordance with the terms of the Indenture;
    PROVIDED that such Indebtedness or Disqualified Stock is not incurred in
    contemplation of such acquisition or merger; and PROVIDED FURTHER that after
    giving effect to such acquisition or merger, either (i) the Company would be
    permitted to incur at least $1.00 of additional Indebtedness pursuant to the
    Fixed Charge Coverage Ratio test set forth in the first sentence of this
    covenant or (ii) the Fixed Charge Coverage Ratio is greater than immediately
    prior to such acquisition or merger.
 
    For purposes of determining compliance with this covenant, in the event that
an item of Indebtedness meets the criteria of more than one of the categories of
permitted Indebtedness described in clauses (a) through (p) above or is entitled
to be incurred pursuant to the first paragraph of this covenant, the Company
shall, in its sole discretion, classify such item of Indebtedness in any manner
that complies with this covenant and such item of Indebtedness will be treated
as having been incurred pursuant to only one of such clauses or pursuant to the
first paragraph hereof except as otherwise set forth in clause (m). Accrual of
interest, the accretion of accreted value and the payment of interest in the
form of additional Indebtedness will not be deemed to be an incurrence of
Indebtedness for purposes of this covenant.
 
    For purposes of determining compliance with any U.S. dollar-denominated
restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent
principal amount of indebtedness denominated in a foreign currency shall be
calculated based on the relevant currency exchange rate in effect on the date
such Indebtedness was incurred, in the case of term debt, or first committed, in
the case of revolving credit debt; PROVIDED that (x) the U.S. dollar-equivalent
principal amount of any such Indebtedness outstanding or committed on the
Issuance Date shall be calculated based on the relevant currency exchange rate
in effect on March 31, 1998, and (y) if such Indebtedness is incurred to
refinance other Indebtedness denominated in a foreign currency, and such
refinancing would cause the applicable U.S. dollar-denominated restriction to be
exceeded if calculated at the relevant currency exchange rate in effect on the
date of such refinancing, such U.S. dollar-denominated restriction shall be
deemed not to have been exceeded so long as the principal amount of such
refinancing Indebtedness does not exceed the principal amount of such
Indebtedness being refinanced. The principal amount of any Indebtedness incurred
to refinance other Indebtedness, if incurred in a different currency from the
Indebtedness being refinanced, shall be calculated based on the currency
exchange rate applicable to the currencies in which such respective Indebtedness
is denominated that is in effect on the date of such refinancing.
 
    LIENS.  The Indenture provides that the Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly create,
incur, assume or suffer to exist any Lien that secures obligations under any
Senior Subordinated Indebtedness or Subordinated Indebtedness on any asset or
property of the Company or such Restricted Subsidiary, or any income or profits
therefrom, or assign or convey any right to receive income therefrom, unless the
Notes are equally and ratably secured (or senior to, in the event the Lien
relates to Subordinated Indebtedness) with the obligations so secured or until
such time as such obligations are no longer secured by a Lien.
 
    The Indenture provides that no Guarantor will directly or indirectly create,
incur, assume or suffer to exist any Lien that secures obligations under any
Senior Subordinated Indebtedness or Subordinated Indebtedness of such Guarantor
on any asset or property of such Guarantor or any income or profits therefrom,
or assign or convey any right to receive income therefrom, unless the Guarantee
of such Guarantor is equally and ratably secured (or senior to, in the event the
Lien relates to Subordinated
 
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<PAGE>
Indebtedness) with the obligations so secured or until such time as such
obligations are no longer secured by a Lien.
 
    MERGER, CONSOLIDATION, OR SALE OF ALL OR SUBSTANTIALLY ALL ASSETS.  The
Indenture provides that the Company may not consolidate or merge with or into or
wind up into (whether or not the Company is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its properties or assets in one or more related transactions, to any Person
unless (i) the Company is the surviving corporation or the Person formed by or
surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, lease, conveyance or other disposition
will have been made is a corporation organized or existing under the laws of the
United States, any state thereof, the District of Columbia, or any territory
thereof (the Company or such Person, as the case may be, being herein called the
"SUCCESSOR COMPANY"); (ii) the Successor Company (if other than the Company)
expressly assumes all the obligations of the Company under the Indenture and the
Notes pursuant to a supplemental indenture or other documents or instruments in
form reasonably satisfactory to the Trustee; (iii) immediately after such
transaction no Default or Event of Default exists; (iv) immediately after giving
pro forma effect to such transaction, as if such transaction had occurred at the
beginning of the applicable four-quarter period, (A) the Successor Company would
be permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first sentence of the covenant
described under "--Limitations on Incurrence of Indebtedness and Issuance of
Disqualified Stock" or (B) the Fixed Charge Coverage Ratio for the Successor
Company and its Restricted Subsidiaries would be greater than such Ratio for the
Company and its Restricted Subsidiaries immediately prior to such transaction;
(v) each Guarantor, if any, unless it is the other party to the transactions
described above, in which case clause (ii) shall apply, shall have by
supplemental indenture confirmed that its Guarantee shall apply to such Person's
obligations under the Indenture and the Notes; and (vi) the Company shall have
delivered to the Trustee an Officers' Certificate and an opinion of counsel,
each stating that such consolidation, merger or transfer and such supplemental
indenture (if any) comply with the Indenture. The Successor Company will succeed
to, and be substituted for, the Company under the Indenture and the Notes.
Notwithstanding the foregoing clause (iv), (a) any Restricted Subsidiary may
consolidate with, merge into or transfer all or part of its properties and
assets to the Company and (b) the Company may merge with an Affiliate
incorporated solely for the purpose of reincorporating the Company in another
State of the United States so long as the amount of Indebtedness of the Company
and its Restricted Subsidiaries is not increased thereby.
 
    Each Guarantor, if any, shall not, and the Company will not permit a
Guarantor to, consolidate or merge with or into or wind up into (whether or not
such Guarantor is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions to, any Person unless (i) such
Guarantor is the surviving corporation or the Person formed by or surviving any
such consolidation or merger (if other than such Guarantor) or to which such
sale, assignment, transfer, lease, conveyance or other disposition will have
been made is a corporation organized or existing under the laws of the United
States, any state thereof, the District of Columbia, or any territory thereof
(such Guarantor or such Person, as the case may be, being herein called the
"SUCCESSOR GUARANTOR"); (ii) the Successor Guarantor (if other than such
Guarantor) expressly assumes all the obligations of such Guarantor under the
Indenture and such Guarantor's Guarantee pursuant to a supplemental indenture or
other documents or instruments in form reasonably satisfactory to the Trustee;
(iii) immediately after such transaction no Default or Event of Default exists;
and (iv) the Company shall have delivered to the Trustee an Officers'
Certificate and an opinion of counsel, each stating that such consolidation,
merger or transfer and such supplemental indenture (if any) comply with the
Indenture. The Successor Guarantor will succeed to, and be substituted for, such
Guarantor under the Indenture and such Guarantor's Guarantee.
 
    TRANSACTIONS WITH AFFILIATES.  The Indenture provides that the Company will
not, and will not permit any of its Restricted Subsidiaries to, make any payment
to, or sell, lease, transfer or otherwise dispose of
 
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any of its properties or assets to, or purchase any property or assets from, or
enter into or make or amend any transaction, contract, agreement, understanding,
loan, advance or guarantee with, or for the benefit of, any Affiliate of the
Company (each of the foregoing, an "AFFILIATE TRANSACTION") involving aggregate
payments or consideration in excess of $5.0 million, unless (a) such Affiliate
Transaction is on terms that are not materially less favorable to the Company or
the relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person and (b) the Company delivers to the Trustee with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million, a resolution adopted by the
majority of the Board of Directors approving such Affiliate Transaction and set
forth in an Officers' Certificate certifying that such Affiliate Transaction
complies with clause (a) above.
 
    The foregoing provisions will not apply to the following: (i) transactions
between or among the Company and/or any of its Restricted Subsidiaries; (ii)
Restricted Payments permitted by the provisions of the Indenture described above
under the covenant "--Limitation on Restricted Payments"; (iii) the payment of
customary annual management, consulting, monitoring and advisory fees and
related expenses to KKR and its Affiliates; (iv) the payment of reasonable and
customary fees paid to, and indemnity provided on behalf of, officers,
directors, employees or consultants of the Company or any Restricted Subsidiary;
(v) payments by the Company or any of its Restricted Subsidiaries to KKR and its
Affiliates made for any financial advisory, financing, underwriting or placement
services or in respect of other investment banking activities, including,
without limitation, in connection with acquisitions or divestitures which
payments are approved by a majority of the Board of Directors of the Company in
good faith; (vi) transactions in which the Company or any of its Restricted
Subsidiaries, as the case may be, delivers to the Trustee a letter from an
Independent Financial Advisor stating that such transaction is fair to the
Company or such Restricted Subsidiary from a financial point of view or meets
the requirements of clause (a) of the preceding paragraph; (vii) payments or
loans to employees or consultants which are approved by a majority of the Board
of Directors of the Company in good faith; (viii) any agreement as in effect as
of the Issuance Date (including, without limitation, each of the agreements
entered into in connection with the Transactions) or any amendment thereto (so
long as any such amendment is not disadvantageous to the Holders in any material
respect) or any transaction contemplated thereby; (ix) the existence of, or the
performance by the Company or any of its Restricted Subsidiaries of its
obligations under the terms of, any stockholders agreement (including any
registration rights agreement or purchase agreement related thereto) to which it
is a party as of the Issuance Date and any similar agreements which it may enter
into thereafter; PROVIDED, HOWEVER, that the existence of, or the performance by
the Company or any of its Restricted Subsidiaries of obligations under any
future amendment to any such existing agreement or under any similar agreement
entered into after the Issuance Date shall only be permitted by this clause (ix)
to the extent that the terms of any such amendment or new agreement are not
otherwise disadvantageous to the Holders in any material respect; (x) the
Transactions and the payment of all fees and expenses related to the
Transactions (including the payment of any adjustment to the Cash Dividend or
the Contingent Payment); (xi) transactions with customers, clients, suppliers,
or purchasers or sellers of goods or services, in each case in the ordinary
course of business and otherwise in compliance with the terms of the Indenture
which are fair to the Company or its Restricted Subsidiaries, in the reasonable
determination of the Board of Directors of the Company or the senior management
thereof, or are on terms at least as favorable as might reasonably have been
obtained at such time from an unaffiliated party; (xii) sales of accounts
receivable, or participations therein, in connection with any Receivables
Facility; and (xiii) the issuance of Equity Interests (other than Disqualified
Stock) of the Company to any Permitted Holder and their Related Parties.
 
    DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.  The
Indenture provides that the Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or
 
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otherwise cause or suffer to exist or become effective any consensual
encumbrance or consensual restriction on the ability of any Restricted
Subsidiary to:
 
        (a) (i) pay dividends or make any other distributions to the Company or
    any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with
    respect to any other interest or participation in, or measured by, its
    profits, or (ii) pay any Indebtedness owed to the Company or any of its
    Restricted Subsidiaries;
 
        (b) make loans or advances to the Company or any of its Restricted
    Subsidiaries; or
 
        (c) sell, lease or transfer any of its properties or assets to the
    Company or any of its Restricted Subsidiaries, except (in each case) for
    such encumbrances or restrictions existing under or by reason of:
 
           (1) contractual encumbrances or restrictions in effect on the
       Issuance Date, including, without limitation, pursuant to Existing
       Indebtedness or the Senior Credit Facilities and their related
       documentation;
 
           (2) the Indenture and the Notes;
 
           (3) purchase money obligations for property acquired in the ordinary
       course of business that impose restrictions of the nature discussed in
       clause (c) above on the property so acquired;
 
           (4) applicable law or any applicable rule, regulation or order;
 
           (5) any agreement or other instrument of a Person acquired by the
       Company or any Restricted Subsidiary in existence at the time of such
       acquisition (but not created in contemplation thereof), which encumbrance
       or restriction is not applicable to any Person, or the properties or
       assets of any Person, other than the Person, or the property or assets of
       the Person, so acquired;
 
           (6) contracts for the sale of assets, including, without limitation
       customary restrictions with respect to a Subsidiary pursuant to an
       agreement that has been entered into for the sale or disposition of all
       or substantially all of the Capital Stock or assets of such Subsidiary;
 
           (7) secured Indebtedness otherwise permitted to be incurred pursuant
       to the covenants described under "--Limitations on Incurrence of
       Indebtedness and Issuance of Disqualified Stock" and "--Liens" that limit
       the right of the debtor to dispose of the assets securing such
       Indebtedness;
 
           (8) restrictions on cash or other deposits or net worth imposed by
       customers under contracts entered into in the ordinary course of
       business;
 
           (9) other Indebtedness or Disqualified Stock of Restricted
       Subsidiaries permitted to be incurred subsequent to the Issuance Date
       pursuant to the provisions of the covenant described under "--Limitations
       on Incurrence of Indebtedness and Issuance of Disqualified Stock";
 
           (10) customary provisions in joint venture agreements and other
       similar agreements entered into in the ordinary course of business;
 
           (11) customary provisions contained in leases and other agreements
       entered into in the ordinary course of business;
 
           (12) any encumbrances or restrictions of the type referred to in
       clauses (a), (b) and (c) above imposed by any amendments, modifications,
       restatements, renewals, increases,
 
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       supplements, refundings, replacements or refinancings of the contracts,
       instruments or obligations referred to in clauses (1) through (11) above,
       PROVIDED that such amendments, modifications, restatements, renewals,
       increases, supplements, refundings, replacements or refinancings are, in
       the good faith judgment of the Company's Board of Directors, no more
       restrictive with respect to such dividend and other payment restrictions
       than those contained in the dividend or other payment restrictions prior
       to such amendment, modification, restatement, renewal, increase,
       supplement, refunding, replacement or refinancing; or
 
           (13) restrictions created in connection with any Receivables Facility
       that, in the good faith determination of the Board of Directors of the
       Company, are necessary or advisable to effect such Receivables Facility.
 
    LIMITATION ON GUARANTEES OF INDEBTEDNESS BY RESTRICTED SUBSIDIARIES.  (a)
The Indenture provides that the Company will not permit any Restricted
Subsidiary to guarantee the payment of any Indebtedness of the Company unless
(i) such Restricted Subsidiary simultaneously executes and delivers a
supplemental indenture to the Indenture providing for a Guarantee of payment of
the Notes by such Restricted Subsidiary except that with respect to a guarantee
of Indebtedness of the Company (A) if the Notes are subordinated in right of
payment to such Indebtedness, the Guarantee under the supplemental indenture
shall be subordinated to such Restricted Subsidiary's guarantee with respect to
such Indebtedness substantially to the same extent as the Notes are subordinated
to such Indebtedness under the Indenture and (B) if such Indebtedness is by its
express terms subordinated in right of payment to the Notes, any such guarantee
of such Restricted Subsidiary with respect to such Indebtedness shall be
subordinated in right of payment to such Restricted Subsidiary's Guarantee with
respect to the Notes substantially to the same extent as such Indebtedness is
subordinated to the Notes; (ii) such Restricted Subsidiary waives and will not
in any manner whatsoever claim or take the benefit or advantage of, any rights
of reimbursement, indemnity or subrogation or any other rights against the
Company or any other Restricted Subsidiary as a result of any payment by such
Restricted Subsidiary under its Guarantee; and (iii) such Restricted Subsidiary
shall deliver to the Trustee an opinion of counsel to the effect that (A) such
Guarantee of the Notes has been duly executed and authorized and (B) such
Guarantee of the Notes constitutes a valid, binding and enforceable obligation
of such Restricted Subsidiary, except insofar as enforcement thereof may be
limited by bankruptcy, insolvency or similar laws (including, without
limitation, all laws relating to fraudulent transfers) and except insofar as
enforcement thereof is subject to general principles of equity; PROVIDED that
this paragraph (a) shall not be applicable to any guarantee of any Restricted
Subsidiary (x) that (A) existed at the time such Person became a Restricted
Subsidiary of the Company and (B) was not incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary of the Company or
(y) that guarantees the payment of Obligations of the Company or any Restricted
Subsidiary under the Senior Credit Facilities or any other Senior Indebtedness
and any refunding, refinancing or replacement thereof, in whole or in part,
PROVIDED that such refunding, refinancing or replacement thereof constitutes
Senior Indebtedness and PROVIDED FURTHER that any such Senior Indebtedness and
any refunding, refinancing or replacement thereof is not incurred pursuant to a
registered offering of securities under the Securities Act or a private
placement of securities (including under Rule 144A) pursuant to an exemption
from the registration requirements of the Securities Act, which private
placement provides for registration rights under the Securities Act.
 
    (b) Notwithstanding the foregoing and the other provisions of the Indenture,
any Guarantee by a Restricted Subsidiary of the Notes shall provide by its terms
that it shall be automatically and unconditionally released and discharged upon
(i) any sale, exchange or transfer, to any Person not an Affiliate of the
Company, of all of the Company's Capital Stock in, or all or substantially all
the assets of, such Restricted Subsidiary (which sale, exchange or transfer is
not prohibited by the Indenture) or (ii) the release or discharge of the
guarantee which resulted in the creation of such Guarantee, except a discharge
or release by or as a result of payment under such guarantee.
 
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    LIMITATION ON OTHER SENIOR SUBORDINATED INDEBTEDNESS.  The Indenture
provides that the Company will not, and will not permit any Guarantor to,
directly or indirectly, incur any Indebtedness (including Acquired Indebtedness)
that is subordinate in right of payment to any Indebtedness of the Company or
any Indebtedness of any Guarantor, as the case may be, unless such Indebtedness
is either (a) PARI PASSU in right of payment with the Notes or such Guarantor's
Guarantee, as the case may be or (b) subordinate in right of payment to the
Notes, or such Guarantor's Guarantee, as the case may be.
 
    REPORTS AND OTHER INFORMATION.  Notwithstanding that the Company may not be
subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act
or otherwise report on an annual and quarterly basis on forms provided for such
annual and quarterly reporting pursuant to rules and regulations promulgated by
the Securities and Exchange Commission (the "COMMISSION"), the Indenture will
require the Company to file with the Commission (and make available to the
Trustee and Holders (without exhibits), without cost to each Holder, within 15
days after it files them with the Commission), (a) within 90 days after the end
of each fiscal year, annual reports on Form 10-K (or any successor or comparable
form) containing the information required to be contained therein (or required
in such successor or comparable form); (b) within 45 days after the end of each
of the first three fiscal quarters of each fiscal year, reports on Form 10-Q (or
any successor or comparable form); (c) promptly from time to time after the
occurrence of an event required to be therein reported, such other reports on
Form 8-K (or any successor or comparable form); and (d) any other information,
documents and other reports which the Company would be required to file with the
Commission if it were subject to Section 13 or 15(d) of the Exchange Act;
PROVIDED, HOWEVER, the Company shall not be so obligated to file such reports
with the Commission if the Commission does not permit such filing, in which
event the Company will make available such information to prospective purchasers
of Notes, in addition to providing such information to the Trustee and the
Holders, in each case within 15 days after the time the Company would be
required to file such information with the Commission, if it were subject to
Sections 13 or 15(d) of the Exchange Act. Notwithstanding the foregoing, such
requirements shall be deemed satisfied prior to the Exchange Offer or the
effectiveness of the Shelf Registration Statement by the filing with the
Commission of the Exchange Offer Registration Statement and/or Shelf
Registration Statement, and any amendments thereto, with such financial
information that satisfies Regulation S-X of the Securities Act.
 
EVENTS OF DEFAULT AND REMEDIES
 
    The following events constitute Events of Default under the Indenture:
 
         (i) default in payment when due and payable, upon redemption,
    acceleration or otherwise, of principal of, or premium, if any, on the Notes
    whether or not such payment shall be prohibited by the subordination
    provisions relating to the Notes;
 
        (ii) default for 30 days or more in the payment when due of interest on
    or with respect to the Notes whether or not such payment shall be prohibited
    by the subordination provisions relating to the Notes;
 
        (iii) failure by the Company or any Guarantor for 30 days after receipt
    of written notice given by the Trustee or the holders of at least 30% in
    principal amount of the Notes then outstanding to comply with any of its
    other agreements in the Indenture or the Notes;
 
        (iv) default under any mortgage, indenture or instrument under which
    there is issued or by which there is secured or evidenced any Indebtedness
    for money borrowed by the Company or any of its Restricted Subsidiaries or
    the payment of which is guaranteed by the Company or any of its Restricted
    Subsidiaries (other than Indebtedness owed to the Company or a Restricted
    Subsidiary), whether such Indebtedness or guarantee now exists or is created
    after the Issuance Date, if both (A) such default either (1) results from
    the failure to pay any such Indebtedness at its stated final maturity (after
    giving effect to any applicable grace periods) or (2) relates to an
    obligation other than the obligation to pay principal of any such
    Indebtedness at its stated final maturity and results in the
 
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<PAGE>
    holder or holders of such Indebtedness causing such Indebtedness to become
    due prior to its stated maturity and (B) the principal amount of such
    Indebtedness, together with the principal amount of any other such
    Indebtedness in default for failure to pay principal at stated final
    maturity (after giving effect to any applicable grace periods), or the
    maturity of which has been so accelerated, aggregate $20.0 million or more
    at any one time outstanding;
 
        (v) failure by the Company or any of its Significant Subsidiaries to pay
    final judgments aggregating in excess of $20.0 million, which final
    judgments remain unpaid, undischarged and unstayed for a period of more than
    60 days after such judgment becomes final, and in the event such judgment is
    covered by insurance, an enforcement proceeding has been commenced by any
    creditor upon such judgment or decree which is not promptly stayed;
 
        (vi) certain events of bankruptcy or insolvency with respect to the
    Company or any of its Significant Subsidiaries; or
 
       (vii) the Guarantee of any Significant Subsidiary shall for any reason
    cease to be in full force and effect or be declared null and void or any
    responsible officer of the Company or any Guarantor that is a Significant
    Subsidiary denies that it has any further liability under its Guarantee or
    gives notice to such effect (other than by reason of the termination of the
    Indenture or the release of any such Guarantee in accordance with the
    Indenture).
 
    If any Event of Default (other than of a type specified in clause (vi)
above) occurs and is continuing under the Indenture, the Trustee or the Holders
of at least 30% in principal amount of the then outstanding Notes may declare
the principal, premium, if any, interest and any other monetary obligations on
all the then outstanding Notes to be due and payable immediately; PROVIDED,
HOWEVER, that, so long as any Indebtedness permitted to be incurred under the
Indenture as part of the Senior Credit Facilities shall be outstanding, no such
acceleration shall be effective until the earlier of (i) acceleration of any
such Indebtedness under the Senior Credit Facilities or (ii) five business days
after the giving of written notice to the Company and the administrative agent
under the Senior Credit Facilities of such acceleration. Upon the effectiveness
of such declaration, such principal and interest will be due and payable
immediately. Notwithstanding the foregoing, in the case of an Event of Default
arising under clause (vi) of the first paragraph of this section, all
outstanding Notes will become due and payable without further action or notice.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Indenture provides that the Trustee may withhold from
Holders notice of any continuing Default or Event of Default (except a Default
or Event of Default relating to the payment of principal, premium, if any, or
interest) if it determines that withholding notice is in their interest. In
addition, the Trustee shall have no obligation to accelerate the Notes if in the
best judgment of the Trustee acceleration is not in the best interest of the
Holders of such Notes.
 
    The Indenture provides that the Holders of a majority in aggregate principal
amount of the then outstanding Notes issued thereunder by notice to the Trustee
may on behalf of the Holders of all of such Notes waive any existing Default or
Event of Default and its consequences under the Indenture except a continuing
Default or Event of Default in the payment of interest on, premium, if any, or
the principal of any such Note held by a non-consenting Holder. In the event of
any Event of Default specified in clause (iv) above, such Event of Default and
all consequences thereof (including without limitation any acceleration or
resulting payment default) shall be annulled, waived and rescinded,
automatically and without any action by the Trustee or the Holders, if within 20
days after such Event of Default arose (x) the Indebtedness or guarantee that is
the basis for such Event of Default has been discharged, or (y) the holders
thereof have rescinded or waived the acceleration, notice or action (as the case
may be) giving rise to such Event of Default, or (z) if the default that is the
basis for such Event of Default has been cured.
 
    The Indenture provides that the Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required, within five Business Days, upon
 
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becoming aware of any Default or Event of Default or any default under any
document, instrument or agreement representing Indebtedness of the Company or
any Guarantor, to deliver to the Trustee a statement specifying such Default or
Event of Default.
 
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
 
    No director, officer, employee, incorporator or stockholder of the Company
or any Guarantor, shall have any liability for any obligations of the Company or
the Guarantors under the Notes, the Guarantees or the Indenture or for any claim
based on, in respect of, or by reason of such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes. Such
waiver may not be effective to waive liabilities under the federal securities
laws and it is the view of the Commission that such a waiver is against public
policy.
 
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
 
    The obligations of the Company and the Guarantors, if any, under the
Indenture will terminate (other than certain obligations) and will be released
upon payment in full of all of the Notes. The Company may, at its option and at
any time, elect to have all of its obligations discharged with respect to the
outstanding Notes and have each Guarantor's obligation discharged with respect
to its Guarantee ("LEGAL DEFEASANCE") and cure all then existing Events of
Default except for (i) the rights of Holders of outstanding Notes to receive
payments in respect of the principal of, premium, if any, and interest on such
Notes when such payments are due solely out of the trust created pursuant to the
Indenture, (ii) the Company's obligations with respect to Notes concerning
issuing temporary Notes, registration of such Notes, mutilated, destroyed, lost
or stolen Notes and the maintenance of an office or agency for payment and money
for security payments held in trust, (iii) the rights, powers, trusts, duties
and immunities of the Trustee, and the Company's obligations in connection
therewith and (iv) the Legal Defeasance provisions of the Indenture. In
addition, the Company may, at its option and at any time, elect to have the
obligations of the Company and each Guarantor released with respect to certain
covenants that are described in the Indenture ("COVENANT DEFEASANCE") and
thereafter any omission to comply with such obligations shall not constitute a
Default or Event of Default with respect to the Notes. In the event Covenant
Defeasance occurs, certain events (not including non-payment on other
indebtedness, bankruptcy, receivership, rehabilitation and insolvency events)
described under "Events of Default" will no longer constitute an Event of
Default with respect to the Notes.
 
    In order to exercise either Legal Defeasance or Covenant Defeasance with
respect to the Notes:
 
         (i) the Company must irrevocably deposit with the Trustee, in trust,
    for the benefit of the Holders, cash in U.S. dollars, non-callable
    Government Securities, or a combination thereof, in such amounts as will be
    sufficient, in the opinion of a nationally recognized firm of independent
    public accountants, to pay the principal of, premium, if any, and interest
    due on the outstanding Notes on the stated maturity date or on the
    applicable redemption date, as the case may be, of such principal, premium,
    if any, or interest on the outstanding Notes;
 
        (ii) in the case of Legal Defeasance, the Company shall have delivered
    to the Trustee an opinion of counsel in the United States reasonably
    acceptable to the Trustee confirming that, subject to customary assumptions
    and exclusions, (A) the Company has received from, or there has been
    published by, the United States Internal Revenue Service a ruling or (B)
    since the Issuance Date, there has been a change in the applicable U.S.
    federal income tax law, in either case to the effect that, and based thereon
    such opinion of counsel in the United States shall confirm that, subject to
    customary assumptions and exclusions, the Holders will not recognize income,
    gain or loss for U.S. federal income tax purposes as a result of such Legal
    Defeasance and will be subject to
 
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    U.S. federal income tax on the same amounts, in the same manner and at the
    same times as would have been the case if such Legal Defeasance had not
    occurred;
 
        (iii) in the case of Covenant Defeasance, the Company shall have
    delivered to the Trustee an opinion of counsel in the United States
    reasonably acceptable to the Trustee confirming that, subject to customary
    assumptions and exclusions, the Holders will not recognize income, gain or
    loss for U.S. federal income tax purposes as a result of such Covenant
    Defeasance and will be subject to such tax on the same amounts, in the same
    manner and at the same times as would have been the case if such Covenant
    Defeasance had not occurred;
 
        (iv) no Default or Event of Default shall have occurred and be
    continuing on the date of such deposit or, with respect to certain
    bankruptcy or insolvency Events of Default, on the 91st day after such date
    of deposit;
 
        (v) such Legal Defeasance or Covenant Defeasance shall not result in a
    breach or violation of, or constitute a default under, the Senior Credit
    Facilities or any other material agreement or instrument (other than the
    Indenture) to which, the Company or any Guarantor is a party or by which the
    Company or any Guarantor is bound;
 
        (vi) the Company shall have delivered to the Trustee an opinion of
    counsel to the effect that, as of the date of such opinion and subject to
    customary assumptions and exclusions following the deposit, the trust funds
    will not be subject to the effect of any applicable bankruptcy, insolvency,
    reorganization or similar laws affecting creditors' rights generally under
    any applicable U.S. federal or state law, and that the Trustee has a
    perfected security interest in such trust funds for the ratable benefit of
    the Holders;
 
       (vii) the Company shall have delivered to the Trustee an Officers'
    Certificate stating that the deposit was not made by the Company with the
    intent of defeating, hindering, delaying or defrauding any creditors of the
    Company or any Guarantor or others; and
 
       (viii) the Company shall have delivered to the Trustee an Officers'
    Certificate and an opinion of counsel in the United States (which opinion of
    counsel may be subject to customary assumptions and exclusions) each stating
    that all conditions precedent provided for or relating to the Legal
    Defeasance or the Covenant Defeasance, as the case may be, have been
    complied with.
 
SATISFACTION AND DISCHARGE
 
    The Indenture will be discharged and will cease to be of further effect as
to all Notes issued thereunder, when either (a) all such Notes theretofore
authenticated and delivered (except lost, stolen or destroyed Notes which have
been replaced or paid and Notes for whose payment money has theretofore been
deposited in trust) have been delivered to the Trustee for cancellation; or (b)
(i) all such Notes not theretofore delivered to such Trustee for cancellation
have become due and payable by reason of the making of a notice of redemption or
otherwise or will become due and payable within one year and the Company or any
Guarantor has irrevocably deposited or caused to be deposited with such Trustee
as trust funds in trust solely for the benefit of the Holders, cash in U.S.
dollars, non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient without consideration of any reinvestment of
interest to pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Trustee for cancellation for principal, premium, if
any, and accrued interest to the date of maturity or redemption; (ii) no Default
or Event of Default with respect to the Indenture or the Notes shall have
occurred and be continuing on the date of such deposit or shall occur as a
result of such deposit and such deposit will not result in a breach or violation
of, or constitute a default under, any other instrument to which the Company or
any Guarantor is a party or by which the Company or any Guarantor is bound;
(iii) the Company or any Guarantor has paid or caused to be paid all sums
payable by it under such Indenture; and (iv) the Company has delivered
irrevocable instructions to the Trustee under such
 
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Indenture to apply the deposited money toward the payment of such Notes at
maturity or the redemption date, as the case may be. In addition, the Company
must deliver an Officers' Certificate and an opinion of counsel to the Trustee
stating that all conditions precedent to satisfaction and discharge have been
satisfied.
 
TRANSFER AND EXCHANGE
 
    A Holder may transfer or exchange Notes in accordance with the Indenture.
The Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted by the
Indenture. The Company is not required to transfer or exchange any Note selected
for redemption. Also, the Company is not required to transfer or exchange any
Note for a period of 15 days before a selection of Notes to be redeemed.
 
    The registered Holder will be treated as the owner of it for all purposes.
 
AMENDMENT, SUPPLEMENT AND WAIVER
 
    Except as provided in the next two succeeding paragraphs, the Indenture, any
Guarantee and the Notes issued thereunder may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount of the
Notes then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, Notes),
and any existing default or compliance with any provision of the Indenture or
the Notes may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes (including consents obtained in
connection with a purchase of or tender offer or exchange offer for Notes).
 
    The Indenture provides that without the consent of each Holder affected, an
amendment or waiver may not (with respect to any Notes held by a non-consenting
Holder): (i) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver, (ii) reduce the principal of or change the
fixed maturity of any such Note or alter or waive the provisions with respect to
the redemption of the Notes (other than provisions relating to the covenants
described above under the caption "--Repurchase at the Option of Holders"),
(iii) reduce the rate of or change the time for payment of interest on any Note,
(iv) waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest on the Notes (except a rescission of acceleration
of the Notes by the Holders of at least a majority in aggregate principal amount
of such Notes and a waiver of the payment default that resulted from such
acceleration), or in respect of a covenant or provision contained in the
Indenture or any Guarantee which cannot be amended or modified without the
consent of all Holders, (v) make any Note payable in money other than that
stated in such Notes, (vi) make any change in the provisions of the Indenture
relating to waivers of past Defaults or the rights of Holders to receive
payments of principal of or premium, if any, or interest on the Notes, (vii)
make any change in the foregoing amendment and waiver provisions, (viii) impair
the right of any Holder to receive payment of principal of, or interest on such
Holder's Notes on or after the due dates therefor or to institute suit for the
enforcement of any payment on or with respect to such Holder's Notes or (ix)
make any change in the subordination provisions of the Indenture that would
adversely affect the Holders.
 
    The Indenture provides that, notwithstanding the foregoing, without the
consent of any Holder, the Company, any Guarantor (with respect to a Guarantee
or the Indenture to which it is a party) and the Trustee may amend or supplement
the Indenture, any Guarantee or the Notes (i) to cure any ambiguity, omission,
defect or inconsistency, (ii) to provide for uncertificated Notes in addition to
or in place of certificated Notes, (iii) to comply with the covenant relating to
mergers, consolidations and sales of assets, (iv) to provide for the assumption
of the Company's or any Guarantor's obligations to Holders, (v) to make any
change that would provide any additional rights or benefits to the Holders or
that does not adversely affect the legal rights under the Indenture of any such
Holder, (vi) to add covenants for the
 
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benefit of the Holders or to surrender any right or power conferred upon the
Company, (vii) to comply with requirements of the Commission in order to effect
or maintain the qualification of the Indenture under the Trust Indenture Act,
(viii) to evidence and provide for the acceptance and appointment under the
Indenture of a successor Trustee pursuant to the requirements thereof, or (ix)
to add a Guarantor under the Indenture.
 
    The consent of the Holders is not necessary under the Indenture to approve
the particular form of any proposed amendment. It is sufficient if such consent
approves the substance of the proposed amendment.
 
CONCERNING THE TRUSTEE
 
    The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any such
claim as security or otherwise. The Trustee will be permitted to engage in other
transactions; however, if it acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the Commission for permission to continue
or resign.
 
    The Indenture provides that the Holders of a majority in principal amount of
the outstanding Notes issued thereunder will have the right to direct the time,
method and place of conducting any proceeding for exercising any remedy
available to the Trustee, subject to certain exceptions. The Indenture will
provide that in case an Event of Default shall occur (which shall not be cured),
the Trustee will be required, in the exercise of its power, to use the degree of
care of a prudent person in the conduct of his own affairs. Subject to such
provisions, the Trustee will be under no obligation to exercise any of its
rights or powers under the Indenture at the request of any Holder of such Notes,
unless such Holder shall have offered to the Trustee security and indemnity
satisfactory to it against any loss, liability or expense.
 
GOVERNING LAW
 
    The Indenture, the Notes and the Guarantees, if any, will be, subject to
certain exceptions, governed by and construed in accordance with the internal
laws of the State of New York, without regard to the choice of law rules
thereof.
 
CERTAIN DEFINITIONS
 
    Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided. For
purposes of the Indenture, unless otherwise specifically indicated, the term
"consolidated" with respect to any Person refers to such Person consolidated
with its Restricted Subsidiaries, and excludes from such consolidation any
Unrestricted Subsidiary as if such Unrestricted Subsidiary were not an Affiliate
of such Person.
 
    "ACQUIRED INDEBTEDNESS" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Restricted Subsidiary of such specified Person, and (ii) Indebtedness secured by
a Lien encumbering any asset acquired by such specified Person.
 
    "AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly
 
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or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting securities,
by agreement or otherwise.
 
    "ASSET SALE" means (i) the sale, conveyance, transfer or other disposition
(whether in a single transaction or a series of related transactions) of
property or assets (including by way of a sale and leaseback) of the Company or
any Restricted Subsidiary (each referred to in this definition as a
"DISPOSITION") or (ii) the issuance or sale of Equity Interests of any
Restricted Subsidiary (whether in a single transaction or a series of related
transactions), in each case, other than:
 
        (a) a disposition of Cash Equivalents or Investment Grade Securities or
    obsolete or worn out equipment in the ordinary course of business or
    inventory or goods held for sale in the ordinary course of business;
 
        (b) the disposition of all or substantially all of the assets of the
    Company in a manner permitted pursuant to the provisions described above
    under "--Merger, Consolidation or Sale of All or Substantially All Assets"
    or any disposition that constitutes a Change of Control pursuant to the
    Indenture;
 
        (c) the making of any Restricted Payment or Permitted Investment that is
    permitted to be made, and is made, under the covenant described above under
    "--Limitation on Restricted Payments";
 
        (d) any disposition of assets with an aggregate fair market value of
    less than $1.0 million;
 
        (e) any disposition of property or assets or issuance of securities by a
    Restricted Subsidiary to the Company or by the Company or a Restricted
    Subsidiary to a Restricted Subsidiary;
 
        (f)  any exchange of like property pursuant to Section 1031 of the
    Internal Revenue Code of 1986, as amended, for use in a Similar Business;
 
        (g) the lease, assignment or sub-lease of any real or personal property
    in the ordinary course of business;
 
        (h) any financing transaction with respect to property built or acquired
    by the Company or any Restricted Subsidiary after the Issuance Date,
    including, without limitation, sale-leasebacks and asset securitizations;
 
        (i)  foreclosures on assets;
 
        (j)  any sale of Equity Interests in, or Indebtedness or other
    securities of, an Unrestricted Subsidiary (with the exception of Investments
    in Unrestricted Subsidiaries acquired pursuant to clause (j) of the
    definition of Permitted Investments); and
 
        (k) sales of accounts receivable, or participations therein, in
    connection with any Receivables Facility.
 
    "CAPITAL STOCK" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.
 
    "CAPITALIZED LEASE OBLIGATION" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized and reflected as a liability on
a balance sheet (excluding the footnotes thereto) in accordance with GAAP.
 
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<PAGE>
    "CASH EQUIVALENTS" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof, (iii) certificates of deposit, time
deposits and eurodollar time deposits with maturities of one year or less from
the date of acquisition, bankers' acceptances with maturities not exceeding one
year and overnight bank deposits, in each case with any commercial bank having
capital and surplus in excess of $500.0 million, (iv) repurchase obligations for
underlying securities of the types described in clauses (ii) and (iii) entered
into with any financial institution meeting the qualifications specified in
clause (iii) above, (v) commercial paper rated A-1 or the equivalent thereof by
Moody's or S&P and in each case maturing within one year after the date of
acquisition, (vi) investment funds investing 95% of their assets in securities
of the types described in clauses (i)-(v) above, (vii) readily marketable direct
obligations issued by any state of the United States of America or any political
subdivision thereof having one of the two highest rating categories obtainable
from either Moody's or S&P and (viii) Indebtedness or preferred stock issued by
Persons with a rating of "A" or higher from S&P or "A2" or higher from Moody's.
 
    "CHANGE OF CONTROL" means the occurrence of any of the following:
 
        (i)  the sale, lease or transfer, in one or a series of related
    transactions, of all or substantially all of the assets of the Company and
    its Subsidiaries, taken as a whole, to any Person other than a Permitted
    Holder and their Related Parties; or
 
        (ii) the Company becomes aware of (by way of a report or any other
    filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written
    notice or otherwise) the acquisition by any Person or group (within the
    meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any
    successor provision), including any group acting for the purpose of
    acquiring, holding or disposing of securities (within the meaning of Rule
    13d-5(b)(1) under the Exchange Act), other than the Permitted Holders and
    their Related Parties, in a single transaction or in a related series of
    transactions, by way of merger, consolidation or other business combination
    or purchase of beneficial ownership (within the meaning of Rule 13d-3 under
    the Exchange Act, or any successor provision) of 50% or more of the total
    Voting Stock of the Company.
 
    "CONSOLIDATED DEPRECIATION AND AMORTIZATION EXPENSE" means with respect to
any Person for any period, the total amount of depreciation and amortization
expense and other noncash charges (excluding any noncash item that represents an
accrual, reserve or amortization of a cash expenditure for a future period) of
such Person and its Restricted Subsidiaries for such period on a consolidated
basis and otherwise determined in accordance with GAAP.
 
    "CONSOLIDATED INTEREST EXPENSE" means, with respect to any period, the sum,
without duplication, of: (a) consolidated interest expense of such Person and
its Restricted Subsidiaries for such period, to the extent such expense was
deducted in computing Consolidated Net Income (including amortization of
original issue discount, non-cash interest payments, the interest component of
Capitalized Lease Obligations, and net payments (if any) pursuant to Hedging
Obligations, excluding amortization of deferred financing fees) and (b)
consolidated capitalized interest of such Person and its Restricted Subsidiaries
for such period, whether paid or accrued; PROVIDED, HOWEVER, that Receivables
Fees shall be deemed not to constitute Consolidated Interest Expense.
 
    "CONSOLIDATED NET INCOME" means, with respect to any Person for any period,
the aggregate of the Net Income, of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, and otherwise determined in accordance
with GAAP; PROVIDED, HOWEVER, that (i) any net after-tax extraordinary gains or
losses (less all fees and expenses relating thereto) shall be excluded, (ii) the
Net Income for such period shall not include the cumulative effect of a change
in accounting principles during such period, (iii) any net after-tax income
(loss) from discontinued operations and any net after-tax gains or losses on
disposal of discontinued operations shall be excluded, (iv) any net after-tax
gains or losses (less all fees and expenses relating thereto) attributable to
asset dispositions other than in the ordinary
 
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course of business (as determined in good faith by the Board of Directors of the
Company) shall be excluded, (v) the Net Income for such period of any Person
that is not a Subsidiary, or is an Unrestricted Subsidiary, or that is accounted
for by the equity method of accounting, shall be excluded; PROVIDED that
Consolidated Net Income of the Company shall be increased by the amount of
dividends or distributions or other payments actually paid in cash (or to the
extent converted into cash) to the referent Person or a Restricted Subsidiary
(subject to the limits in clause (vii) below) thereof in respect of such period,
(vi) the Net Income of any Person acquired in a pooling of interests transaction
shall not be included for any period prior to the date of such acquisition and
(vii) the Net Income for such period of any Restricted Subsidiary shall be
excluded if the declaration or payment of dividends or similar distributions by
that Restricted Subsidiary of its Net Income is not at the date of determination
wholly permitted without any prior governmental approval (which has not been
obtained) or, directly or indirectly, by the operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule, or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders, unless such restriction with respect to the payment of dividends
or in similar distributions has been legally waived; PROVIDED that Consolidated
Net Income of the Company shall be increased by the amount of dividends or other
distributions or other payments actually paid in cash (or to the extent
converted into cash) to the referent Person or a Restricted Subsidiary thereof
in respect of such period. Notwithstanding the foregoing, for the purpose of the
covenant described under "Certain Covenants--Limitation on Restricted Payments"
only, there shall be excluded from Consolidated Net Income any sale or other
disposition of Restricted Investments made by the Company and its Restricted
Subsidiaries, repurchases and redemptions of Restricted Investments, repayments
of loans and advances which constitute Restricted Investments, sales of the
stock of an Unrestricted Subsidiary or distributions or dividends from an
Unrestricted Subsidiary, in each case only to the extent such amounts increase
the amount of Restricted Payments permitted under such covenant pursuant to
clause (c)(iv) thereof.
 
    "CONTINGENT OBLIGATIONS" means, with respect to any Person, any obligation
of such Person guaranteeing any leases, dividends or other obligations that do
not constitute Indebtedness ("PRIMARY OBLIGATIONS") of any other Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (A) for the
purchase or payment of any such primary obligation or (B) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, or (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation against loss in respect thereof.
 
    "CREDIT FACILITIES" means, with respect to the Company, one or more debt
facilities (including, without limitation, the Senior Credit Facilities) or
commercial paper facilities with banks or other institutional lenders or
indentures providing for revolving credit loans, term loans, receivables
financing (including through the sale of receivables to such lenders or to
special purpose entities formed to borrow from such lenders against
receivables), letters of credit or other long-term indebtedness, in each case,
as amended, restated, modified, renewed, refunded, replaced or refinanced in
whole or in part from time to time.
 
    "DEFAULT" means any event that is, or with the passage of time or the giving
of notice or both would be, an Event of Default.
 
    "DESIGNATED NONCASH CONSIDERATION" means the fair market value of noncash
consideration received by the Company or one of its Restricted Subsidiaries in
connection with an Asset Sale that is so designated as Designated Noncash
Consideration pursuant to an Officers' Certificate, setting forth the basis of
such valuation, executed by the principal executive officer and the principal
financial officer of the Company, less the amount of cash or Cash Equivalents
received in connection with a subsequent sale of such Designated Noncash
Consideration.
 
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    "DESIGNATED PREFERRED STOCK" means preferred stock of the Company (other
than Disqualified Stock) that is issued for cash (other than to a Restricted
Subsidiary) and is so designated as Designated Preferred Stock, pursuant to an
Officers' Certificate executed by the principal executive officer and the
principal financial officer of the Company, on the issuance date thereof, the
cash proceeds of which are excluded from the calculation set forth in paragraph
(c) of the "--Limitation on Restricted Payments" covenant.
 
    "DISQUALIFIED STOCK" means, with respect to any Person, any Capital Stock of
such Person which, by its terms (or by the terms of any security into which it
is convertible or for which it is putable or exchangeable), or upon the
happening of any event, matures or is mandatorily redeemable (other than as a
result of a change of control or asset sale), pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof
(other than as a result of a change of control or asset sale), in whole or in
part, in each case prior to the date 91 days after the earlier of the maturity
date of the Notes or the date the Notes are no longer outstanding; PROVIDED,
HOWEVER, that if such Capital Stock is issued to any plan for the benefit of
employees of the Company or its Subsidiaries or by any such plan to such
employees, such Capital Stock shall not constitute Disqualified Stock solely
because it may be required to be repurchased by the Company or its Subsidiaries
in order to satisfy applicable statutory or regulatory obligations.
 
    "EBITDA" means, with respect to any Person for any period, the Consolidated
Net Income of such Person for such period plus (a) provision for taxes based on
income or profits of such Person for such period deducted in computing
Consolidated Net Income, plus (b) Consolidated Interest Expense of such Person
for such period and any Receivables Fees paid by such Person or any of its
Restricted Subsidiaries during such period, in each case to the extent the same
was deducted in calculating such Consolidated Net Income, plus (c) Consolidated
Depreciation and Amortization Expense of such Person for such period to the
extent such depreciation and amortization were deducted in computing
Consolidated Net Income, plus (d) any expenses or charges related to any Equity
Offering, Permitted Investment, acquisition, recapitalization or Indebtedness
permitted to be incurred by the Indenture (whether or not successful) (including
such fees, expenses or charges related to the Transactions) and deducted in such
period in computing Consolidated Net Income, plus (e) the amount of any
restructuring charge deducted in such period in computing Consolidated Net
Income (including any one-time costs incurred in connection with acquisitions
after the Issuance Date), plus (f) without duplication, any other non-cash
charges reducing Consolidated Net Income for such period (excluding any such
charge which requires an accrual of a cash reserve for any future period) plus
(g) the amount of any minority interest expense deducted in calculating
Consolidated Net Income, less, without duplication (h) non-cash items increasing
Consolidated Net Income of such Person for such period (excluding any items
which represent the reversal of any accrual of, or cash reserve for, anticipated
cash charges in any prior period).
 
    "EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
 
    "EQUITY OFFERING" means any public or private sale of common stock or
preferred stock of the Company (excluding Disqualified Stock), other than (i)
public offerings with respect to the Company's Common Stock registered on Form
S-8 and (ii) any such public or private sale that constitutes an Excluded
Contribution.
 
    "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder.
 
    "EXCLUDED CONTRIBUTION" means net cash proceeds, marketable securities or
Qualified Proceeds, in each case, received by the Company from (a) contributions
to its common equity capital and (b) the sale (other than to a Subsidiary or to
any Company or Subsidiary management equity plan or stock option plan or any
other management or employee benefit plan or agreement) of Capital Stock (other
than Disqualified Stock and Designated Preferred Stock) of the Company, in each
case designated as
 
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Excluded Contributions pursuant to an Officers' Certificate executed by the
principal executive officer and the principal financial officer of the Company
on the date such capital contributions are made or the date such Equity
Interests are sold, as the case may be, which are excluded from the calculation
set forth in paragraph (c) under "--Limitation on Restricted Payments."
 
    "EXISTING INDEBTEDNESS" means Indebtedness of the Company or its Restricted
Subsidiaries in existence on the Issuance Date, plus interest accruing thereon,
after application of the net proceeds of the sale of the Old Notes as described
in this Prospectus.
 
    "FIXED CHARGE COVERAGE RATIO" means, with respect to any Person for any
period, the ratio of EBITDA of such Person for such period to the Fixed Charges
of such Person for such period. In the event that the Company or any of its
Restricted Subsidiaries incurs, assumes, guarantees or redeems any Indebtedness
or issues or redeems Disqualified Stock or preferred stock subsequent to the
commencement of the period for which the Fixed Charge Coverage Ratio is being
calculated but prior to the event for which the calculation of the Fixed Charge
Coverage Ratio is made (the "CALCULATION DATE"), then the Fixed Charge Coverage
Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, guarantee or redemption of Indebtedness, or such issuance or
redemption of Disqualified Stock or preferred stock, as if the same had occurred
at the beginning of the applicable four-quarter period. For purposes of making
the computation referred to above, Investments, acquisitions, dispositions,
mergers, consolidations and discontinued operations (as determined in accordance
with GAAP) that have been made by the Company or any of its Restricted
Subsidiaries during the four-quarter reference period or subsequent to such
reference period and on or prior to or simultaneously with the Calculation Date
shall be calculated on a pro forma basis assuming that all such Investments,
acquisitions, dispositions, mergers, consolidations and discontinued operations
(and the reduction of any associated fixed charge obligations and the change in
EBITDA resulting therefrom) had occurred on the first day of the four-quarter
reference period. If since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period) shall
have made any Investment, acquisition, disposition, merger, consolidation or
discontinued operation that would have required adjustment pursuant to this
definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro
forma effect thereto for such period as if such Investment, acquisition,
disposition, merger, consolidation or discontinued operation had occurred at the
beginning of the applicable four-quarter period. For purposes of this
definition, whenever pro forma effect is to be given to a transaction, the pro
forma calculations shall be made in good faith by a responsible financial or
accounting officer of the Company. If any Indebtedness bears a floating rate of
interest and is being given pro forma effect, the interest on such Indebtedness
shall be calculated as if the rate in effect on the Calculation Date had been
the applicable rate for the entire period (taking into account any Hedging
Obligations applicable to such Indebtedness). Interest on a Capitalized Lease
Obligation shall be deemed to accrue at an interest rate reasonably determined
by a responsible financial or accounting officer of the Company to be the rate
of interest implicit in such Capitalized Lease Obligation in accordance with
GAAP. For purposes of making the computation referred to above, interest on any
Indebtedness under a revolving credit facility computed on a pro forma basis
shall be computed based upon the average daily balance of such Indebtedness
during the applicable period. Interest on Indebtedness that may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rate, shall be deemed to have been
based upon the rate actually chosen, or, if none, then based upon such optional
rate chosen as the Company may designate.
 
    "FIXED CHARGES" means, with respect to any Person for any period, the sum of
(a) Consolidated Interest Expense of such Person for such period and (b) all
cash dividend payments (excluding items eliminated in consolidation) on any
series of Disqualified Stock of such Person.
 
    "FOREIGN SUBSIDIARY" means a Restricted Subsidiary not organized or existing
under the laws of the United States, any State thereof, the District of
Columbia, or any territory thereof.
 
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<PAGE>
    "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the Issuance Date. For the purposes of the
Indenture, the term "consolidated" with respect to any Person shall mean such
Person consolidated with its Restricted Subsidiaries, and shall not include any
Unrestricted Subsidiary.
 
    "GOVERNMENT SECURITIES" means securities that are (a) direct obligations of
the United States of America for the timely payment of which its full faith and
credit is pledged or (b) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America the
timely payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act), as custodian with respect to any such Government Securities
or a specific payment of principal of or interest on any such Government
Securities held by such custodian for the account of the holder of such
depository receipt; PROVIDED that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the Government Securities or the specific payment of principal of or interest on
the Government Securities evidenced by such depository receipt.
 
    "GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness or other obligations.
 
    "GUARANTEE" means any guarantee of the obligations of the Company under the
Indenture and the Notes by any Person in accordance with the provisions of the
Indenture. When used as a verb, "Guarantee" shall have a corresponding meaning.
No Guarantees will be issued in connection with the initial offering and sale of
the Notes.
 
    "GUARANTOR" means any Person that incurs a Guarantee; PROVIDED that upon the
release and discharge of such Person from its Guarantee in accordance with the
Indenture, such Person shall cease to be a Guarantor. No Guarantees will be
issued in connection with the initial offering and sale of the Notes.
 
    "HEDGING OBLIGATIONS" means, with respect to any Person, the obligations of
such Person under (i) currency exchange, interest rate or commodity swap
agreements, currency exchange, interest rate or commodity cap agreements and
currency exchange, interest rate or commodity collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in currency exchange, interest rates or commodity prices.
 
    "HOLDER" means a holder of the Notes.
 
    "INDEBTEDNESS" means, with respect to any Person, (a) any indebtedness
(including principal and premium) of such Person, whether or not contingent (i)
in respect of borrowed money, (ii) evidenced by bonds, notes, debentures or
similar instruments or letters of credit or bankers' acceptances (or, without
double counting, reimbursement agreements in respect thereof), (iii)
representing the balance deferred and unpaid of the purchase price of any
property (including Capitalized Lease Obligations), except any such balance that
constitutes a trade payable or similar obligation to a trade creditor, in each
case accrued in the ordinary course of business or (iv) representing any Hedging
Obligations, if and to the extent of any of the foregoing Indebtedness (other
than letters of credit and Hedging Obligations) that would appear as a liability
upon a balance sheet (excluding the footnotes thereto) of such Person prepared
in accordance with GAAP, (b) to the extent not otherwise included, any
obligation by such
 
                                      130
<PAGE>
Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the
Indebtedness of another Person (other than by endorsement of negotiable
instruments for collection in the ordinary course of business) and (c) to the
extent not otherwise included, Indebtedness of another Person secured by a Lien
on any asset owned by such Person (whether or not such Indebtedness is assumed
by such Person); PROVIDED, HOWEVER, that Contingent Obligations incurred in the
ordinary course of business shall be deemed not to constitute Indebtedness, and
obligations under or in respect of Receivables Facilities shall not be deemed to
constitute Indebtedness of a Person.
 
    In addition, "Indebtedness" of any Person shall include Indebtedness
described in the foregoing paragraph that would not appear as a liability on the
balance sheet of such Person if (i) such Indebtedness is the obligation of a
partnership or a joint venture that is not a Restricted Subsidiary (a "Joint
Venture"), (2) such Person or a Restricted Subsidiary is a general partner of
the Joint Venture (a "General Partner") and (3) there is recourse, by contract
or operation of law, with respect to the payment of such Indebtedness to
property or assets of such Person or a Restricted Subsidiary; and such
Indebtedness shall be included in an amount not to exceed (x) the greater of (A)
the net assets of the General Partner and (B) the amount of such obligations to
the extent that there is recourse by, contract or operation of law, to the
property or assets of such Person or a Restricted Subsidiary (other than the
General Partner) or (y) if less than the amount determined pursuant to clause
(x) immediately above, the actual amount of such Indebtedness that is recourse
to such Person, if the Indebtedness is evidenced by a writing and is for a
determinable amount and the related interest expense shall be included in
Consolidated Interest Expense to the extent paid by the Company or its
Restricted Subsidiaries.
 
    "INDEPENDENT FINANCIAL ADVISOR" means an accounting, appraisal, investment
banking firm or consultant to Persons engaged in Similar Businesses of
nationally recognized standing that is, in the good faith judgment of the
Company, qualified to perform the task for which it has been engaged.
 
    "INVESTMENT GRADE SECURITIES" means (i) securities issued or directly and
fully guaranteed or insured by the United States government or any agency or
instrumentality thereof (other than Cash Equivalents), (ii) debt securities or
debt instruments with a rating of BBB- or higher by S&P or Baa3 or higher by
Moody's or the equivalent of such rating by such rating organization, or, if no
rating of S&P or Moody's then exists, the equivalent of such rating by any other
nationally recognized securities rating agency, but excluding any debt
securities or instruments constituting loans or advances among the Company and
its Subsidiaries, and (iii) investments in any fund that invests exclusively in
investments of the type described in clauses (i) and (ii) which fund may also
hold immaterial amounts of cash pending investment and/or distribution.
 
    "INVESTMENTS" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the form of loans (including
guarantees), advances or capital contributions (excluding accounts receivable,
trade credit, advances to customers, commission, travel and similar advances to
officers and employees made in the ordinary course of business), purchases or
other acquisitions for consideration of Indebtedness, Equity Interests or other
securities issued by any other Person and investments that are required by GAAP
to be classified on the balance sheet (excluding the footnotes) of the Company
in the same manner as the other investments included in this definition to the
extent such transactions involve the transfer of cash or other property. For
purposes of the definition of "Unrestricted Subsidiary" and the covenant
described under "--Certain Covenants--Limitation on Restricted Payments," (i)
"Investments" shall include the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net assets of a
Subsidiary of the Company at the time that such Subsidiary is designated an
Unrestricted Subsidiary; provided, however, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue
to have a permanent "Investment" in an Unrestricted Subsidiary in an amount (if
positive) equal to (x) the Company's "Investment" in such Subsidiary at the time
of such redesignation less (y) the portion (proportionate to the Company's
equity interest in such Subsidiary) of the fair market value of the net assets
of such Subsidiary at the time of such redesignation; and (ii) any property
transferred to or
 
                                      131
<PAGE>
from an Unrestricted Subsidiary shall be valued at its fair market value at the
time of such transfer, in each case as determined in good faith by the Company.
 
    "ISSUANCE DATE" means the closing date for the sale and original issuance of
the Old Notes under the Indenture.
 
    "LETTER OF CREDIT OBLIGATIONS" means all Obligations in respect of
Indebtedness of the Company with respect to letters of credit issued pursuant to
the Senior Credit Facilities which Indebtedness shall be deemed to consist of
(a) the aggregate maximum amount available to be drawn under all such letters of
credit (the determination of such aggregate maximum amount to assume compliance
with all conditions for drawing) and (b) the aggregate amount that has been paid
by, and not reimbursed to, the issuers under such letters of credit.
 
    "LIEN" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law (including
any conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction); PROVIDED that in
no event shall an operating lease be deemed to constitute a Lien.
 
    "MOODY'S" means Moody's Investors Service, Inc.
 
    "NET INCOME" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends.
 
    "NET PROCEEDS" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
Designated Noncash Consideration received in any Asset Sale), net of the direct
costs relating to such Asset Sale and the sale or disposition of such Designated
Noncash Consideration (including, without limitation, legal, accounting and
investment banking fees, and brokerage and sales commissions), any relocation
expenses incurred as a result thereof, taxes paid or payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements), amounts required to be applied to the repayment of
principal, premium (if any) and interest on Indebtedness required (other than
required by clause (i) of the second paragraph of "--Repurchase at the Option of
Holders--Asset Sales") to be paid as a result of such transaction and any
deduction of appropriate amounts to be provided by the Company as a reserve in
accordance with GAAP against any liabilities associated with the asset disposed
of in such transaction and retained by the Company after such sale or other
disposition thereof, including, without limitation, pension and other
post-employment benefit liabilities and liabilities related to environmental
matters or against any indemnification obligations associated with such
transaction.
 
    "OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements (including, without limitation, reimbursement
obligations with respect to letters of credit and banker's acceptances), damages
and other liabilities, and guarantees of payment of such principal, interest,
penalties, fees, indemnifications, reimbursements, damages and other
liabilities, payable under the documentation governing any Indebtedness.
 
    "OFFICER" means the Chairman of the Board, the President, any Executive Vice
President, Senior Vice President or Vice President, the Treasurer or the
Secretary of the Company.
 
    "OFFICERS' CERTIFICATE" means a certificate signed on behalf of the Company
by two Officers of the Company, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company that meets the requirements set forth in the
Indenture.
 
    "PERMITTED HOLDERS" means KKR and any of its Affiliates.
 
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<PAGE>
    "PERMITTED INVESTMENTS" means (a) any Investment in the Company or any
Restricted Subsidiary; (b) any Investment in cash and Cash Equivalents or
Investment Grade Securities; (c) any Investment by the Company or any Restricted
Subsidiary of the Company in a Person that is engaged in a Similar Business if
as a result of such Investment (i) such Person becomes a Restricted Subsidiary
or (ii) such Person, in one transaction or a series of related transactions, is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Restricted Subsidiary; (d) any Investment in securities or other assets not
constituting cash or Cash Equivalents and received in connection with an Asset
Sale made pursuant to the provisions of "-- Repurchase at the Option of
Holders--Asset Sales" or any other disposition of assets not constituting an
Asset Sale; (e) any Investment existing on the Issuance Date; (f) advances to
employees not in excess of $10.0 million outstanding at any one time, in the
aggregate; (g) any Investment acquired by the Company or any of its Restricted
Subsidiaries (i) in exchange for any other Investment or accounts receivable
held by the Company or any such Restricted Subsidiary in connection with or as a
result of a bankruptcy, workout, reorganization or recapitalization of the
issuer of such other Investment or accounts receivable or (ii) as a result of a
foreclosure by the Company or any of its Restricted Subsidiaries with respect to
any secured Investment or other transfer of title with respect to any secured
Investment in default; (h) Hedging Obligations permitted under clause (j) of the
"Limitation of Incurrence of Indebtedness and Issuance of Disqualified Stock"
covenant; (i) loans and advances to officers, directors and employees for
business-related travel expenses, moving expenses and other similar expenses, in
each case incurred in the ordinary course of business; (j) any Investment in a
Similar Business having an aggregate fair market value, taken together with all
other Investments made pursuant to this clause (j) that are at that time
outstanding (without giving effect to the sale of an Unrestricted Subsidiary to
the extent the proceeds of such sale do not consist of cash, marketable
securities and/or Qualified Proceeds), not to exceed the greater of (x) $100.0
million or (y) 15% of Total Assets at the time of such Investment (with the fair
market value of each Investment being measured at the time made and without
giving effect to subsequent changes in value); (k) Investments the payment for
which consists of Equity Interests of the Company (exclusive of Disqualified
Stock); PROVIDED, HOWEVER, that such Equity Interests will not increase the
amount available for Restricted Payments under clause (c) of the "Limitation on
Restricted Payments" covenant; (l) additional Investments having an aggregate
fair market value, taken together with all other Investments made pursuant to
this clause (l) that are at that time outstanding (without giving effect to the
sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do
not consist of cash, marketable securities and/or Qualified Proceeds or
distributions made pursuant to clause (xiv) of the second paragraph of
"--Limitation on Restricted Payments"), not to exceed the greater of (x) $30.0
million or (y) 5% of Total Assets at the time of such Investment (with the fair
market value of each Investment being measured at the time made and without
giving effect to subsequent changes in value); (m) Investments in a Similar
Business having an aggregate fair market value, taken together with all other
Investments made pursuant to this clause (m) that are at that time outstanding
(without giving effect to the sale of an Unrestricted Subsidiary to the extent
the proceeds of such sale do not consist of cash, marketable securities and/or
Qualified Proceeds or distributions made pursuant to clause (xiv) of the second
paragraph of "--Limitation on Restricted Payments"), not to exceed $100.0
million at the time of such Investment (with the fair market value of each
Investment being measured at the time made and without giving effect to
subsequent changes in value); PROVIDED that at the time of such Investment the
Company would be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence
of the covenant described under "--Limitation on Incurrence of Indebtedness and
Issuance of Disqualified Stock;" (n) Investments relating to any special purpose
Wholly-Owned Subsidiary of the Company organized in connection with a
Receivables Facility that, in the good faith determination of the Board of
Directors of the Company, are necessary or advisable to effect such Receivables
Facility; (o) guarantees (including Guarantees) of Indebtedness permitted under
the covenant "--Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock;" (p) any transaction to the extent it constitutes an
investment that is permitted and made in accordance with the provisions of the
second paragraph of the covenant described under
 
                                      133
<PAGE>
"Certain Covenants--Transactions with Affiliates" (except transactions described
in clauses (ii), (vi), (vii) and (xi) of such paragraph); and (q) Investments
consisting of the licensing or contribution of intellectual property pursuant to
joint marketing arrangements with other Persons.
 
    "PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
 
    "PREFERRED STOCK" means any Equity Interest with preferential rights of
payment of dividends or upon liquidation, dissolution, or winding up.
 
    "QUALIFIED PROCEEDS" means assets that are used or useful in, or Capital
Stock of any Person engaged in, a Similar Business; PROVIDED that the fair
market value of any such assets or Capital Stock shall be determined by the
Board of Directors in good faith, except that in the event the value of any such
assets or Capital Stock may exceed $25.0 million or more, the fair value shall
be determined in writing by an independent investment banking firm of nationally
recognized standing.
 
    "RECEIVABLES FACILITY" means one or more receivables financing facilities,
as amended from time to time, pursuant to which the Company and/or any of its
Restricted Subsidiaries sells its accounts receivable to a Person that is not a
Restricted Subsidiary.
 
    "RECEIVABLES FEES" means distributions or payments made directly or by means
of discounts with respect to any participation interest issued or sold in
connection with, and other fees paid to a Person that is not a Restricted
Subsidiary in connection with, any Receivables Facility.
 
    "RELATED PARTIES" means any Person controlled by a Permitted Holder,
including any partnership or limited liability company of which a Permitted
Holder or its Affiliates is the general partner or managing member, as the case
may be.
 
    "RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
 
    "RESTRICTED SUBSIDIARY" means, at any time, any direct or indirect
Subsidiary of the Company that is not then an Unrestricted Subsidiary; PROVIDED,
HOWEVER, that upon the occurrence of an Unrestricted Subsidiary ceasing to be an
Unrestricted Subsidiary, such Subsidiary shall be included in the definition of
"Restricted Subsidiary."
 
    "S&P" means Standard and Poor's Ratings Group.
 
    "SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
 
    "SENIOR CREDIT FACILITIES" means that certain Credit Agreement dated as of
April 9, 1998 among the Company, The Chase Manhattan Bank, as administrative
agent, Salomon Brothers Inc, as syndication agent, Bankers Trust Company, as
documentation agent and the several lenders from time to time parties thereto,
including any collateral documents, instruments and agreements executed in
connection therewith, and any amendments, supplements, modifications,
extensions, renewals, restatements or refundings thereof and any indentures or
credit facilities or commercial paper facilities with banks or other
institutional lenders that replace, refund or refinance any part of the loans,
notes, other credit facilities or commitments thereunder, including any such
replacement, refunding or refinancing facility or indenture that increases the
amount borrowable thereunder or alters the maturity thereof, PROVIDED, HOWEVER,
that in connection with any facilities which refund, replace or refinance such
Credit Agreement there shall not be more than one facility at any one time that
is identified as the Senior Credit Facilities and, if at any time there is more
than one facility which would constitute the Senior Credit Facilities, the
Company will designate to the Trustee which one of such facilities will be the
Senior Credit Facilities for purposes of the Indenture.
 
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<PAGE>
    "SENIOR SUBORDINATED INDEBTEDNESS" means (a) with respect to the Company,
Indebtedness which ranks PARI PASSU in right of payment to the Notes and (b)
with respect to any Guarantor, Indebtedness which ranks PARI PASSU in right of
payment to the Guarantee of such Guarantor.
 
    "SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof.
 
    "SIMILAR BUSINESS" means the housewares and appliance businesses and any
activities or businesses incidental, directly related or similar thereto, or any
line of business engaged in by the Company or its Subsidiaries on the Issuance
Date or any business activity that is a reasonable extension, development or
expansion thereof or ancillary thereto.
 
    "SUBORDINATED INDEBTEDNESS" means (a) with respect to the Company, any
Indebtedness of the Company which is by its terms subordinated in right of
payment to the Notes and (b) with respect to any Guarantor, any Indebtedness of
such Guarantor which is by its terms subordinated in right of payment to the
Guarantee of such Guarantor.
 
    "SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association, or other business entity (other than a partnership, joint venture,
limited liability company or similar entity) of which more than 50% of the total
voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time of determination owned or controlled, directly
or indirectly, by such Person or one or more of the other Subsidiaries of that
Person or a combination thereof and (ii) any partnership, joint venture, limited
liability company or similar entity of which (x) more than 50% of the capital
accounts, distribution rights, total equity and voting interests or general or
limited partnership interests, as applicable, are owned or controlled, directly
or indirectly, by such Person or one or more of the other Subsidiaries of that
Person or a combination thereof whether in the form of membership, general,
special or limited partnership or otherwise and (y) such Person or any Wholly
Owned Restricted Subsidiary of such Person is a controlling general partner or
otherwise controls such entity.
 
    "TOTAL ASSETS" means the total consolidated assets of the Company and its
Restricted Subsidiaries, as shown on the most recent balance sheet of the
Company.
 
    "UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary of the Company which at
the time of determination is an Unrestricted Subsidiary (as designated by the
Board of Directors of the Company, as provided below) and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors of the Company may designate
any Subsidiary of the Company (including any existing Subsidiary and any newly
acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless
such Subsidiary or any of its Subsidiaries owns any Equity Interests or
Indebtedness of, or owns or holds any Lien on, any property of, the Company or
any Subsidiary of the Company (other than any Subsidiary of the Subsidiary to be
so designated), PROVIDED that (a) any Unrestricted Subsidiary must be an entity
of which shares of the capital stock or other equity interests (including
partnership interests) entitled to cast at least a majority of the votes that
may be cast by all shares or equity interests having ordinary voting power for
the election of directors or other governing body are owned, directly or
indirectly, by the Company, (b) such designation complies with the covenants
described under "--Certain Covenants--Limitation on Restricted Payments" and (c)
each of (I) the Subsidiary to be so designated and (II) its Subsidiaries has not
at the time of designation, and does not thereafter, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable with respect
to any Indebtedness pursuant to which the lender has recourse to any of the
assets of the Company or any of its Restricted Subsidiaries. The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; PROVIDED that, immediately after giving effect to such designation
no Default or Event of Default shall have occurred and be continuing and either
(i) the Company could incur at least $1.00 of additional Indebtedness pursuant
 
                                      135
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to the Fixed Charge Coverage Ratio test described under "--Certain
Covenants--Limitations on Incurrence of Indebtedness and Issuance of
Disqualified Stock" or (ii) the Fixed Charge Coverage Ratio for the Company and
its Restricted Subsidiaries would be greater than such ratio for the Company and
its Restricted Subsidiaries immediately prior to such designation, in each case
on a pro forma basis taking into account such designation. Any such designation
by the Board of Directors shall be notified by the Company to the Trustee by
promptly filing with the Trustee a copy of the board resolution giving effect to
such designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions.
 
    "VOTING STOCK" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
 
    "WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Indebtedness
or Disqualified Stock, as the case may be, at any date, the quotient obtained by
dividing (i) the sum of the products of the number of years from the date of
determination to the date of each successive scheduled principal payment of such
Indebtedness or redemption or similar payment with respect to such Disqualified
Stock multiplied by the amount of such payment, by (ii) the sum of all such
payments.
 
    "WHOLLY OWNED RESTRICTED SUBSIDIARY" is any Wholly Owned Subsidiary that is
a Restricted Subsidiary.
 
    "WHOLLY OWNED SUBSIDIARY" of any Person means a Subsidiary of such Person,
100% of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person and one or
more Wholly Owned Subsidiaries of such Person.
 
                                      136
<PAGE>
                   EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
 
    The Company and the Initial Purchasers entered into the Exchange and
Registration Rights Agreement concurrently with the issuance of the Old Notes.
Pursuant to the Exchange and Registration Rights Agreement, the Company agreed
to (i) file with the Commission on or prior to 100 days after the date of
issuance of the Old Notes (the "Issue Date" or the "Issuance Date") a
registration statement on an appropriate form under the Securities Act (the
"Exchange Offer Registration Statement"), with respect to the "Exchange Offer"
for the Old Notes under the Securities Act and (ii) use its reasonable best
efforts to cause the Exchange Offer Registration Statement to be declared
effective under the Securities Act within 200 days after the Issue Date. As soon
as practicable after the effectiveness of the Exchange Offer Registration
Statement, the Company will offer to the holders of Transfer Restricted
Securities who are not prohibited by any law or policy of the Commission from
participating in the Exchange Offer the opportunity to exchange their Restricted
Securities for an issue of a Exchange Notes that are identical in all material
respects to the Notes (except that the Exchange Notes will not contain terms
with respect to transfer restrictions) and that would be registered under the
Securities Act. The Company will keep the Exchange Offer open for not less than
20 business days (or longer, if required by applicable law) after the date on
which notice of the Exchange Offer is mailed to the holders of the Notes.
 
    If (i) because of any change in law or applicable interpretations thereof by
the staff of the Commission, the Company is not permitted to effect the Exchange
Offer as contemplated hereby, (ii) any Old Notes validly tendered pursuant to
the Exchange Offer are not exchanged for Exchange Notes within 230 days after
the Issue Date, (iii) any Initial Purchaser so requests with respect to Old
Notes not eligible to be exchanged for Exchange Notes in the Exchange Offer,
(iv) any applicable law or interpretations do not permit any holder of Old Notes
to participate in the Exchange Offer or (v) any holder of Old Notes that
participates in the Exchange Offer does not receive freely transferable Exchange
Notes in exchange for tendered Old Notes, then the Company will file with the
Commission a shelf registration statement (the "Shelf Registration Statement")
to cover resales of Transfer Restricted Securities by such holders who satisfy
certain conditions relating to the provision of information in connection with
the Shelf Registration Statement. For purposes of the foregoing, "Transfer
Restricted Securities" means each Old Note until (i) the date on which such Old
Note has been exchanged for a freely transferable Exchange Note in the Exchange
Offer, (ii) the date on which such Old Notes has been effectively registered
under the Securities Act and disposed of in accordance with the Shelf
Registration Statement or (iii) the date on which such Old Note is distributed
to the public pursuant to Rule 144 under the Securities Act or is salable
pursuant to Rule 144(k) under the Securities Act.
 
    The Company will use its reasonable best efforts to have the Exchange Offer
Registration Statement or, if applicable, the Shelf Registration Statement
(each, a "Registration Statement") declared effective by the Commission as
promptly as practicable after the filing thereof. Unless the Exchange Offer
would not be permitted by a policy of the Commission, the Company will commence
the Exchange Offer and will use its reasonable best efforts to consummate the
Exchange Offer as promptly as practicable, but in any event prior to 230 days
after the Issue Date. If applicable, the Company will use its reasonable best
efforts to keep the Shelf Registration Statement effective for a period until
two years after the Issue Date or such shorter period when all Old Notes covered
by the Shelf Registration Statement have been sold in the manner set forth and
as contemplated in the Shelf Registration Statement or when the Notes became
eligible for resale pursuant to Rule 144 under the Securities Act without volume
restrictions, if any.
 
    If (i) the applicable Registration Statement is not fixed with the
Commission on or prior to 100 days after the Issue Date (or, in the case of a
Shelf Registration Statement required to be filed in response to a change in law
or applicable interpretations of the Staff of the Commission, if later, within
45 days after publication of the change in law or interpretations, but in no
event before 100 calendar days after the Issuance Date); (ii) the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
is not declared effective within 200 days after the Issue Date (or in the case
of a Shelf Registration Statement required to be filed in response to a change
in law or applicable interpretations of
 
                                      137
<PAGE>
the Staff of the Commission, if later, within 90 days after publication of the
change in law or interpretations, but in no event before 200 days after the
Issuance Date); (iii) the Exchange Offer is not consummated on or prior to 230
days after the Issue Date (other than in the event the Company files a Shelf
Registration Statement) or (iv) the Shelf Registration Statement is filed and
declared effective within 200 days after the Issue Date but shall thereafter
cease to be effective (at any time that the Company is obligated to maintain the
effectiveness thereof) without being succeeded within 90 days by an additional
Registration Statement filed and declared effective (each such event referred to
in clauses (i) through (iv), a "Registration Default"), the Company will be
obligated to pay liquidated damages to each holder of Transfer Restricted
Securities, during the period of one or more such Registration Defaults, with
respect to the first 90-day period immediately following the occurrence of the
first Registration Default in an amount equal to one-quarter of one percent per
annum (which rate will be increased by an additional one-quarter of one percent
per annum for each subsequent 90-day period that any liquidated damages continue
to accrue; provided that the rate at which liquidated damages accrue may in no
event exceed one percent per annum) in respect of the Old Notes constituting
Transfer Restricted Securities held by such holder until the applicable
Registration Statement is filed, the Exchange Offer Registration Statement is
declared effective and the Exchange Offer is consummated or the Shelf
Registration Statement is declared effective or again becomes effective, as the
case may be. All accrued liquidated damages shall be paid to holders in the same
manner as interest payments on the Old Notes on semi-annual payment dates which
correspond to interest payment dates for the Old Notes. Following the cure of
all Registration Defaults, the accrual of liquidated damages will cease.
Notwithstanding the foregoing, the Company may issue a notice that the Shelf
Registration Statement is unusable pending the announcement of a material
corporate transaction and may issue any notice suspending use of the Shelf
Registration Statement required under applicable securities laws to be issued
and, in the event that the aggregate number of days in any consecutive
twelve-month period for which all such notices are issued and effective exceeds
30 days in the aggregate, then the Company will be obligated to pay liquidated
damages to each holder of Transfer Restricted Securities in an amount equal to
one-quarter of one percent per annum (which rate will be increased by an
additional one-quarter of one percent per annum for each subsequent 90-day
period that liquidated damages continue to accrue; provided that the rate at
which liquidated damages accrue may in no event exceed one percent per annum) in
respect of the Old Notes constituting Transfer Restricted Securities. Upon the
Company declaring that the Shelf Registration Statement is usable after the
period of time described in the preceding sentence the accrual of liquidated
damages shall cease.
 
    The Exchange and Registration Rights Agreement also provides that the
Company (i) shall make available for a period of 90 days after the consummation
of the Exchange Offer a prospectus meeting the requirements of the Securities
Act to any broker-dealer for use in connection with any resale of any such
Exchange Notes and (ii) shall pay expenses incident to the Exchange Offer and
will indemnify certain holders of the Notes (including any broker-dealer)
against certain liabilities, including liabilities under the Securities Act. A
broker-dealer that delivers such a prospectus to purchasers in connection with
such resales will be subject to certain of the civil liability provisions under
the Securities Act and will be bound by the provisions of the Exchange and
Registration Rights Agreement (including certain indemnification rights and
obligations).
 
    Each holder of Old Notes who wishes to exchange such Old Notes for Exchange
Notes in the Exchange Offer will be required to make certain representations,
including representations that (i) any Exchange Notes to be received by it will
be acquired in the ordinary course of its business; (ii) it has no arrangement
or understanding with any person to participate in the distribution of the
Exchange Notes and (iii) it is not an "affiliate" (as defined in Rule 405 under
the Securities Act) of the Company, or if it is an affiliate, that will comply
with the registration and prospectus delivery requirements of the Securities Act
to the extent applicable.
 
                                      138
<PAGE>
    If the holder is not a broker-dealer, it will be required to represent that
it is not engaged in, and does not intend to engage in, the distribution of the
Exchange Notes. If the holder is a broker-dealer that will receive Exchange
Notes for its own account in exchange for Old Notes that were acquired as a
result of market-making activities or other trading activities (an "Exchanging
Dealer"), it will be required to acknowledge that it will deliver a prospectus
in connection with any resale of such Exchange Notes.
 
    Holders of the Old Notes will be required to make certain representations to
the Company (as described above) in order to participate in the Exchange Offer
and will be required to deliver information to be used in connection with the
Shelf Registration Statement in order to have their Old Notes included in the
Shelf Registration statement and benefit from the provisions regarding
liquidated damages set forth in the preceding paragraphs. A holder who sells Old
Notes pursuant to the Shelf Registration Statement generally will be required to
be named as a selling securityholder in the related prospectus and to deliver a
prospectus to purchasers, will be subject to certain of the civil liability
provisions under the Securities Act in connection with such sales and will be
bound by the provisions of the Exchange and Registration Rights Agreement which
are applicable to such a holder (including certain indemnification obligations).
 
    For so long as the Old Notes are outstanding, the Company will continue to
provide to holders of the Old Notes and to prospective purchasers of the Old
Notes the information required by Rule 144A(d)(4) under the Securities Act.
 
    The foregoing description of the Exchange and Registration Rights Agreement
is a summary only, does not purport to be complete and is qualified in its
entirety by reference to all provisions of the Exchange and Registration Rights
Agreement. The Company will provide a copy of the Exchange and Registration
Rights Agreement to prospective purchasers of Old Notes identified to the
Company by any Initial Purchaser upon request.
 
                                      139
<PAGE>
                         BOOK-ENTRY; DELIVERY AND FORM
 
    The certificates representing the Exchange Notes will be issued in fully
registered form. The Exchange Notes initially will be represented by a single,
permanent global Exchange Note, in definitive, fully registered form without
interest coupons (the "Global Exchange Note") and will be deposited with the
Trustee as custodian for The Depository Trust Company, New York, New York
("DTC") and registered in the name of a nominee of DTC.
 
CERTAIN BOOK-ENTRY PROCEDURES FOR THE GLOBAL NOTES
 
    The descriptions of the operations and procedures of DTC, Euroclear and
Cedel set forth below are provided solely as a matter of convenience. These
operations and procedures are solely within the control of the respective
settlement systems and are subject to change by them from time to time. Neither
the Company nor any of the Initial Purchasers takes any responsibility for these
operations or procedures, and investors are urged to contact the relevant system
or its participants directly to discuss these matters.
 
    DTC has advised the Company that it is (i) a limited purpose trust company
organized under the laws of the State of New York, (ii) a "banking organization"
within the meaning of the New York Banking Law, (iii) a member of the Federal
Reserve System, (iv) a "clearing corporation" within the meaning of the Uniform
Commercial Code, as amended and (v) a "clearing agency" registered pursuant to
Section 17A of the Exchange Act. DTC was created to hold securities for its
participants (collectively, the "Participants") and facilitates the clearance
and settlement of securities transactions between Participants through
electronic book-entry changes to the accounts of its Participants, thereby
eliminating the need for physical transfer and delivery of certificates. DTC's
Participants include securities brokers and dealers (including the Initial
Purchasers), banks and trust companies, clearing corporations and certain other
organizations. Indirect access to DTC's system is also available to other
entities such as banks, brokers, dealers and trust companies (collectively, the
"Indirect Participants") that clear through or maintain a custodial relationship
with a Participant, either directly or indirectly. Investors who are not
Participants may beneficially own securities held by or on behalf of DTC only
through Participants or Indirect Participants.
 
    The Company expects that pursuant to procedures established by DTC upon
deposit of each Global Exchange Note, ownership of the Exchange Notes will be
shown on, and the transfer of ownership thereof will be effected only through,
records maintained by DTC (with respect to the interests of Participants) and
the records of Participants and the Indirect Participants (with respect to the
interests of persons other than Participants).
 
    The laws of some jurisdictions may require that certain purchasers of
securities take physical delivery of such securities in definitive form.
Accordingly, the ability to transfer interests in the Exchange Notes represented
by a Global Exchange Note to such persons may be limited. In addition, because
DTC can act only on behalf of its Participants, who in turn act on behalf of
persons who hold interests through Participants, the ability of a person having
an interest in Exchange Notes represented by a Global Exchange Note to pledge or
transfer such interest to persons or entities that do not participate in DTC's
system, or to otherwise take actions in respect of such interest, may be
affected by the lack of a physical definitive security in respect of such
interest.
 
    So long as DTC or its nominee is the registered owner of a Global Exchange
Note, DTC or such nominee, as the case may be, will be considered the sole owner
or holder of the Exchange Notes represented by the Global Exchange Note for all
purposes under the Indenture. Except as provided below, owners of beneficial
interests in a Global Exchange Note will not be entitled to have Exchange Notes
represented by such Global Exchange Note registered in their names, will not
receive or be entitled to receive physical delivery of Certificated Notes, and
will not be considered the owners or holders thereof under the Indenture for any
purpose, including with respect to the giving of any direction,
 
                                      140
<PAGE>
instruction or approval to the Trustee thereunder. Accordingly, each holder
owning a beneficial interest in a Global Exchange Note must rely on the
procedures of DTC and, if such holder is not a Participant or an Indirect
Participant, on the procedures of the Participant through which such holder owns
its interest, to exercise any rights of a holder of Exchange Notes under the
Indenture or such Exchange Global Note. The Company understands that under
existing industry practice, in the event that the Company requests any action of
holders of Exchange Notes, or a holder that is an owner of a beneficial interest
in a Global Exchange Note desires to take any action that DTC, as the holder of
such Global Exchange Note, is entitled to take, DTC would authorize the
Participants to take such action and the Participants would authorize holders
owning through such Participants to take such action or would otherwise act upon
the instruction of such holders. Neither the Company nor the Trustee will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of Exchange Notes by DTC, or for maintaining,
supervising or reviewing any records of DTC relating to such Exchange Notes.
 
    Payments with respect to the principal of, and premium, if any, Liquidated
Damages, if any, and interest on, any Exchange Notes represented by a Global
Exchange Note registered in the name of DTC or its nominee on the applicable
record date will be payable by the Trustee to or at the direction of DTC or its
nominee in its capacity as the registered holder of the Global Exchange Note
representing such Exchange Notes under the Indenture. Under the terms of the
Indenture, the Company and the Trustee may treat the persons in whose names the
Exchange Notes, including the Global Exchange Notes, are registered as the
owners thereof for the purpose of receiving payment thereon and for any and all
other purposes whatsoever. Accordingly, neither the Company nor the Trustee has
or will have any responsibility or liability for the payment of such amounts to
owners of beneficial interests in a Global Exchange Note (including principal,
premium, if any, Liquidated Damages, if any, and interest). Payments by the
Participants and the Indirect Participants to the owners of beneficial interests
in a Global Exchange Note will be governed by standing instructions and
customary industry practice and will be the responsibility of the Participants
or the Indirect Participants and DTC.
 
    Transfers between Participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds. Transfers between
participants in Euroclear or Cedel will be effected in the ordinary way in
accordance with their respective rules and operating procedures.
 
    Subject to compliance with the transfer restrictions applicable to the
Exchange Notes, cross-market transfers between the Participants in DTC, on the
one hand, and Euroclear or Cedel participants, on the other hand, will be
effected through DTC in accordance with DTC's rules on behalf of Euroclear or
Cedel, as the case may be, by its respective depositary; however, such
cross-market transactions will require delivery of instructions to Euroclear or
Cedel, as the case may be, by the counterparty in such system in accordance with
the rules and procedures and within the established deadlines (Brussels time) of
such system. Euroclear or Cedel, as the case may be, will, if the transaction
meets its settlement requirements, deliver instructions to its respective
depositary to take action to effect final settlement on its behalf by delivering
or receiving interests in the relevant Global Exchange Notes in DTC, and making
or receiving payment in accordance with normal procedures for same-day funds
settlement applicable to DTC. Euroclear participants and Cedel participants may
not deliver instructions directly to the depositaries for Euroclear or Cedel.
 
    Because of time zone differences, the securities account of a Euroclear or
Cedel participant purchasing an interest in a Global Exchange Note from a
Participant in DTC will be credited, and any such crediting will be reported to
the relevant Euroclear or Cedel participant, during the securities settlement
processing day (which must be a business day for Euroclear and Cedel)
immediately following the settlement date of DTC. Cash received in Euroclear or
Cedel as a result of sales of interest in a Global Security by or through a
Euroclear or Cedel participant to a Participant in DTC will be received with
value on the settlement date of DTC but will be available in the relevant
Euroclear or Cedel cash account only as of the business day for Euroclear or
Cedel following DTC's settlement date.
 
                                      141
<PAGE>
    Although DTC, Euroclear and Cedel have agreed to the foregoing procedures to
facilitate transfers of interests in the Global Exchange Notes among
participants in DTC, Euroclear and Cedel, they are under no obligation to
perform or to continue to perform such procedures, and such procedures may be
discontinued at any time. Neither the Company nor the Trustee will have any
responsibility for the performance by DTC, Euroclear or Cedel or their
respective participants or indirect participants of their respective obligations
under the rules and procedures governing their operations.
 
CERTIFICATED NOTES
 
    If (i) the Company notifies the Trustee in writing that DTC is no longer
willing or able to act as a depositary or DTC ceases to be registered as a
clearing agency under the Exchange Act and a successor depositary is not
appointed within 90 days of such notice or cessation, (ii) the Company, at its
option, notifies the Trustee in writing that it elects to cause the issuance of
Exchange Notes in definitive form under the Indenture or (iii) upon the
occurrence of certain other events as provided in the Indenture, then, upon
surrender by DTC of the Global Exchange Notes, Certificated Notes will be issued
to each person that DTC identifies as the beneficial owner of the Exchange Notes
represented by the Global Exchange Notes. Upon any such issuance, the Trustee is
required to register such Certificated Notes in the name of such person or
persons (or the nominee of any thereof) and cause the same to be delivered
thereto.
 
    Neither the Company nor the Trustee shall be liable for any delay by DTC or
any Participant or Indirect Participant in identifying the beneficial owners of
the related Exchange Notes and each such person may conclusively rely on, and
shall be protected in relying on, instructions from DTC for all purposes
(including with respect to the registration and delivery, and the respective
principal amounts, of the Exchange Notes to be issued).
 
                                      142
<PAGE>
                              PLAN OF DISTRIBUTION
 
    Each broker-dealer that receives Exchange Notes for its own account pursuant
to the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of Exchange Notes received in exchange for Old Notes
where such Old Notes were acquired as a result of market-making activities or
other trading activities. A broker-dealer may not participate in the Exchange
Offer with respect to Old Notes acquired other than as a result of market-making
activities or other trading activities. To the extent any such broker-dealer
participates in the Exchange Offer and so notifies the Company, or causes the
Company to be so notified in writing, the Company has agreed for a period of 90
days after the date of this Prospectus, it will make this Prospectus, as amended
or supplemented, available to such broker-dealer for use in connection with any
such resale, and will promptly send additional copies of this Prospectus and any
amendment or supplement to this Prospectus to any broker-dealer that requests
such documents in the Letter of Transmittal. In addition, until           , 1998
(90 days after the date of this Prospectus), all dealers effecting transactions
in the Exchange Notes may be required to deliver a prospectus.
 
    The Company will not receive any proceeds from any sale of Exchange Notes by
broker-dealers. Exchange Notes received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the Exchange Notes or a combination of such methods of
resale, at prevailing market prices at the time of resale, at prices related to
such prevailing market prices or at negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer or the purchasers or any such Exchange Notes. Any broker-dealer
that resells Exchange Notes that were received by it for its own account
pursuant to the Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Notes may be deemed to be an "underwriter" within
the meaning of the Securities Act, and any profit on any such resale of Exchange
Notes and any commissions or concessions received by any such persons may be
deemed to be underwriting compensation under the Securities Act. The Letter of
Transmittal states that, by acknowledging that it will deliver and by delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
 
    The Company has agreed to pay all expenses incident to the Exchange Offer
(other than commissions and concessions of any broker-dealers), subject to
certain prescribed limitations, and will indemnify the holders of the Old Notes
against certain liabilities, including certain liabilities that may arise under
the Securities Act.
 
    By its acceptance of the Exchange Offer, any broker-dealer that receives
Exchange Notes pursuant to the Exchange Offer hereby agrees to notify the
Company prior to using the Prospectus in connection with the sale or transfer of
Exchange Notes, and acknowledges and agrees that, upon receipt of notice from
the Company of the happening of any event which makes any statement in the
Prospectus untrue in any material respect or which requires the making of any
changes in the Prospectus in order to make the statements therein not misleading
or which may impose upon the Company disclosure obligations that may have a
material adverse effect on the Company (which notice the Company agrees to
deliver promptly to such broker-dealer), such broker-dealer will suspend use of
the Prospectus until the Company has notified such broker-dealer that delivery
of the Prospectus may resume and has furnished copies of any amendment or
supplement to the Prospectus to such broker-dealer.
 
                                      143
<PAGE>
                                 LEGAL MATTERS
 
    Certain legal matters with respect to the validity of the Exchange Notes
offered hereby will be passed upon for the Company by Simpson Thacher &
Bartlett, New York, New York. A member of Simpson Thacher & Bartlett
beneficially owns shares of Common Stock which represent less than 0.1% of the
Common Stock.
 
                                    EXPERTS
 
    The consolidated financial statements of the Company as of December 31, 1997
and 1996 and for each of the three years in the period ended December 31, 1997,
included in this Prospectus, have been audited by Price Waterhouse LLP,
independent accountants, as stated in their report appearing herein and are
included in reliance upon the report of such firm given upon their authority as
experts in accounting and auditing.
 
                             CHANGE IN ACCOUNTANTS
 
    On April 1, 1998, the Company dismissed its independent accountants, Price
Waterhouse LLP, and replaced them with Deloitte & Touche LLP. There were no
disagreements with Price Waterhouse LLP on any matter of accounting principles,
financial statement disclosure or auditing scope or procedure.
 
                                      144
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
<TABLE>
<CAPTION>
                                                                                                                PAGE
                                                                                                                -----
<S>                                                                                                          <C>
 
FINANCIAL STATEMENTS OF CORNING CONSUMER PRODUCTS COMPANY
 
  Consolidated Financial Statements:
 
    Consolidated Balance Sheets-March 31, 1998 (unaudited)
    and December 31, 1997..................................................................................         F-2
 
    Consolidated Statements of Operations-Three Months Ended
    March 31, 1998 (unaudited) and 1997 (unaudited)........................................................         F-3
 
    Consolidated Statements of Cash Flows-Three Months Ended
    March 31, 1998 (unaudited) and 1997 (unaudited)........................................................         F-4
 
  Report of Independent Accountants........................................................................         F-5
 
  Consolidated Financial Statements:
 
    Consolidated Balance Sheets-December 31, 1997 and 1996.................................................         F-6
 
    Consolidated Statements of Operations-Years Ended
    December 31, 1997, 1996 and 1995.......................................................................         F-7
 
    Consolidated Statements of Cash Flows-Years Ended
    December 31, 1997, 1996 and 1995.......................................................................         F-8
 
    Notes to Consolidated Financial Statements.............................................................         F-9
</TABLE>
 
                                      F-1
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
                          CONSOLIDATED BALANCE SHEETS
 
                             (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                       MARCH 31,    DECEMBER 31,
                                                                                      -----------  --------------
<S>                                                                                   <C>          <C>
                                                                                         1998           1997
                                                                                      -----------  --------------
 
<CAPTION>
                                                                                      (UNAUDITED)
<S>                                                                                   <C>          <C>
ASSETS
Current assets
  Cash and cash equivalents.........................................................   $   7,421    $      4,345
  Accounts receivable, net of allowances of $6,662 and $7,304 at March 31, 1998 and
    December 31, 1997...............................................................      55,267          68,340
  Inventories, net..................................................................     150,430         136,138
  Prepaid expenses and other current assets.........................................       5,249           8,695
  Deferred taxes on income..........................................................       7,799           8,633
                                                                                      -----------  --------------
    TOTAL CURRENT ASSETS............................................................     226,166         226,151
 
Property and equipment, net.........................................................     150,510         153,332
Deferred taxes on income............................................................      29,286          29,273
Goodwill, net of accumulated amortization of $7,090 and $6,663 at March 31, 1998 and
  December 31, 1997.................................................................      59,997          60,424
Other assets........................................................................      16,339          14,464
                                                                                      -----------  --------------
    TOTAL ASSETS....................................................................   $ 482,298    $    483,644
                                                                                      -----------  --------------
                                                                                      -----------  --------------
 
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities
  Accounts payable and accrued expenses.............................................   $  69,587    $     79,153
  Due to Corning Incorporated.......................................................      96,224          87,142
                                                                                      -----------  --------------
    TOTAL CURRENT LIABILITIES.......................................................     165,811         166,295
 
Long-term debt......................................................................       8,285           8,285
Accrued postretirement liability....................................................      60,856          59,641
Other liabilities...................................................................      19,610          18,243
Minority interest in subsidiary company.............................................       1,010           1,046
                                                                                      -----------  --------------
    TOTAL LIABILITIES...............................................................     255,572         253,510
 
COMMITMENTS (NOTE 17)
 
STOCKHOLDER'S EQUITY
Common stock--$0.01 par value; shares authorized-45,000,000;
  shares issued-24,000,000..........................................................         240             240
Contributed capital.................................................................     273,830         273,830
Accumulated deficit.................................................................     (45,720)        (42,138)
Cumulative translation adjustment...................................................      (1,624)         (1,798)
                                                                                      -----------  --------------
    TOTAL STOCKHOLDER'S EQUITY......................................................     226,726         230,134
                                                                                      -----------  --------------
                                                                                      -----------  --------------
    TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY......................................   $ 482,298    $    483,644
                                                                                      -----------  --------------
                                                                                      -----------  --------------
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                      F-2
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
                (DOLLARS IN THOUSANDS, EXCEPT SHARE INFORMATION)
 
<TABLE>
<CAPTION>
                                                                                         THREE MONTHS ENDED
                                                                                   ------------------------------
                                                                                     MARCH 31,       MARCH 31,
                                                                                        1998            1997
                                                                                   --------------  --------------
<S>                                                                                <C>             <C>
                                                                                    (UNAUDITED)     (UNAUDITED)
REVENUES
  Net sales......................................................................  $      116,538  $      128,279
DEDUCTIONS
  Cost of sales..................................................................          77,761          83,653
  Selling, general, administrative and research and development expenses.........          36,693          32,789
  Other corporate administrative expenses........................................        --                 4,602
  Management fees................................................................             437        --
  Goodwill amortization..........................................................             427             427
  Transactions related expenses..................................................           1,384        --
  Other, net.....................................................................             375             355
  Royalty income.................................................................            (226)           (227)
                                                                                   --------------  --------------
  Operating (loss) income........................................................            (313)          6,680
  Interest expense...............................................................           1,574           2,102
                                                                                   --------------  --------------
  (Loss) income before taxes on income...........................................          (1,887)          4,578
  Income tax expense.............................................................           1,731           2,756
                                                                                   --------------  --------------
  (Loss) income before minority interest.........................................          (3,618)          1,822
  Minority interest in earnings (losses) of subsidiary...........................              36             (61)
                                                                                   --------------  --------------
      Net (loss) income..........................................................  $       (3,582) $        1,761
                                                                                   --------------  --------------
                                                                                   --------------  --------------
SHARE INFORMATION
Basic and diluted (loss) earnings per common share...............................  $        (0.15) $         0.07
Weighted average number of common shares outstanding during the period...........      24,000,000      24,000,000
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                      F-3
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
                             (DOLLARS IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                             THREE MONTHS ENDED
                                                                                           ----------------------
                                                                                           MARCH 31,   MARCH 31,
                                                                                              1998        1997
                                                                                           ----------  ----------
<S>                                                                                        <C>         <C>
                                                                                           (UNAUDITED) (UNAUDITED)
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES
  Net (loss) income......................................................................  $   (3,582) $    1,761
  Adjustments to reconcile net (loss) income to net cash provided by
    (used in) operating activities:
  Depreciation and amortization..........................................................       8,989      10,343
  Minority interest in (earnings) losses of subsidiary...................................         (36)         61
  Loss of disposition of plant and equipment.............................................          84         236
  Deferred tax assets....................................................................         821         374
  Provision for postretirement benefits, net of cash paid................................       1,215       1,120
 
Changes in operating assets and liabilities:
  Accounts receivable....................................................................      13,073      17,379
  Inventories............................................................................     (14,292)    (14,899)
  Prepaid expenses and other current assets..............................................       3,446      (1,282)
  Accounts payable and accrued expenses..................................................      (9,566)    (21,925)
  Other liabilities......................................................................       1,367       1,074
                                                                                           ----------  ----------
      Net cash provided by (used in) operating activities................................       1,519      (5,758)
                                                                                           ----------  ----------
CASH FLOWS USED IN INVESTING ACTIVITIES
  Additions to plant and equipment, and other assets.....................................      (7,858)     (4,050)
  Other, net.............................................................................         159        (106)
                                                                                           ----------  ----------
      Net cash used in investing activities..............................................      (7,699)     (4,156)
                                                                                           ----------  ----------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
  Increase in net amounts due to Corning Incorporated....................................       9,082       9,517
                                                                                           ----------  ----------
Effect of exchange rates on cash.........................................................         174        (109)
Net increase (decrease) in cash..........................................................       3,076        (506)
Cash and cash equivalents at beginning of year...........................................       4,345       8,091
                                                                                           ----------  ----------
Cash and cash equivalents at end of period...............................................  $    7,421  $    7,585
                                                                                           ----------  ----------
                                                                                           ----------  ----------
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                   statements
 
                                      F-4
<PAGE>
                                                                          [LOGO]
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Board of Directors and Stockholder of
Corning Consumer Products Company
 
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations and of cash flows present fairly, in all
material respects, the financial position of Corning Consumer Products Company
(the "Company"), a wholly-owned subsidiary of Corning Incorporated, at December
31, 1997 and 1996 and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1997, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
 
Price Waterhouse LLP
New York, New York
 
January 19, 1998
 
                                      F-5
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
                          CONSOLIDATED BALANCE SHEETS
 
                             (DOLLARS IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                                DECEMBER 31,
                                                                                          ------------------------
<S>                                                                                       <C>          <C>
                                                                                             1997         1996
                                                                                          -----------  -----------
ASSETS
Current assets
  Cash and cash equivalents.............................................................  $     4,345  $     8,091
  Accounts receivable, net of allowances of $7,304 and $7,848 at December 31, 1997 and
    December 31, 1996, respectively.....................................................       68,340       80,424
  Inventories, net......................................................................      136,138      134,295
  Prepaid expenses and other current assets.............................................        8,695       10,854
  Deferred taxes on income..............................................................        8,633        9,021
                                                                                          -----------  -----------
    TOTAL CURRENT ASSETS................................................................      226,151      242,685
 
Property and equipment, net.............................................................      153,332      160,912
Deferred taxes on income................................................................       29,273       34,447
Goodwill, net of accumulated amortization of $6,663 and $4,957 at December 31, 1997 and
  December 31, 1996, respectively.......................................................       60,424       62,130
Other assets............................................................................       14,464       16,271
                                                                                          -----------  -----------
    TOTAL ASSETS........................................................................  $   483,644  $   516,445
                                                                                          -----------  -----------
                                                                                          -----------  -----------
 
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities
  Accounts payable and accrued expenses.................................................  $    79,153  $   113,895
  Due to Corning Incorporated...........................................................       87,142       96,650
                                                                                          -----------  -----------
    TOTAL CURRENT LIABILITIES...........................................................      166,295      210,545
 
Long-term debt..........................................................................        8,285       13,474
Accrued postretirement liability........................................................       59,641       56,367
Other liabilities.......................................................................       18,243       17,618
Minority interest in subsidiary company.................................................        1,046          751
                                                                                          -----------  -----------
    TOTAL LIABILITIES...................................................................      253,510      298,755
 
COMMITMENTS (NOTE 17)
 
STOCKHOLDER'S EQUITY
Common stock--$0.01 par value; shares authorized-45,000,000;
  shares issued-24,000,000..............................................................          240          240
Contributed capital.....................................................................      273,830      273,420
Accumulated deficit.....................................................................      (42,138)     (55,176)
Cumulative translation adjustment.......................................................       (1,798)        (794)
                                                                                          -----------  -----------
    TOTAL STOCKHOLDER'S EQUITY..........................................................      230,134      217,690
                                                                                          -----------  -----------
                                                                                          -----------  -----------
    TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY..........................................  $   483,644  $   516,445
                                                                                          -----------  -----------
                                                                                          -----------  -----------
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                      F-6
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
                (DOLLARS IN THOUSANDS, EXCEPT SHARE INFORMATION)
 
<TABLE>
<CAPTION>
                                                                                    YEAR ENDED
                                                                                   DECEMBER 31,
                                                                  ----------------------------------------------
                                                                       1997            1996            1995
                                                                  --------------  --------------  --------------
<S>                                                               <C>             <C>             <C>
REVENUES
  Net sales.....................................................  $      572,860  $      632,406  $      608,720
DEDUCTIONS
  Cost of sales.................................................         376,960         435,867         431,185
  Selling, general, administrative and research and development
    expenses....................................................         137,315         154,159         168,174
  Other corporate administrative expense........................          18,408          20,904          19,994
  Provision for restructuring costs.............................        --                 2,146        --
  Goodwill amortization.........................................           1,706           1,706           1,704
  Other, net....................................................           5,896             569             519
  Royalty income................................................          (1,973)         (1,572)         (1,617)
                                                                  --------------  --------------  --------------
  Operating income (loss).......................................          34,548          18,627         (11,239)
  Interest expense, net.........................................           8,481          10,721           8,755
                                                                  --------------  --------------  --------------
  Income (loss) before taxes on income..........................          26,067           7,906         (19,994)
  Income tax expense (benefit)..................................          12,734           6,181          (1,638)
                                                                  --------------  --------------  --------------
  Income (loss) before minority interest........................          13,333           1,725         (18,356)
  Minority interest in earnings of subsidiary...................            (295)           (105)           (133)
                                                                  --------------  --------------  --------------
      Net income (loss).........................................  $       13,038  $        1,620  $      (18,489)
                                                                  --------------  --------------  --------------
                                                                  --------------  --------------  --------------
SHARE INFORMATION
  Basic and diluted earnings (loss) per common share............  $         0.54  $         0.07  $        (0.77)
  Weighted average number of common shares outstanding during
    the period..................................................      24,000,000      24,000,000      24,000,000
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                      F-7
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
                             (DOLLARS IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                          YEAR ENDED
                                                                                         DECEMBER 31,
                                                                               ---------------------------------
                                                                                 1997        1996        1995
                                                                               ---------  ----------  ----------
<S>                                                                            <C>        <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)..........................................................  $  13,038  $    1,620  $  (18,489)
  Adjustments to reconcile net income (loss) to net cash provided by
    operating activities:
  Depreciation and amortization..............................................     35,706      35,771      31,994
  Minority interest in earnings of subsidiary................................        295         105         133
  Loss on disposition of plant and equipment.................................      1,596       1,570       2,180
  Deferred tax assets........................................................      5,562      (1,511)     (6,995)
  Provision for restructuring costs..........................................     --           2,146      --
  Provision for postretirement benefits, net of cash paid....................      3,274       3,459       3,844
 
  Changes in operating assets and liabilities:
  Accounts receivable........................................................     12,084      16,100       5,683
  Inventories................................................................     (1,843)     (5,839)      2,881
  Prepaid expenses and other current assets..................................      2,159       3,938       3,912
  Accounts payable and accrued expenses......................................     (4,072)     (8,938)    (16,133)
  Payable due to Corning.....................................................    (30,670)      1,012      (7,342)
  Other liabilities..........................................................        624       7,531        (666)
                                                                               ---------  ----------  ----------
      Net cash provided by operating activities..............................     37,753      56,964       1,002
                                                                               ---------  ----------  ----------
CASH FLOWS FROM INVESTING ACTIVITIES
  Additions to plant and equipment, and other assets.........................    (28,600)    (35,827)    (40,632)
  Acquisition of business....................................................     --          --          (1,600)
  Other, net.................................................................      2,392         198        (640)
                                                                               ---------  ----------  ----------
      Net cash used in investing activities..................................    (26,208)    (35,629)    (42,872)
                                                                               ---------  ----------  ----------
CASH FLOWS FROM FINANCING ACTIVITIES
  Repayment of long-term debt................................................     (5,189)       (511)     (3,906)
  Increase (decrease) in net amounts due to Corning Incorporated.............     (9,508)    (23,001)     46,600
  Capital contribution by shareholder........................................        410      --          --
                                                                               ---------  ----------  ----------
      Net cash provided by (used in) financing activities....................    (14,287)    (23,512)     42,694
                                                                               ---------  ----------  ----------
Effect of accounting calendar change on cash.................................     --            (205)     --
Effect of exchange rates on cash.............................................     (1,004)       (386)         84
                                                                               ---------  ----------  ----------
Net change in cash...........................................................     (3,746)     (2,768)        908
Cash and cash equivalents at beginning of year...............................      8,091      10,859       9,951
                                                                               ---------  ----------  ----------
Cash and cash equivalents at end of period...................................  $   4,345  $    8,091  $   10,859
                                                                               ---------  ----------  ----------
                                                                               ---------  ----------  ----------
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                      F-8
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
               (DOLLARS IN THOUSANDS, UNLESS OTHERWISE INDICATED)
 
    (ALL AMOUNTS AS OF AND FOR THE PERIODS ENDED MARCH 31, 1998 AND 1997 ARE
                                   UNAUDITED)
 
1. BASIS OF PRESENTATION
 
  The consolidated financial statements present the financial position, results
  of operations and cash flows of Corning Consumer Products Company ("CCP"), a
  wholly-owned subsidiary of Corning Incorporated ("Corning").
 
  CCP's business includes the manufacture and sale of oven bakeware, dinnerware,
  and rangetop cookware. The Company's brands include Corning Ware-Registered
  Trademark-, Pyrex-Registered Trademark-, Corelle-Registered Trademark-, Revere
  Ware-Registered Trademark-, and Visions-Registered Trademark-. CCP sells its
  products in both wholesale and retail markets principally in the United
  States, and has significant presence in certain international markets,
  primarily Canada, Asia, Australia, and Latin America. CCP has four domestic
  manufacturing facilities and operates a decorating facility in Malaysia and
  packaging and distribution facilities in Canada, Singapore, Australia, and
  Brazil.
 
  The accompanying unaudited interim consolidated financial statements contain
  all adjustments, consisting only of normal recurring adjustments, which in the
  opinion of management are necessary for a fair presentation of the results for
  the interim periods. Results for the interim periods are not necessarily
  indicative of results for the full year.
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  The consolidated financial statements were prepared in accordance with
  generally accepted accounting principles, the most significant of which
  include:
 
  PRINCIPLES OF CONSOLIDATION
 
  The consolidated financial statements include the accounts of all entities
  currently controlled by CCP. All significant intercompany accounts and
  transactions are eliminated. Prior to January 1, 1996, CCP operated on a
  fiscal year ending on the Sunday nearest December 31. Certain subsidiaries of
  CCP were consolidated at dates up to one month earlier than the consolidated
  financial statements. Effective January 1, 1996, CCP prospectively adopted a
  calendar year accounting calendar and began consolidating results of all
  subsidiaries currently.
 
  USE OF ESTIMATES
 
  The preparation of financial statements in conformity with generally accepted
  accounting principles requires management to make estimates and assumptions
  that affect the reported amounts of assets and liabilities and disclosure of
  contingent assets and liabilities at the date of the financial statements and
  the reported amounts of revenues and expenses during the reporting period.
  Actual results could differ from those estimates.
 
  TRANSLATION OF FOREIGN CURRENCIES
 
  Balance sheet accounts of foreign subsidiaries are translated at current
  exchange rates and income statement accounts are translated at average
  exchange rates for the year. Translation gains and losses are accumulated in a
  separate component of stockholder's equity. Foreign currency transaction gains
  and losses are included in current earnings.
 
                                      F-9
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
               (DOLLARS IN THOUSANDS, UNLESS OTHERWISE INDICATED)
 
    (ALL AMOUNTS AS OF AND FOR THE PERIODS ENDED MARCH 31, 1998 AND 1997 ARE
                                   UNAUDITED)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  CASH EQUIVALENTS
 
  Cash equivalents consist of government securities with original maturities of
  three months or less.
 
  INVENTORIES
 
  Inventories are stated at the lower of cost or market. Approximately 77%, 84%
  and 84% of CCP's inventories at March 31, 1998, December 31, 1997 and 1996,
  respectively, are valued using the LIFO (last-in, first-out) method of
  determining cost. The FIFO (first-in, first-out) method is used to value the
  remaining inventories which consist of supply inventories and inventories at
  certain subsidiaries.
 
  PROPERTY AND EQUIPMENT
 
  Property and equipment are recorded at cost. Depreciation is calculated using
  straight-line and accelerated methods based on the estimated useful lives of
  the assets as follows: buildings, 8-30 years; equipment, 3-25 years; and
  leasehold improvements, over the lease periods. Precious metals are recorded
  at cost and consist of platinum, rhodium and palladium. They are used in CCP's
  manufacturing processes and are expensed to operations based on utilization.
 
  GOODWILL AND OTHER ASSETS
 
  The amortization period assigned to the goodwill is 40 years. Trademarks and
  other assets are amortized using the straight-line method over the estimated
  economic useful life of the assets which range from 3 to 32.5 years.
 
  IMPAIRMENT ACCOUNTING
 
  CCP reviews the recoverability of its long-lived assets, including goodwill
  and other intangible assets, when events or changes in circumstances occur
  that indicate that the carrying value of the asset may not be recoverable. The
  assessment of possible impairment is based on CCP's ability to recover the
  asset from the expected future pre-tax cash flows (undiscounted and without
  interest charges) of the related operations. If the expected undiscounted
  pre-tax cash flows are less than the carrying value of such asset, an
  impairment loss is recognized for the difference between estimated fair value
  and carrying value. The assessment of impairment requires management to make
  estimates of expected future cash flows related to long-lived assets. It is at
  least reasonably possible that future events or circumstances could cause
  these estimates to change.
 
  STOCK-BASED COMPENSATION
 
  Certain employees of CCP participate in the stock compensation plans of
  Corning. CCP accounts for compensation cost under these plans using the
  intrinsic value method of accounting prescribed by Accounting Principles Board
  Opinion No. 25 "Accounting for Stock Issued to Employees." Compensation
  expense is recorded for awards of shares over the period earned. During 1996,
  the Company adopted the disclosure provisions of Statement of Financial
  Accounting Standards No. 123 "Accounting for Stock-Based Compensation" ("FAS
  123") which defines a fair value-based method of accounting for stock-based
  compensation.
 
                                      F-10
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
               (DOLLARS IN THOUSANDS, UNLESS OTHERWISE INDICATED)
 
    (ALL AMOUNTS AS OF AND FOR THE PERIODS ENDED MARCH 31, 1998 AND 1997 ARE
                                   UNAUDITED)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  ADVERTISING AND PROMOTION COSTS
 
  During interim periods, CCP records charges for advertising and promotion to
  operations ratably in relation to revenues. These costs are adjusted annually
  at year end to reflect actual charges incurred.
 
  INCOME TAXES
 
  CCP uses the asset and liability approach to account for income taxes. Under
  this method, deferred tax assets and liabilities are recognized for the
  expected future tax consequences of differences between the carrying amounts
  of assets and liabilities and their respective tax bases using enacted tax
  rates in effect for the year in which the differences are expected to reverse.
  The effect on deferred tax assets and liabilities of a change in tax rates is
  recognized in income in the period when the change is enacted. A valuation
  allowance for deferred tax assets is provided when it is more likely than not
  the deferred tax asset will not be realized.
 
  EARNINGS PER SHARE
 
  Basic and diluted earnings (loss) per common share is calculated by dividing
  net income by the weighted average number of common shares outstanding during
  the period.
 
3. SIGNIFICANT CUSTOMERS
 
  Approximately 21% of CCP's net sales during the year ended December 31, 1997
  were to two customers, each of which individually accounted for 15% and 6% of
  net sales. In comparison, approximately 20% of net sales for the years ended
  December 31, 1996 and 1995 were to these two customers, individually
  accounting for 13% and 7% of net sales, respectively. The aggregate accounts
  receivable balance at December 31, 1997 and 1996 related to these customers
  was approximately $22.0 million at each year end.
 
4. INVENTORIES
 
<TABLE>
<CAPTION>
                                                   MARCH 31,       DECEMBER 31,
                                                  -----------  --------------------
                                                     1998        1997       1996
                                                  -----------  ---------  ---------
                                                  (UNAUDITED)
<S>                                               <C>          <C>        <C>
Finished goods..................................   $  69,417   $  62,434  $  57,906
Work in process.................................      61,455      56,684     52,208
Raw materials...................................       7,024       5,030      9,363
Supplies and packing materials..................      13,643      14,100     14,452
                                                  -----------  ---------  ---------
Total inventories...............................     151,539     138,248    133,929
(Decrease) increase to LIFO valuation...........      (1,109)     (2,110)       366
                                                  -----------  ---------  ---------
                                                   $ 150,430   $ 136,138  $ 134,295
                                                  -----------  ---------  ---------
                                                  -----------  ---------  ---------
</TABLE>
 
                                      F-11
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
               (DOLLARS IN THOUSANDS, UNLESS OTHERWISE INDICATED)
 
    (ALL AMOUNTS AS OF AND FOR THE PERIODS ENDED MARCH 31, 1998 AND 1997 ARE
                                   UNAUDITED)
 
5. PROPERTY AND EQUIPMENT
 
<TABLE>
<CAPTION>
                                                   MARCH 31,       DECEMBER 31,
                                                  -----------  --------------------
                                                     1998        1997       1996
                                                  -----------  ---------  ---------
                                                  (UNAUDITED)
<S>                                               <C>          <C>        <C>
Land............................................   $   2,453   $   2,453  $   2,453
Buildings.......................................      59,921      57,941     54,810
Equipment.......................................     238,111     230,428    206,177
Leasehold improvements..........................      11,641      11,547     13,141
Precious metals.................................      11,978      11,990     14,810
                                                  -----------  ---------  ---------
                                                     324,104     314,359    291,391
Accumulated depreciation and related accumulated
  amortization..................................    (173,594)   (161,027)  (130,479)
                                                  -----------  ---------  ---------
                                                  -----------  ---------  ---------
                                                   $ 150,510   $ 153,332  $ 160,912
                                                  -----------  ---------  ---------
                                                  -----------  ---------  ---------
</TABLE>
 
  Depreciation and related amortization expense for the years ended December 31,
  1997, 1996 and 1995 was $30.4 million, $30.5 million and $27.9 million,
  respectively.
 
6. OTHER ASSETS
 
<TABLE>
<CAPTION>
                                                      MARCH 31,       DECEMBER 31,
                                                     -----------  --------------------
                                                        1998        1997       1996
                                                     -----------  ---------  ---------
                                                     (UNAUDITED)
<S>                                                  <C>          <C>        <C>
Trademarks.........................................   $   8,600   $   8,682  $   9,009
Computer software..................................       7,605       5,708      7,262
Other..............................................         134          74     --
                                                     -----------  ---------  ---------
                                                      $  16,339   $  14,464  $  16,271
                                                     -----------  ---------  ---------
                                                     -----------  ---------  ---------
</TABLE>
 
  Amortization expense related to these assets for the years ended December 31,
  1997, 1996 and 1995 was $3.6 million, $3.6 million and $2.4 million,
  respectively.
 
                                      F-12
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
               (DOLLARS IN THOUSANDS, UNLESS OTHERWISE INDICATED)
 
    (ALL AMOUNTS AS OF AND FOR THE PERIODS ENDED MARCH 31, 1998 AND 1997 ARE
                                   UNAUDITED)
 
7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
<TABLE>
<CAPTION>
                                                                 MARCH 31,         DECEMBER 31,
                                                                ------------  ----------------------
<S>                                                             <C>           <C>        <C>
                                                                    1998        1997        1996
                                                                ------------  ---------  -----------
 
<CAPTION>
                                                                (UNAUDITED)
<S>                                                             <C>           <C>        <C>
Trade accounts payable........................................   $   24,566   $  16,691  $    16,459
Payable due to Corning........................................        8,813      11,431       42,101
Wages and employee benefits...................................       12,288      22,652       17,293
Accrued advertising and promotion.............................        5,777      11,078       15,039
Taxes on income...............................................        1,777       3,189        3,874
Current portion of long-term debt.............................        1,894       2,022          458
Other accrued expenses........................................       14,472      12,090       18,671
                                                                ------------  ---------  -----------
                                                                 $   69,587   $  79,153  $   113,895
                                                                ------------  ---------  -----------
                                                                ------------  ---------  -----------
</TABLE>
 
  Payable due to Corning relates to amounts paid by Corning on CCP's behalf.
 
8. COMPREHENSIVE INCOME
 
  As of January 1, 1998, CCP implemented SFAS No. 130 "Reporting Comprehensive
  Income". This pronouncement, which is solely a financial statement
  presentation standard, requires CCP to disclose non-owner changes included in
  equity but not included in net earnings. Comprehensive income was computed as
  follows:
 
<TABLE>
<CAPTION>
                                                    THREE MONTHS ENDED
                                                        MARCH 31,                    YEARS ENDED
                                                 ------------------------            DECEMBER 31,
                                                    1998         1997      --------------------------------
                                                 (UNAUDITED)  (UNAUDITED)    1997       1996        1995
                                                 -----------  -----------  ---------  ---------  ----------
<S>                                              <C>          <C>          <C>        <C>        <C>
Net (loss) income..............................   $  (3,582)   $   1,761   $  13,038  $   1,620  $  (18,489)
Foreign currency translation adjustments.......         174         (109)     (1,004)       218         (84)
                                                 -----------  -----------  ---------  ---------  ----------
Comprehensive income...........................   $  (3,408)   $   1,652   $  12,034  $   1,838  $  (18,573)
                                                 -----------  -----------  ---------  ---------  ----------
                                                 -----------  -----------  ---------  ---------  ----------
</TABLE>
 
                                      F-13
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
               (DOLLARS IN THOUSANDS, UNLESS OTHERWISE INDICATED)
 
    (ALL AMOUNTS AS OF AND FOR THE PERIODS ENDED MARCH 31, 1998 AND 1997 ARE
                                   UNAUDITED)
 
9. RELATED PARTY TRANSACTIONS
 
  The following transactions with Corning are included in the consolidated
  statements of operations for the three months ended March 31, 1998 and 1997
  and the years ended December 31, 1997,1996 and 1995.
<TABLE>
<CAPTION>
                                                        MARCH 31,
                                                --------------------------
<S>                                             <C>           <C>           <C>        <C>        <C>
                                                    1998          1997        1997       1996        1995
                                                ------------  ------------  ---------  ---------  -----------
 
<CAPTION>
                                                (UNAUDITED)   (UNAUDITED)
<S>                                             <C>           <C>           <C>        <C>        <C>
Commission (income)/expense, net..............   $       (2)   $      226   $     731  $     622  $       262
Interest income...............................           48           379         323      1,313        1,668
Interest expense..............................        1,622         2,481       7,833     11,778       10,252
Centralized services..........................        3,036         4,800      19,201     19,454       17,831
Other corporate administrative expense........       --             4,602      18,408     20,904       19,994
Management fees...............................          437        --          --         --          --
</TABLE>
 
  Sales are made by CCP to certain Corning subsidiaries which subsequently
  resell the products to third parties. CCP pays these subsidiaries a sales
  commission for sales made on CCP's behalf. Corning utilizes the CCP Canada
  operations as a sales office and pays commissions on Corning sales generated.
 
  Amounts due to and from Corning as a result of the above and other
  transactions bear interest at a rate of 30-day LIBOR plus 3/8%. See Note 12.
 
  Certain administrative and operating functions are centralized within Corning.
  These services include finance support, information services, risk management,
  purchasing and transportation, administration of benefit plans and engineering
  services. These functions are charged to CCP using methods deemed appropriate
  for the nature of the expenses involved and consistent with charges to other
  Corning subsidiaries. The methods utilize various allocation bases such as the
  number of employees and related payroll costs, and direct effort expended.
  These costs are included in cost of sales and selling, general and
  administrative expenses. The centralized functions provided by Corning to CCP
  as well as corporate center costs are charged out under a transition service
  agreement at a rate agreed upon by the management of CCP and consistent with
  other Corning businesses. Management believes that the methodology used to
  allocate the costs is reasonable, but may not necessarily be indicative of the
  costs that would have been incurred had these functions been performed by CCP.
 
  Other corporate administrative expense related to certain corporate center
  costs such as administrative, tax, treasury, and technical support provided by
  Corning to CCP charged out under a service agreement at an overall rate agreed
  upon by the management of CCP. In 1998 these services are charged out under a
  new transition service agreement and are included in selling, general and
  administrative expenses. In addition, CCP paid Corning $437 of management fees
  in the first quarter of 1998 relating to certain corporate governance
  services.
 
  Trade payables and debt obligations due to Corning are disclosed in Notes 7
  and 12, respectively. CCP employees participate in Corning employee retirement
  and stock compensation plans.
 
                                      F-14
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
               (DOLLARS IN THOUSANDS, UNLESS OTHERWISE INDICATED)
 
    (ALL AMOUNTS AS OF AND FOR THE PERIODS ENDED MARCH 31, 1998 AND 1997 ARE
                                   UNAUDITED)
 
9. RELATED PARTY TRANSACTIONS (CONTINUED)
  CCP participates in Corning's centralized treasury and cash management
  processes. However, cash collected and disbursed for operations flow through
  CCP's own bank accounts. CCP cash operations are administered by Corning. The
  cash balance reported in the balance sheet is comprised primarily of cash
  maintained by foreign subsidiaries of CCP.
 
10. EMPLOYEE RETIREMENT PLANS
 
  PENSION BENEFITS
 
  The majority of CCP's U.S. workforce participates in Corning's employee
  benefit plans, including Corning's North American defined-benefit pension plan
  (the "Plan"). At the formation of CCP, CCP assumed the liability for pensions
  to be earned after January 4, 1993, by its then current workforce and began to
  make contributions to the Plan. The pension liability earned prior to the
  formation of CCP by both current and retired employees was retained by
  Corning. Under the plan agreement, assets of the entire plan are available to
  fund the CCP liability.
 
  CCP also has defined-benefit pension plans for its employees at certain
  wholly-owned subsidiaries.
 
  CCP's funding policy is to contribute annually an amount determined jointly by
  management and its consulting actuaries, which provides for the current cost
  and amortization of prior service cost over a 30-year period.
 
  The funded status of CCP's pension plans is as follows:
 
<TABLE>
<CAPTION>
                                                                             DECEMBER 31,
                                                                         --------------------
<S>                                                                      <C>        <C>
                                                                           1997       1996
                                                                         ---------  ---------
Vested benefits........................................................  $  45,304  $  41,516
Non-vested benefits....................................................      8,812      7,860
                                                                         ---------  ---------
Accumulated benefit obligation.........................................  $  54,116  $  49,376
                                                                         ---------  ---------
                                                                         ---------  ---------
Present value of projected benefit obligation..........................  $  56,494  $  51,213
Current fair market value of plan assets...............................    (35,711)   (29,820)
Unrecognized prior service costs.......................................     (9,343)   (10,407)
Unrecognized net losses from changes in actuarial assumptions..........     (4,927)    (4,927)
Other unrecognized net experience gains................................     11,626     11,927
                                                                         ---------  ---------
Recorded pension liability.............................................  $  18,139  $  17,986
                                                                         ---------  ---------
                                                                         ---------  ---------
</TABLE>
 
  Plan assets are comprised principally of publicly traded debt and equity
  securities. Corning common stock represented 3.1% and 7.7% of plan assets at
  December 31, 1997 and 1996, respectively.
 
  The unrecognized prior service cost, net gains and losses from changes in
  actuarial assumptions and net experience gains are deferred and amortized to
  pension expense over the remaining service life of plan participants, if they
  exceed certain limits.
 
                                      F-15
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
               (DOLLARS IN THOUSANDS, UNLESS OTHERWISE INDICATED)
 
    (ALL AMOUNTS AS OF AND FOR THE PERIODS ENDED MARCH 31, 1998 AND 1997 ARE
                                   UNAUDITED)
 
10. EMPLOYEE RETIREMENT PLANS (CONTINUED)
  The components of pension expense for CCP's defined-benefit pension plans for
  the years ended December 31, 1997, 1996 and 1995 were as follows:
 
<TABLE>
<CAPTION>
                                                                   1997       1996       1995
                                                                 ---------  ---------  ---------
<S>                                                              <C>        <C>        <C>
Present value of benefits earned during the year...............  $   3,411  $   4,780  $   3,282
Interest cost on projected benefit obligation..................      3,604      3,150      2,454
Actual return on plan assets...................................     (2,464)    (1,843)    (3,424)
Net amortization and deferral..................................        773        619        478
                                                                 ---------  ---------  ---------
Net pension expense............................................  $   5,324  $   6,706  $   2,790
                                                                 ---------  ---------  ---------
                                                                 ---------  ---------  ---------
</TABLE>
 
  Measurement of pension expense is based on assumptions used to value the
  pension liability at the beginning of the year.
 
  Total consolidated pension expense, including defined contribution pension
  plans for the years ended December 31, 1997, 1996 and 1995, was $8.1 million,
  $9.8 million, and $5.5 million, respectively.
 
  For CCP's defined benefit plans, the assumed discount rate and rate of
  increase in future compensation levels used in determining the actuarial
  present value of the projected benefit obligation were 7.5% and 4.5%,
  respectively, for each of the years ended December 31, 1997 and 1996. The
  expected long-term rate of return on plan assets was 9%.
 
  POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS
 
  At the formation of CCP, CCP assumed the liability for all postretirement
  benefit costs related to its then current workforce. The postretirement
  liability related to retirees at January 1, 1993 was retained by Corning
  Incorporated.
 
  The consolidated postretirement benefit obligation attributable to CCP's
  workforce is determined by application of the terms of health care and life
  insurance plans, together with relevant actuarial assumptions and health care
  cost trend rates. The discount rate used in determining the accumulated
  postretirement benefit obligation was 7.5% in 1997 and 1996. The health care
  cost trend rate for CCP's principal plan is assumed to be 9% in 1997 for
  covered individuals under age 65 decreasing gradually to 5% in 2010 and
  thereafter. For covered individuals over age 65, the rate is assumed to be 8%
  in 1997 decreasing gradually to 5% in 2010 and thereafter. The effect of a 1%
  annual increase in the assumed health care cost trend rates would increase the
  accumulated postretirement benefit as of December 31, 1997, by approximately
  $4.2 million and the annual net periodic postretirement benefit expense by
  approximately $0.4 million.
 
                                      F-16
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
               (DOLLARS IN THOUSANDS, UNLESS OTHERWISE INDICATED)
 
    (ALL AMOUNTS AS OF AND FOR THE PERIODS ENDED MARCH 31, 1998 AND 1997 ARE
                                   UNAUDITED)
 
10. EMPLOYEE RETIREMENT PLANS (CONTINUED)
  CCP's accrued postretirement liability at December 31, 1997 and 1996 was
  comprised of the following:
 
<TABLE>
<CAPTION>
                                                                                   DECEMBER 31,
                                                                               --------------------
<S>                                                                            <C>        <C>
                                                                                 1997       1996
                                                                               ---------  ---------
Accumulated postretirement benefit obligation:
  Retirees...................................................................  $  26,883  $  19,257
  Fully eligible active plan participants....................................      8,552     10,037
  Other active plan participants.............................................     22,359     23,842
                                                                               ---------  ---------
                                                                                  57,794     53,136
Unrecognized gain from plan amendments.......................................        193      1,705
Other unrecognized net experience gains......................................      1,654      1,526
                                                                               ---------  ---------
Accrued postretirement liability.............................................  $  59,641  $  56,367
                                                                               ---------  ---------
                                                                               ---------  ---------
</TABLE>
 
  CCP has not funded these obligations.
 
  The components of net periodic postretirement benefit were as follows:
 
<TABLE>
<CAPTION>
                                                                                  YEAR ENDED
                                                                                 DECEMBER 31,
                                                                        -------------------------------
<S>                                                                     <C>        <C>        <C>
                                                                          1997       1996       1995
                                                                        ---------  ---------  ---------
Present value of benefits earned during the year......................  $   2,041  $   2,092  $   1,973
Interest cost on the accumulated postretirement benefit obligation....      3,464      3,343      3,163
Net amortization......................................................       (215)      (214)      (409)
                                                                        ---------  ---------  ---------
Net periodic postretirement benefit expense...........................  $   5,290  $   5,221  $   4,727
                                                                        ---------  ---------  ---------
                                                                        ---------  ---------  ---------
</TABLE>
 
11. STOCK COMPENSATION PLANS
 
   Certain employees of CCP participate in the stock compensation plans of
   Corning. Under Corning's stock option plan, non qualified and incentive stock
   options to purchase unissued Corning shares at the market price on the date
   of grant generally become exercisable in installments from one to two years
   from the grant date, except for a grant in December 1995 which becomes
   exercisable in installments from four to five years from that grant date. The
   maximum term of non qualified and incentive stock options issued by Corning
   is generally 10 years from the grant date.
 
   At December 31, 1997, CCP employees held options to acquire 351,000 shares of
   Corning common stock at exercise prices ranging from $14.95 per share to
   $54.81 per share. These outstanding options had a weighted-average exercise
   price of $28.50 per share and weighted-average remaining contractual life of
   7.1 years at December 31, 1997. Of these outstanding options, at December 31,
   1997, 173,000 represented vested options with a weighted-average exercise
   price of $27.00 per share.
 
                                      F-17
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
               (DOLLARS IN THOUSANDS, UNLESS OTHERWISE INDICATED)
 
    (ALL AMOUNTS AS OF AND FOR THE PERIODS ENDED MARCH 31, 1998 AND 1997 ARE
                                   UNAUDITED)
 
11. STOCK COMPENSATION PLANS (CONTINUED)
   The number and exercise price of all Corning options outstanding were
   adjusted for the distributions of certain Corning subsidiaries at December
   31, 1996. This adjustment increased the number of Corning options outstanding
   and held by CCP employees by approximately 69,000 and decreased the exercise
   price of the options by approximately 18%.
 
   Certain employees of CCP were granted 38,000, 38,000 and 153,000 Corning
   options in the years ended December 31, 1997, 1996 and 1995, respectively.
   The weighted-average exercise price of option grants in the years ended
   December 31, 1997, 1996 and 1995 were $42.08, $34.44 and $31.40,
   respectively. CCP employees exercised 80,400, 17,100 and 3,300 Corning
   options in the years ended December 31, 1997, 1996 and 1995, respectively.
   The weighted-average exercise prices of these exercises in the years ended
   December 31, 1997, 1996 and 1995 were $24.25, $23.00 and $12.35,
   respectively.
 
   Under Corning's incentive stock plans, stock grants are made to certain
   employees of CCP, either determined by specific performance goals or issued
   directly, in most instances subject to the possibility of forfeiture and
   without cash consideration. In the years ended December 31, 1997, 1996 and
   1995 grants of 26,500, 23,625 and 69,150 shares, respectively, were made
   under these plans. The weighted-average grant date fair value of grants was
   $35.32, $33.20, and $29.30 per share in 1997, 1996 and 1995, respectively. At
   December 31, 1997 the unamortized cost of prior stock grants amounted to
   approximately $1.7 million.
 
   The costs related to the above plans have been allocated to CCP by Corning
   within the other corporate administrative expense described in Note 8.
 
   In addition to the stock option plan and incentive stock plans, Corning has
   an employee stock purchase plan ("ESPP"), in which certain employees of CCP
   participate. Under the ESPP, certain employees of CCP can elect to have up to
   10% of their annual wages withheld to purchase Corning common stock. The
   purchase price of the stock is 85% of the lower of the beginning-of-quarter
   or end-of-quarter market price.
 
   If CCP had accounted for compensation cost under the provisions of FAS 123,
   the pro forma net income (loss) would have been $12.5 million, $1.4 million
   and ($18.6 million.) in 1997, 1996 and 1995, respectively. The pro forma
   effect of accounting for such costs using the fair value method of FAS 123
   may not be representative of the effect in future years.
 
   Under FAS 123, the weighted-average fair values of options granted in the
   years ended December 31, 1997, 1996 and 1995 were $13.60, $10.77 and $9.17
   per share, respectively. For purposes of determining fair value at the grant
   date, the Black-Scholes option pricing model was used with the following
   weighted-average assumptions for grants in the years ended December 31, 1997,
   1996 and 1995, respectively: risk free interest rate of 6.6%, 6.6% and 5.7%;
   dividend yield of 1.6%, 2.3% and 2.3%; expected volatility of 24.5%, 25% and
   25%; and expected life of 6, 7 and 7 years.
 
                                      F-18
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
               (DOLLARS IN THOUSANDS, UNLESS OTHERWISE INDICATED)
 
    (ALL AMOUNTS AS OF AND FOR THE PERIODS ENDED MARCH 31, 1998 AND 1997 ARE
                                   UNAUDITED)
 
12. BORROWINGS
 
   At March 31, 1998 and December 31, 1997, CCP had outstanding certain
   industrial development bonds bearing interest at an average rate of 3.4% per
   annum and 4.0% per annum, respectively. The bonds mature on various dates
   through 2005 and at March 31, 1998, December 31, 1997 and December 31, 1996
   had an aggregate outstanding balance of $10.2 million, $10.3 million and
   $13.9 million, respectively.
 
   Long-term debt maturing in each of the years subsequent to December 31, 1997
   is as follows:
 
<TABLE>
<S>                                                                 <C>
1998 calendar year................................................  $   2,022
1999 calendar year................................................      2,029
2000 calendar year................................................        545
2001 calendar year................................................        563
2002 calendar year................................................        579
2003-2005.........................................................      4,569
                                                                    ---------
                                                                    $  10,307
Less: current maturities..........................................     (2,022)
                                                                    ---------
                                                                    $   8,285
                                                                    ---------
                                                                    ---------
</TABLE>
 
   In March 1997, CCP consolidated certain outstanding notes and debentures,
   which had previously been allocated to CCP by Corning. The notes and
   debentures were combined into CCP's revolving credit agreement which was
   increased to provide for borrowings of up to $200 million at a rate of 30-day
   LIBOR plus 3/8% due on demand. At March 31, 1998 and December 31, 1997 the
   aggregate amount of intercompany debt outstanding was $96.2 million and $87.1
   million, respectively.
 
   The fair market value of CCP's borrowings is not significantly different from
   its carrying value.
 
13. INCOME TAXES
 
   CCP is included in the consolidated federal income tax return filed by
   Corning. CCP and its subsidiaries have a tax sharing arrangement with Corning
   pursuant to which they are required to compute their provision for income
   taxes on a separate return (i.e., subconsolidation) basis and pay to, or
   receive from, Corning the separate U.S. federal income tax return liability
   or benefit so computed, if any.
 
                                      F-19
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
               (DOLLARS IN THOUSANDS, UNLESS OTHERWISE INDICATED)
 
    (ALL AMOUNTS AS OF AND FOR THE PERIODS ENDED MARCH 31, 1998 AND 1997 ARE
                                   UNAUDITED)
 
13. INCOME TAXES (CONTINUED)
   The Company's tax accounts have been prepared on a separate company basis and
   do not necessarily reflect the Company's actual tax position as determined on
   a consolidated basis with Corning.
 
<TABLE>
<CAPTION>
                                 THREE MONTHS ENDED               YEAR ENDED
                                     MARCH 31,                   DECEMBER 31,
                              ------------------------  -------------------------------
                                 1998         1997        1997       1996       1995
                              -----------  -----------  ---------  ---------  ---------
                              (UNAUDITED)  (UNAUDITED)
<S>                           <C>          <C>          <C>        <C>        <C>
INCOME (LOSS) BEFORE TAXES:
U.S. companies..............   $  (1,817)       1,473   $  14,827  $  (4,627) $ (30,794)
Non-U.S. companies..........         (70)       3,105      11,240     12,533     10,800
                              -----------  -----------  ---------  ---------  ---------
Income (loss) before
  taxes.....................   $  (1,887)   $   4,578   $  26,067  $   7,906  $ (19,994)
                              -----------  -----------  ---------  ---------  ---------
                              -----------  -----------  ---------  ---------  ---------
</TABLE>
 
   The income tax provision at the effective rate differs from the income tax
   provision at the U.S. federal statutory tax rate in effect during the years
   ended December 31, 1997, 1996 and 1995 for the following reasons:
 
<TABLE>
<CAPTION>
                                                                    1997        1996       1995
                                                                  ---------  ----------  ---------
<S>                                                               <C>        <C>         <C>
EFFECTIVE TAX RATE RECONCILIATION:
Taxes at U.S. statutory tax rate................................  $   9,123  $    2,767  $  (7,034)
State taxes, net of federal benefit.............................      3,998        (172)      (655)
Higher taxes on subsidiary earnings.............................      2,775       2,954      4,582
Other...........................................................     (3,162)        632      1,469
                                                                  ---------  ----------  ---------
Income tax expense (benefit)....................................  $  12,734  $    6,181  $  (1,638)
                                                                  ---------  ----------  ---------
                                                                  ---------  ----------  ---------
</TABLE>
 
<TABLE>
<CAPTION>
                                                                YEAR ENDED
                                                               DECEMBER 31,
                                                      -------------------------------
                                                        1997       1996       1995
                                                      ---------  ---------  ---------
<S>                                                   <C>        <C>        <C>
CURRENT AND DEFERRED TAX EXPENSE (BENEFIT):.........
  Current:
    U.S.............................................  $   3,859  $     222  $   1,499
    State and municipal.............................      2,996      2,909       (838)
    Foreign.........................................      4,122      4,159      3,625
  Deferred:
    U.S.............................................         42      1,595     (4,827)
    State and municipal.............................      1,574     (3,061)      (983)
    Foreign.........................................        141        357       (114)
                                                      ---------  ---------  ---------
  Net tax expense (benefit).........................  $  12,734  $   6,181  $  (1,638)
                                                      ---------  ---------  ---------
                                                      ---------  ---------  ---------
</TABLE>
 
                                      F-20
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
               (DOLLARS IN THOUSANDS, UNLESS OTHERWISE INDICATED)
 
    (ALL AMOUNTS AS OF AND FOR THE PERIODS ENDED MARCH 31, 1998 AND 1997 ARE
                                   UNAUDITED)
 
13. INCOME TAXES (CONTINUED)
   The tax effects of temporary differences and carryforwards that give rise to
   significant portions of the deferred tax assets and liabilities at March 31,
   1998, December 31, 1997 and 1996 are comprised of the following:
<TABLE>
<CAPTION>
                                                                 MARCH 31,        DECEMBER 31,
                                                                ------------  --------------------
<S>                                                             <C>           <C>        <C>
                                                                    1998        1997       1996
                                                                ------------  ---------  ---------
 
<CAPTION>
                                                                (UNAUDITED)
<S>                                                             <C>           <C>        <C>
Postretirement, pension and other employee benefits              $   36,725   $  34,957  $  34,048
Loss and tax credit carryforwards                                    22,705      22,871     21,549
Inventory reserves                                                    1,747       1,881      1,460
Other                                                                 3,151       4,824      9,539
                                                                ------------  ---------  ---------
  Gross deferred tax assets                                          64,328      64,533     66,596
Deferred tax assets valuation allowance                             (15,637)    (13,432)    (8,267)
                                                                ------------  ---------  ---------
  Deferred tax assets                                                48,691     (51,101)    58,329
                                                                ------------  ---------  ---------
Fixed assets                                                        (11,606)    (13,195)   (14,564)
Other                                                                --          --           (297)
                                                                ------------  ---------  ---------
  Deferred tax liabilities                                          (11,606)    (13,195)   (14,861)
                                                                ------------  ---------  ---------
      Net deferred tax assets                                    $   37,085   $  37,906  $  43,468
                                                                ------------  ---------  ---------
                                                                ------------  ---------  ---------
</TABLE>
 
   The net change in the total valuation allowance for the three months ended
   March 31, 1998 and for years ended December 31, 1997, and 1996 was an
   increase of $2.2 million, $5.2 million and $3.8 million, respectively.
   Management believes that the net deferred tax assets are recoverable given
   the current estimates of future taxable income.
 
   CCP currently provides income taxes on the earnings of foreign subsidiaries
   and associated companies to the extent they are currently taxable or expected
   to be remitted. Taxes have not been provided on $9.3 million of accumulated
   foreign unremitted earnings which are expected to remain invested
   indefinitely. It is not practicable to estimate the amount of additional tax
   that might be payable on these foreign earnings if they were to be remitted.
 
   CCP paid $0.7 million of income taxes to Corning for the three months ended
   March 31, 1998. CCP paid $6.7 million and $4.9 million of income taxes to
   Corning in 1997 and 1996, respectively. At March 31, 1998, CCP had tax
   benefits attributable to tax-loss and tax-credit carryforwards aggregating
   $22.7 million, which, under the tax sharing arrangement, have been utilized
   by Corning but are deemed to expire at various dates through 2010.
 
                                      F-21
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
               (DOLLARS IN THOUSANDS, UNLESS OTHERWISE INDICATED)
 
    (ALL AMOUNTS AS OF AND FOR THE PERIODS ENDED MARCH 31, 1998 AND 1997 ARE
                                   UNAUDITED)
 
14. SUPPLEMENTAL INCOME STATEMENT DATA
 
<TABLE>
<CAPTION>
                                                                           YEAR ENDED
                                                                          DECEMBER 31,
                                                              ------------------------------------
                                                                1997          1996         1995
                                                              ---------  --------------  ---------
<S>                                                           <C>        <C>             <C>
Interest income.............................................  $    (493)   $   (1,656)   $  (2,159)
Interest expense incurred...................................      9,914        13,609       12,478
Interest capitalized........................................       (940)       (1,232)      (1,564)
                                                              ---------  --------------  ---------
Interest expense, net.......................................  $   8,481    $   10,721    $   8,755
                                                              ---------  --------------  ---------
                                                              ---------  --------------  ---------
Interest paid...............................................  $     570    $      609    $     662
                                                              ---------  --------------  ---------
                                                              ---------  --------------  ---------
Advertising and promotion expense...........................  $  11,794    $   13,489    $  20,058
                                                              ---------  --------------  ---------
                                                              ---------  --------------  ---------
Research and development expenses...........................  $     380    $    2,082    $   3,490
                                                              ---------  --------------  ---------
                                                              ---------  --------------  ---------
</TABLE>
 
15. RESTRUCTURING PROVISION
 
   In 1996, CCP recorded a charge of $4.2 million ($2.6 million after tax) for a
   company-wide restructuring program to reduce overhead costs. Charges included
   severance and other termination benefits related to approximately 60
   employees. Also in 1996, CCP released reserves of $2.1 million related to
   prior restructuring programs for which charges of $10.5 million ($6.0 million
   after tax) and $25.0 million ($15.0 million after tax) were incurred in 1994
   and 1993, respectively.
 
<TABLE>
<CAPTION>
                                                                              YEAR ENDED
                                                                             DECEMBER 31,
                                                                    -------------------------------
                                                                      1997       1996       1995
                                                                    ---------  ---------  ---------
<S>                                                                 <C>        <C>        <C>
Balance, at beginning of year.....................................  $   4,623  $   6,692  $  15,359
                                                                    ---------  ---------  ---------
                                                                    ---------  ---------  ---------
Charges to operations:
  Employee termination costs......................................  $  --      $   3,797  $  --
  Write-off fixed assets..........................................     --            291     --
  Cost of exiting leased facilities...............................     --            158     --
  Other                                                                --         --         --
  Reversal of excess reserve......................................     --         (2,100)    --
                                                                    ---------  ---------  ---------
    TOTAL CHARGES TO OPERATIONS...................................  $  --      $   2,146  $  --
                                                                    ---------  ---------  ---------
                                                                    ---------  ---------  ---------
Costs incurred:
  Employee termination costs......................................  $   3,585      1,186  $   3,680
  Write-off fixed assets..........................................        421        938        100
  Cost of exiting leased facilities...............................        617      1,214      4,433
  Other...........................................................     --            877        454
                                                                    ---------  ---------  ---------
    TOTAL COSTS INCURRED..........................................  $   4,623  $   4,215  $   8,667
                                                                    ---------  ---------  ---------
Balance at end of year............................................  $  --      $   4,623  $   6,692
                                                                    ---------  ---------  ---------
                                                                    ---------  ---------  ---------
</TABLE>
 
                                      F-22
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
               (DOLLARS IN THOUSANDS, UNLESS OTHERWISE INDICATED)
 
    (ALL AMOUNTS AS OF AND FOR THE PERIODS ENDED MARCH 31, 1998 AND 1997 ARE
                                   UNAUDITED)
 
16. STOCKHOLDER'S EQUITY
 
<TABLE>
<CAPTION>
                                                                           YEAR ENDED
                                                                          DECEMBER 31,
                                                              -------------------------------------
                                                                 1997         1996         1995
                                                              -----------  -----------  -----------
<S>                                                           <C>          <C>          <C>
Common Stock................................................  $       240  $       240  $       240
 
Contributed Capital:
Balance at beginning of year................................      273,420      271,964      271,964
Capital contribution........................................          410        1,456      --
                                                              -----------  -----------  -----------
Balance at end of year......................................      273,830      273,420      271,964
                                                              -----------  -----------  -----------
Accumulated Deficit:
Balance at beginning of year................................      (55,176)     (55,987)     (37,498)
Net income (loss)...........................................       13,038        1,620      (18,489)
Change in accounting calendar...............................      --              (809)     --
                                                              -----------  -----------  -----------
Balance at end of year......................................      (42,138)     (55,176)     (55,987)
                                                              -----------  -----------  -----------
Cumulative Translation Adjustment:
Balance at beginning of year................................         (794)      (1,012)        (928)
Translation adjustment......................................       (1,004)         218          (84)
                                                              -----------  -----------  -----------
Balance at end of year......................................       (1,798)        (794)      (1,012)
                                                              -----------  -----------  -----------
Stockholder's equity........................................  $   230,134  $   217,690  $   215,205
                                                              -----------  -----------  -----------
                                                              -----------  -----------  -----------
</TABLE>
 
   Effective January 1, 1996, certain consolidated subsidiaries that previously
   reported on fiscal years ending November 30 adopted a calendar year end. The
   December 1995 net loss of these subsidiaries totaled $0.8 million and was
   recorded in accumulated deficit in 1996.
 
   On March 16, 1998 the board of directors approved a 24,000-for-1 stock split.
   This increased the shares outstanding from 1,000 to 24,000,000. In addition,
   the board of directors approved an increase in the number of authorized
   shares from 1,000 to 45,000,000 and an increase in the par value from $0.00
   to $0.01 per share. Share amounts have been restated for all periods
   presented.
 
                                      F-23
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
               (DOLLARS IN THOUSANDS, UNLESS OTHERWISE INDICATED)
 
    (ALL AMOUNTS AS OF AND FOR THE PERIODS ENDED MARCH 31, 1998 AND 1997 ARE
                                   UNAUDITED)
 
17. COMMITMENTS
 
   CCP is a party to certain noncancellable lease agreements which expire at
   various dates through 2011. Minimum rental commitments outstanding at
   December 31, 1997 are as follows:
 
<TABLE>
<S>                                                                 <C>
1998..............................................................  $  17,411
1999..............................................................     13,116
2000..............................................................      9,652
2001..............................................................      5,932
2002..............................................................      2,679
2003 and thereafter...............................................      3,493
                                                                    ---------
Net minimum lease commitments.....................................  $  52,283
                                                                    ---------
                                                                    ---------
</TABLE>
 
   Rental expense was $24 million, $24 million and $18 million for the fiscal
   years ended December 31, 1997, 1996 and 1995.
 
18. INTERNATIONAL ACTIVITIES
 
   Information by geographic area is presented on a source basis, with exports
   shown in their area of origin. Royalty income is included with other
   unallocated amounts to allow a reconciliation to
 
                                      F-24
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
               (DOLLARS IN THOUSANDS, UNLESS OTHERWISE INDICATED)
 
    (ALL AMOUNTS AS OF AND FOR THE PERIODS ENDED MARCH 31, 1998 AND 1997 ARE
                                   UNAUDITED)
 
18. INTERNATIONAL ACTIVITIES (CONTINUED)
   amounts reported in the Consolidated Statements of Operations. Transfers
   between areas are accounted for at prices approximating prices to
   unaffiliated customers.
 
<TABLE>
<CAPTION>
                                                               LATIN-AMERICA,   ELIMINATIONS
                                                    UNITED      ASIA-PACIFIC   & UNALLOCATED
                                                    STATES       AND CANADA       AMOUNTS      CONSOLIDATED
                                                  -----------  --------------  --------------  -------------
<S>                                               <C>          <C>             <C>             <C>
DECEMBER 31, 1997
- ------------------------------------------------------------------------------------------------------------
Revenues........................................  $   477,717    $   95,143                     $   572,860
Transfers between areas.........................       95,073           210     $    (95,283)
                                                  -----------  --------------  --------------  -------------
Total revenues..................................      572,790        95,353          (95,283)       572,860
Income before tax...............................       14,827        11,240                          26,067
Identifiable assets at year-end.................      439,595        44,049                         483,644
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
DECEMBER 31, 1996
- ------------------------------------------------------------------------------------------------------------
Revenues........................................  $   538,500    $   92,265     $      1,641    $   632,406
Transfers between areas.........................      117,932           199         (118,131)
                                                  -----------  --------------  --------------  -------------
Total revenues..................................      656,432        92,464         (116,490)       632,406
Income (loss) before tax........................       (4,627)       12,533                           7,906
Identifiable assets at year-end.................      473,849        42,596                         516,445
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
DECEMBER 31, 1995
- ------------------------------------------------------------------------------------------------------------
Revenues........................................  $   524,099    $   82,362     $      2,259    $   608,720
Transfers between areas.........................      133,128           219         (133,347)
                                                  -----------  --------------  --------------  -------------
Total revenues..................................      657,227        82,581         (131,088)       608,720
Income (loss) before tax........................      (30,794)       10,800                         (19,994)
Identifiable assets at year-end.................      482,884        48,699                         531,583
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
</TABLE>
 
19. RECAPITALIZATION (UNAUDITED)
 
   On March 2, 1998, Corning, CCP, Borden, Inc. and CCPC Acquisition Corp.
   entered into a Recapitalization Agreement, pursuant to which on April 1,
   1998, CCPC Acquisition Corp. acquired 92% of the outstanding shares of common
   stock of CCP from Corning for $110.4 million. Pursuant to the
   Recapitalization Agreement, CCP borrowed $471.6 million and paid a cash
   dividend to Corning on April 1, 1998 of $472.6 million. The dividend amount
   is subject to a post-closing adjustment based on the Company's net worth and
   outstanding indebtedness on the closing date. Corning retained 8% of the
   outstanding shares of common stock of CCP. Certain assets, liabilities and
   obligations of CCP were retained by Corning, including deferred tax assets
   and liabilities, certain indebtedness, certain post-retirement medical and
   life insurance liabilities, certain pension liability obligations, workers'
   compensation and product liability obligations. The following reflects the
   pro forma effect of the recapitalization on the March 31, 1998 balance sheet.
 
                                      F-25
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY-OWNED SUBSIDIARY OF CORNING INCORPORATED)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
               (DOLLARS IN THOUSANDS, UNLESS OTHERWISE INDICATED)
 
    (ALL AMOUNTS AS OF AND FOR THE PERIODS ENDED MARCH 31, 1998 AND 1997 ARE
                                   UNAUDITED)
 
19. RECAPITALIZATION (UNAUDITED) (CONTINUED)
                  PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
                               AS OF MARCH 31, 1998
                                    (UNAUDITED)
                              (DOLLARS IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                             -----------------------------
                                                                 PRO FORMA
                                                 HISTORICAL    ADJUSTMENTS(A)    PRO FORMA
                                                 ----------  ------------------  ---------
<S>                                              <C>         <C>                 <C>
ASSETS
Cash and cash equivalents......................  $    7,421      $   (3,421)(b)  $   4,000
Accounts receivable, net of allowances.........      55,267          15,681         70,948
Inventories, net...............................     150,430          --            150,430
Prepaid expenses and other current assets......       5,249          --              5,249
Deferred taxes on income.......................       7,799          (7,799)(c)     --
                                                 ----------      ----------      ---------
  Total current assets.........................     226,166           4,461        230,627
                                                 ----------      ----------      ---------
Property and equipment, net....................     150,510          --            150,510
Deferred taxes on income.......................      29,286          18,219(c)      47,505
Goodwill, net of accumulated amortization......      59,997          --             59,997
Other assets...................................      16,339          15,000(d)      31,339
                                                 ----------      ----------      ---------
  Total assets.................................  $  482,298      $   37,680      $ 519,978
                                                 ----------      ----------      ---------
                                                 ----------      ----------      ---------
 
LIABILITIES AND STOCKHOLDER'S EQUITY
 
Debt payable within one year...................  $    1,894          --          $   1,894
Accounts payable and accrued expenses..........      67,693      $    8,290         75,983
Due to Corning Incorporated....................      96,224         (96,224)        --
                                                 ----------      ----------      ---------
  Total current liabilities....................     165,811         (87,934)        77,877
                                                 ----------      ----------      ---------
Long-term debt.................................       8,285         471,600(b)     479,885
Accrued postretirement liability...............      60,856         (32,589)        28,267
Other liabilities..............................      20,620         (17,669)         2,951
                                                 ----------      ----------      ---------
  Total liabilities............................     255,572         333,408        588,980
                                                 ----------      ----------      ---------
 
Stockholder's equity (deficit).................     226,726        (295,728)       (69,002)
                                                 ----------      ----------      ---------
    Total liabilities and stockholder's
      equity...................................  $  482,298      $   37,680      $ 519,978
                                                 ----------      ----------      ---------
                                                 ----------      ----------      ---------
</TABLE>
 
                                      F-26
<PAGE>
            NOTES TO PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
 
                              AS OF MARCH 31, 1998
 
                             (DOLLARS IN THOUSANDS)
 
The pro forma consolidated condensed balance sheet reflects pro forma
adjustments for the transactions to CCP's historical consolidated balance sheet
as of March 31, 1998. The transactions have not and will not impact the
historical basis of the Company's assets and liabilities with the exception of
deferred tax amounts.
 
(a)
 
<TABLE>
<S>                                                               <C>
Cash Dividend...................................................  $(472,600)
Issuance of Preferred Stock.....................................     30,000
Cash retained by Corning........................................     (7,421)
Liabilities retained by Corning.................................     57,649
Deferred tax adjustments (See Note (c)).........................     10,420
Intercompany loan forgiveness...................................     96,224
Estimated transaction fees and expenses(5)......................    (10,000)
                                                                  ---------
                                                                   (295,728)
                                                                  ---------
                                                                  ---------
</TABLE>
 
   In addition, Corning will contribute $16,735 ($15,681 in cash and $1,054 in
    non-cash) related to incremental incentive programs. See Note (a) to the Pro
    Forma Consolidated Condensed Statement of Operations.
 
(b) The net sources and uses of cash reflect the following:
 
<TABLE>
<S>                                                       <C>
Sources:
  Revolving Credit Facility.............................      $  71,600
  Term Loans............................................        200,000
  Old Notes.............................................        200,000
  Junior Preferred Stock................................         30,000
  Common Stock - CCPC Acquisition.......................        110,400
  Common Stock - Corning................................          9,600
                                                          -----------------
      Total Sources.....................................      $ 621,600
                                                          -----------------
                                                          -----------------
Uses:
  Cash Dividend(1)......................................      $ 472,600
  Stock Acquisition(2)..................................        110,400
  Corning Retained Equity...............................          9,600
  Estimated Transactions fees and expenses(3)...........         25,000
  Increase to operating cash(4).........................          4,000
                                                          -----------------
      Total Uses........................................      $ 621,600
                                                          -----------------
                                                          -----------------
</TABLE>
 
- ------------------------
 
    (1) The Cash Dividend of $472,600 is subject to post-closing adjustment
       based on CCP's net worth and outstanding indebtedness on the Closing
       Date. CCP cannot estimate at this time whether such post-closing
       adjustment, if any, will require an additional payment to Corning or a
       remittance from Corning.
 
    (2) Under the 1998 Plan, CCPC Acquisition is currently in the process of
       selling shares of common stock, and CCP is making grants of options to
       purchase common stock, to certain members of management of CCP, which in
       each case is not reflected in the Pro Forma Financial Information. In the
       aggregate, the sales of shares of common stock by CCPC Acquisition and
       the option grants by CCP will represent approximately 12.4% of CCP's
       fully diluted common stock.
 
    (3) Includes initial purchasers' discount and offering discount on the
       Notes, fees related to the Credit Facilities and other fees and expenses
       incurred in connection with the transactions.
 
                                      F-27
<PAGE>
            NOTES TO PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
 
                              AS OF MARCH 31, 1998
 
                             (DOLLARS IN THOUSANDS)
 
    (4) Represents the $21,000 increase to CCP's cash balances at the time of
       the Recapitalization, net of the application of $17,000 of such balances
       to pay estimated Transactions fees and expenses in connection with the
       refinancing.
 
    (5) Represents the portion of the total $25,000 of estimated transaction
       fees and expenses. Transaction fees and expenses consist of (i) legal,
       accounting and investment banking fees, certain taxes and other expenses,
       (ii) transaction and financing fees and expenses payable to Borden and
       (iii) miscellaneous fees and expenses such as printing and filing fees.
 
(c) Represents net current and non-current deferred taxes of $32,903 on the
    estimated increase in tax basis of fixed assets and intangibles as a result
    of the Section 338(h)(10) election made in connection with the
    Recapitalization, net of $22,483 related to liabilities retained by Corning.
 
(d) Represents the portion of the estimated transactions fees and expenses that
    has been recorded as deferred financing costs and will be amortized over the
    weighted average life of the related indebtedness.
 
                                      F-28
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS OFFERING MEMORANDUM, AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED. THIS OFFERING MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE
SECURITIES TO WHICH IT RELATES OR ANY OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS OFFERING MEMORANDUM NOR
ANY OFFER OR SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.
 
                  -------------------------------------------
 
TABLE OF CONTENTS
 
<TABLE>
<S>                                     <C>
Summary...............................          1
Summary Historical and Pro Forma
  Financial and Other Data............         13
Risk Factors..........................         16
The Recapitalization..................         28
Use of Proceeds.......................         30
Capitalization........................         30
Unaudited Pro Forma Financial
  Information.........................         31
Selected Historical Consolidated
  Financial and Other Data............         40
Management's Discussion and Analysis
  of Financial Condition and Results
  of Operations.......................         43
Business..............................         56
Management............................         74
Principal Stockholders................         81
Certain Relationships and Related
  Party Transactions..................         82
Description of Capital Stock..........         85
Description of Credit Facilities......         86
The Exchange Offer....................         89
Description of the Exchange Notes.....        100
Exchange and Registration Rights
  Agreement...........................        137
Book-Entry; Delivery and Form.........        140
Plan of Distribution..................        143
Legal Matters.........................        144
Experts...............................        144
Change in Accountants.................        144
Index to Consolidated Financial
  Statements..........................        F-1
Annex A--Form of Transferee Letter of
  Representation......................        A-1
</TABLE>
 
PROSPECTUS
 
$200,000,000
 
CORNING CONSUMER
PRODUCTS COMPANY
 
OFFER TO EXCHANGE $200,000,000 OF ITS 9 5/8% SENIOR SUBORDINATED NOTES DUE 2008,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, FOR $200,000,000 OF ITS
OUTSTANDING 9 5/8% SENIOR SUBORDINATED NOTES DUE 2008.
 
             , 1998
<PAGE>
                                    PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
 
    Section 145 of the Delaware General Corporation Law (the "DGCL") provides
that a corporation may indemnify directors and officers as well as other
employees and individuals against expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement in connection with specified
actions, suits or proceedings, whether civil, criminal, administrative, or
investigative (other than action by or in the right of the corporation a
"derivative action"), if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceedings, had no
reasonable cause to believe their conduct was unlawful. A similar standard is
applicable in the case of derivative actions, except that indemnification only
extends to expenses (including attorneys' fees) incurred in connection with the
defense or settlement of such actions, and the statute requires court approval
before there can be any indemnification where the person seeking indemnification
has been found liable to the corporation. The statute provides that it is not
exclusive of other indemnification that may be granted by a corporation's
charter, by-laws, desinterested director vote, stockholder vote, agreement or
otherwise. Article 2.13 of the Registrant's By-laws indemnifies directors in the
performance of their duties in relying in good faith on the books of accounts or
reports made to the Company by any of its officials, or by an independent
certified public accountant, or by an appraiser selected with reasonable care by
the Board of Directors, or by a committee appointed by the Board of Directors,
or in relying on good faith upon other records of the Company. The Registrant
has also obtained officers' and directors' liability insurance which insures
against liabilities that officers and directors of the Registrant, in such
capacities, may incur.
 
    Such 102(b)(7) of the DGCL permits a corporation to provide in its
certificate of incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duties as a director, except for liability (i) for any
transaction from which the director derives an improper personal benefit, (ii)
for acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law, (iii) for improper payment of dividends or
redemptions of shares, or (iv) for any breach of a director's duty of loyalty to
the company or its stockholders. Article Eight of the Registrant's Restated
Certificate of Incorporation includes such a provision.
 
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
 
    (a) Exhibits
 
<TABLE>
<CAPTION>
 EXHIBIT
   NO.                                              DESCRIPTION OF EXHIBIT
- ----------  ------------------------------------------------------------------------------------------------------
 
<C>         <S>
     *2.1   Recapitalization Agreement dated as of March 2, 1998, among Corning Consumer Products Company (the
            "Company"), Corning Incorporated, Borden, Inc. and CCPC Acquisition Corp.
 
     *2.2   Amendment to the Recapitalization Agreement dated March 31, 1998.
 
     *2.3   Assignment and Assumption Agreement dated as of April 1, 1998 between the Company and Corning.
 
     *3.1   Amended and Restated Certificate of Incorporation of the Company.
 
     *3.2   By-Laws of the Company.
 
     *4.1   Indenture dated as of May 5, 1998 between the Company and The Bank of New York, as Trustee (the
            "Indenture").
</TABLE>
 
                                      II-1
<PAGE>
<TABLE>
<CAPTION>
 EXHIBIT
   NO.                                              DESCRIPTION OF EXHIBIT
- ----------  ------------------------------------------------------------------------------------------------------
     *4.2   Form of 9 5/8% Senior Subordinated Note due 2008 (included in Exhibit 4.1).
<C>         <S>
 
     *4.3   Form of 9 5/8% Series B Senior Subordinated Note due 2008 (included in Exhibit 4.1).
 
     *4.4   Exchange and Registration Rights Agreement dated as of May 5, 1998 among the Company, Chase Securities
            Inc., Salomon Brothers Inc and Citicorp Securities, Inc.
 
    **5     Opinion of Simpson Thacher & Bartlett.
 
    *10.1   Credit Facility, dated as of April 9, 1998, among the Company, the several lenders from time to time
            parties thereto), and The Chase Manhattan Bank, as administrative agent.
 
    *10.2   Stockholders' Agreement, dated as of April 1, 1998 among the Company, CCPC Acquisition Corp. and
            Corning Incorporated.
 
    *10.3   Form of Management Stockholder's Agreement among the Company, CCPC Acquisition Corp. and certain
            officers of the Company.
 
    *10.4   Non-Qualified Stock Option Agreement dated as of April 1, 1998 between the Company and certain
            employees of the Company.
 
    *10.5   1998 Stock Purchase and Option Plan for Key Employees of the Company and Subsidiaries.
 
    *10.6   Registration Rights Agreement between the Company and CCPC Acquisition Corp. dated as of April 1,
            1998.
 
    *10.7   Tax Sharing Agreement among the Company, CCPC Acquisition Corp. and Revere Ware Corporation, dated as
            of April 30, 1998.
 
    *10.8   Form of Sale Participation Agreement between the Company and certain officers of the Company.
 
    *12     Computation of Ratio of Earnings to Fixed Charges.
 
    *16     Letter re change in Certifying Accountant.
 
    *21     List of Subsidiaries.
 
   **23.1   Consent of Simpson Thacher & Bartlett (included as part of its opinion filed as Exhibit 5.1 hereto).
 
    *23.2   Consent of Price Waterhouse LLP, independent certified public accountants.
 
    *24     Powers of Attorney. (Included on Page II-6)
 
    *25     Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as
            Trustee.
 
    *27.1   Financial Data Schedule for the three months ended March 31, 1998.
 
    *27.2   Financial Data Schedule for the year ended December 31, 1997.
 
    *99.1   Form of Letter of Transmittal.
 
    *99.2   Form of Notice of Guaranteed Delivery.
</TABLE>
 
- ------------------------
 
*   Filed herewith.
 
**  To be filed by amendment.
 
    (b) Financial Statement Schedules
 
Schedule II--Valuation Accounts and Reserves
 
                                      II-2
<PAGE>
ITEM 22. UNDERTAKINGS.
 
    The undersigned Registrant hereby undertakes:
 
    (1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
 
         (i) To include any prospectus required by Section 10(a)(3) of the
    Securities Act of 1933;
 
        (ii) To reflect in the prospectus any facts or events arising after the
    effective date of the registration statement (or the most recent
    post-effective amendment thereto), which, individually or in the aggregate,
    represent a fundamental change in the information set forth in the
    registration statement;
 
        (iii) to include any material information with respect to the plan of
    distribution not previously disclosed in the registration statement or any
    material change to such information in the registration statement.
 
    (2) That, for the purpose 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) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
 
    The undersigned Registrant hereby undertakes as follows: 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), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed to be underwriters, in addition to the information
called for by the other Items of the applicable form.
 
    The Registrant undertakes that every prospectus: (i) that is filed pursuant
to the immediately preceding undertaking or (ii) that purports to meet the
requirements of section 10(a)(3) of the Act 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.
 
    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 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the 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 Act and will be governed by the final adjudication of
such issue.
 
    The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail
 
                                      II-3
<PAGE>
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.
 
    The undersigned Registrant hereby undertakes 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
<PAGE>
                                   SIGNATURES
 
    Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, on June 17, 1998.
 
<TABLE>
<S>                             <C>  <C>
                                CORNING CONSUMER PRODUCTS COMPANY
 
                                By:           /s/ PETER F. CAMPANELLA
                                     -----------------------------------------
                                              Chief Executive Officer
</TABLE>
 
    Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed on the 17th day of June, 1998 by the following persons
in the capacities indicated:
 
          SIGNATURE                        TITLE
- ------------------------------  ---------------------------
                                Chief Executive Officer,
   /s/ PETER F. CAMPANELLA        President and Director
- ------------------------------    (Principal Executive
     Peter F. Campanella          Office)
 
                                Senior Vice
    /s/ ANTHONY P. DEASEY         President--Finance and
- ------------------------------    Chief Financial Officer
      Anthony P. Deasey           (Principal Financial
                                  Officer)
 
     /s/ GEORGE F. KNIGHT       Vice President Controller
- ------------------------------    and Treasurer (Principal
       George F. Knight           Accounting Officer)
 
              *                 Director
- ------------------------------
       C. Robert Kidder
 
              *                 Director
- ------------------------------
      Edward A. Gilhuly
 
              *                 Director
- ------------------------------
      Clifton S. Robbins
 
              *                 Director
- ------------------------------
       Scott M. Stuart
 
              *                 Director
- ------------------------------
      William H. Carter
 
              *                 Director
- ------------------------------
       Nancy A. Reardon
 
              *                 Director
- ------------------------------
    William F. Stoll, Jr.
 
*By:    /s/ GEORGE F. KNIGHT
      -------------------------
          ATTORNEY-IN-FACT
 
                                      II-5
<PAGE>
                               POWER OF ATTORNEY
 
    We, the undersigned directors and officers of Corning Consumer Products
Company, do hereby constitute and appoint Peter F. Campanella, George F. Knight
and William F. Stoll, Jr. or any of them, our true and lawful attorneys and
agents, to do any and all acts and things in our name and on our behalf in our
capacities as directors and officers and to execute any and all instruments for
us and in our names in the capacities indicated below, which said attorneys and
agents, or either of them, may deem necessary or advisable to enable said
Corporation to comply with the Securities Act of 1933 and any rules, regulations
and requirements of the Securities and Exchange Commission, in connection with
this Registration Statement, including specifically, but without limitation,
power and authority to sign for us or any of us in our names in the capacities
indicated below, any and all amendments (including post-effective amendments)
hereto and we do hereby ratify and confirm all that said attorneys and agents,
or either of them, shall do or cause to be done by virtue hereof.
 
    Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on the 17th day of June, 1998 by the
following persons in the capacities indicated:
 
SIGNATURE                                  TITLE
- ------------------------------  ---------------------------
                                Chief Executive Officer,
   /s/ PETER F. CAMPANELLA        President and Director
- ------------------------------    (Principal Executive
     Peter F. Campanella          Office)
 
                                Senior Vice
    /s/ ANTHONY P. DEASEY         President--Finance and
- ------------------------------    Chief Financial Officer
      Anthony P. Deasey           (Principal Financial
                                  Officer)
 
     /s/ GEORGE F. KNIGHT       Vice President, Controller
- ------------------------------    and Treasurer (Principal
       George F. Knight           Accounting Officer)
 
     /s/ C. ROBERT KIDDER       Director
- ------------------------------
       C. Robert Kidder
 
    /s/ EDWARD A. GILHULY       Director
- ------------------------------
      Edward A. Gilhuly
 
    /s/ CLIFTON S.ROBBINS       Director
- ------------------------------
      Clifton S. Robbins
 
     /s/ SCOTT M. STUART        Director
- ------------------------------
       Scott M. Stuart
 
    /s/ WILLIAM H. CARTER       Director
- ------------------------------
      William H. Carter
 
     /s/ NANCY A. REARDON       Director
- ------------------------------
       Nancy A. Reardon
 
  /s/ WILLIAM F. STOLL, JR.     Director
- ------------------------------
    William F. Stoll, Jr.
 
                                      II-6
<PAGE>
                       CORNING CONSUMER PRODUCTS COMPANY
              (A WHOLLY OWNED SUBSIDIARY OF CORNING INCORPORATED)
                          FINANCIAL STATEMENT SCHEDULE
                 SCHEDULE II - VALUATION ACCOUNTS AND RESERVES
                             (DOLLARS IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                BALANCE AT                             BALANCE AT
YEAR ENDED DECEMBER 31, 1997                                     12/31/96     ADDITIONS   DEDUCTIONS    12/31/97
- --------------------------------------------------------------  -----------  -----------  -----------  -----------
<S>                                                             <C>          <C>          <C>          <C>
Doubtful accounts and allowances..............................   $   7,848    $   1,311    $  (1,855)   $   7,304
LIFO allowance................................................        (366)       6,747       (4,271)       2,110
Deferred tax assets valuation allowance.......................       8,267        5,805         (640)      13,432
Accumulated amortization of goodwill and other intangibles....       6,592        2,033       --            8,625
Accumulated amortization of software..........................       8,338        3,244         (811)      10,771
</TABLE>
 
<TABLE>
<CAPTION>
                                                                BALANCE AT                             BALANCE AT
YEAR ENDED DECEMBER 31, 1996                                     12/31/95     ADDITIONS   DEDUCTIONS    12/31/96
- --------------------------------------------------------------  -----------  -----------  -----------  -----------
<S>                                                             <C>          <C>          <C>          <C>
Doubtful accounts and allowances..............................   $  13,299    $   1,967    $  (7,418)   $   7,848
LIFO allowance................................................      (5,087)       4,739          (18)        (366)
Deferred tax assets valuation allowance.......................       4,500       10,104       (6,337)       8,267
Accumulated amortization of goodwill and other intangibles....       4,556        2,036       --            6,592
Accumulated amortization of software..........................       5,440        3,289         (391)       8,338
</TABLE>
 
<TABLE>
<CAPTION>
                                                                BALANCE AT                             BALANCE AT
YEAR ENDED DECEMBER 31, 1995                                     12/31/94     ADDITIONS   DEDUCTIONS    12/31/95
- --------------------------------------------------------------  -----------  -----------  -----------  -----------
<S>                                                             <C>          <C>          <C>          <C>
Doubtful accounts and allowances..............................   $   6,784    $   8,121    $  (1,606)   $  13,299
LIFO allowance................................................      (1,830)         305       (3,562)      (5,087)
Deferred tax assets valuation allowance.......................       6,329        4,508       (6,337)       4,500
Accumulated amortization of goodwill and other intangibles....       2,525        2,031       --            4,556
Accumulated amortization of software..........................       3,613        1,980         (153)       5,440
</TABLE>
 
                                      S-1
<PAGE>
 
<TABLE>
<CAPTION>
  EXHIBIT
    NO.                                    DESCRIPTION OF EXHIBIT
- -----------  -----------------------------------------------------------------------------------
 
<C>          <S>
       *2.1  Recapitalization Agreement dated as of March 2, 1998, among Corning Consumer
             Products Company (the "Company"), Corning Incorporated, Borden, Inc. and CCPC
             Acquisition Corp.
 
       *2.2  Amendment to the Recapitalization Agreement dated March 31, 1998
 
       *2.3  Assignment and Assumption Agreement dated as of April 1, 1998 between the Company
             and Corning.
 
       *3.1  Amended and Restated Certificate of Incorporation of the Company.
 
       *3.2  By-Laws of the Company.
 
       *4.1  Indenture dated as of May 5, 1998 between the Company and The Bank of New York, as
             Trustee (the "Indenture").
 
       *4.2  Form of 9 5/8% Senior Subordinated Note due 2008 (included in Exhibit 4.1).
 
       *4.3  Form of 9 5/8% Series B Senior Subordinated Note due 2008 (included in Exhibit
             4.1).
 
       *4.4  Exchange and Registration Rights Agreement dated as of May 5, 1998 among the
             Company, Chase Securities Inc., Salomon Brothers Inc and Citicorp Securities, Inc.
 
      **5    Opinion of Simpson Thacher & Bartlett.
 
      *10.1  Credit Facility, dated as of April 9, 1998, among the Company, the several lenders
             from time to time parties thereto, and The Chase Manhattan Bank, as administrative
             agent.
 
      *10.2  Stockholders' Agreement, dated as of April 1, 1998 among the Company, CCPC
             Acquisition Corp. and Corning Incorporated.
 
      *10.3  Form of Management Stockholder's Agreement among the Company, CCPC Acquisition
             Corp. and certain officers of the Company.
 
      *10.4  Non-Qualified Stock Option Agreement dated as of April 1, 1998 between the Company
             and certain employees of the Company.
 
      *10.5  1998 Stock Purchase and Option Plan for Key Employees of the Company and
             Subsidiaries.
 
      *10.6  Registration Rights Agreement between the Company and CCPC Acquisition Corp. dated
             as of April 1, 1998.
 
      *10.7  Tax Sharing Agreement among the Company, CCPC Acquisition Corp. and Revere Ware
             Corporation, dated as of April 30, 1998.
 
      *10.8  Form of Sale Participation Agreement between the Company and certain officers of
             the Company.
 
      *12    Computation of Ratio of Earnings to Fixed Charges.
 
      *16    Letter re change in certifying accountant.
 
      *21    List of Subsidiaries.
 
     **23.1  Consent of Simpson Thacher & Bartlett (included as part of its opinion filed as
             Exhibit 5.1 hereto).
 
      *23.2  Consent of Price Waterhouse LLP, independent certified public accountants.
 
      *24    Powers of Attorney. (Included on Page II-6)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
  EXHIBIT
    NO.                                    DESCRIPTION OF EXHIBIT
- -----------  -----------------------------------------------------------------------------------
      *25    Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank
             of New York, as Trustee.
<C>          <S>
 
      *27.1  Financial Data Schedule for the three months ended March 31, 1998.
 
      *27.2  Financial Data Schedule for the year ended December 31, 1997.
 
      *99.1  Form of Letter of Transmittal.
 
      *99.2  Form of Notice of Guaranteed Delivery.
</TABLE>
 
- ------------------------
 
*   Filed herewith.
 
**  To be filed by amendment.
 
FINANCIAL STATEMENT SCHEDULES
 
Schedule II--Valuation Accounts and Reserves

<PAGE>
                                                                     Exhibit 2.1

                                                                  CONFORMED COPY
================================================================================

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

                           RECAPITALIZATION AGREEMENT

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

                                      Among

                              CORNING INCORPORATED,

                       CORNING CONSUMER PRODUCTS COMPANY,

                             CCPC ACQUISITION CORP.

                                       and

                                  BORDEN, INC.

                               Dated March 2, 1998

================================================================================
<PAGE>

                                TABLE OF CONTENTS

Section                                                                   Page

                                  ARTICLE I

                                 DEFINITIONS

1.01.  Certain Defined Terms.................................................1
1.02.  Other Defined Terms...................................................9

                                  ARTICLE II

                              PURCHASE AND SALE

2.01.  Consummation of Financing; Dividend..................................11
2.02.  Purchase and Sale of Acquired Shares.................................12
2.03.  Closing..............................................................12
2.04.  Adjustment of Cash Dividend Amount...................................13

                                 ARTICLE III

                 REPRESENTATIONS AND WARRANTIES OF THE SELLER

3.01.  Incorporation of the Seller and Authority of the Seller 
       and the Company......................................................16
3.02.  Organization, Authority and Qualification of the Company.............16
3.03.  Capital Stock of the Company.........................................16
3.04.  Subsidiaries.........................................................17
3.05.  No Conflict..........................................................17
3.06.  Consents and Approvals...............................................18
3.07.  Financial Information; Inventory; Receivables........................18
3.08.  Absence of Undisclosed Liabilities...................................18
3.09.  Absence of Certain Changes or Events.................................19
3.10.  Absence of Litigation................................................20
3.11.  Compliance with Laws.................................................20
3.12.  Licenses and Permits.................................................20
3.13.  Real Property; Tangible Property.....................................21
3.14.  Employee Benefit and Labor Matters...................................22
3.15.  Labor Matters........................................................27
3.16.  Taxes................................................................27
3.17.  Environmental, Health and Safety.....................................28
3.18.  Intellectual Property................................................29


                                     -i-
<PAGE>

Section                                                                   Page

3.19.  Material Contracts...................................................31
3.20.  Brokers..............................................................32
3.21.  Entire Business......................................................32

                                  ARTICLE IV

               REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

4.01.  Incorporation and Authority of the Purchaser.........................32
4.02.  No Conflict..........................................................33
4.03.  Consents and Approvals...............................................33
4.04.  Absence of Litigation................................................33
4.05.  Investment Purpose...................................................33
4.06.  Financing............................................................34
4.07.  Brokers..............................................................34

                                  ARTICLE V

                            ADDITIONAL AGREEMENTS

5.01.  Conduct of Business Prior to the Closing.............................34
5.02.  Access to Information................................................37
5.03.  Confidentiality......................................................38
5.04.  Regulatory and Other Authorizations; Consents........................39
5.05.  Investigation........................................................39
5.06.  Administrative Services Agreement....................................40
5.07.  Company Headquarters.................................................40
5.08.  Non-Solicitation of Employees........................................41
5.09.  Intellectual Property Matters........................................41
5.10.  Corning Glass Center; Corning Plant Stores; Shared Facility 
       Agreement............................................................44
5.11.  Greenville Supply Agreement; Transfer of Molds.......................44
5.12.  Technology Support Agreement.........................................44
5.13.  Transition Services Agreement........................................44
5.14.  Actions Affecting the Closing Balance Sheet..........................45
5.15.  Foreign Sales Corporation............................................45
5.16.  Payment of Intercompany Accounts Payable.............................45
5.17.  Non-Competition......................................................46
5.18.  Facility Financing Interests.........................................47
5.19.  Stockholders Agreement...............................................48
5.20.  No Negotiation.......................................................48
5.21.  Financial Statements and Reports.....................................48


                                     -ii-
<PAGE>

Section                                                                   Page

5.22.  Insurance............................................................49
5.23.  Cumulative Gross Margin Payment......................................49
5.25.  Reasonable Best Efforts..............................................51

                                  ARTICLE VI

                               EMPLOYEE MATTERS

6.01.  Employees............................................................51
6.02.  Employee Benefits Arrangements.......................................53
6.03.  Goal Sharing Plan....................................................58
6.04.  Stock Options........................................................59
6.05.  Supplemental Plans...................................................59
6.06.  Medical Costs........................................................59
6.07.  Cooperation..........................................................59
6.08.  Remedies.............................................................60
6.09.  Indemnification......................................................60
6.10.  Survival.............................................................60

                                 ARTICLE VII

                                     TAX

7.01.  Tax Indemnities......................................................61
7.02.  Refunds and Tax Benefits.............................................63
7.03.  Contests.............................................................64
7.04.  Preparation of Tax Returns...........................................66
7.05.  Cooperation and Exchange of Information..............................68
7.06.  Conveyance Taxes.....................................................68
7.07.  Section 338(h)(10) Election..........................................68
7.08.  Miscellaneous........................................................70

                                 ARTICLE VIII

                            CONDITIONS TO CLOSING

8.01.  Conditions to Obligations of the Seller and the Company..............70
8.02.  Conditions to Obligations of the Purchaser...........................71

                                  ARTICLE IX


                                    -iii-

<PAGE>

                                 INDEMNIFICATION

9.01.  Survival of Representations and Warranties...........................73
9.02.  Indemnification for the Benefit of the Seller........................73
9.03.  Indemnification by the Seller........................................75
9.04.  Indemnification Procedures...........................................77
9.05.  Environmental Indemnification........................................78

                                  ARTICLE X

                            TERMINATION AND WAIVER

10.01.  Termination.........................................................80
10.02.  Effect of Termination...............................................81
10.03.  Waiver..............................................................81

                                  ARTICLE XI

                              GENERAL PROVISIONS

11.01.  Expenses............................................................81
11.02.  Notices.............................................................82
11.03.  Public Announcements................................................83
11.04.  Headings............................................................83
11.05.  Severability........................................................83
11.06.  Entire Agreement....................................................84
11.07.  Assignment..........................................................84
11.08.  No Third Party Beneficiaries........................................84
11.09.  Amendment...........................................................84
11.10.  Governing Law.......................................................84
11.11.  Counterparts........................................................84
11.12.  Specific Performance................................................84
11.13.  Waiver of Jury Trial................................................84
11.14.  Guarantee...........................................................85
11.15.  Effect of Disclosure Schedules......................................85


                                     -iv-
<PAGE>

                                   EXHIBITS

Exhibit 1.01(a)      Durable Consumer Products
Exhibit 1.01(b)      Housewares Products
Exhibit 1.01(c)      1997 Balance Sheet
Exhibit 2.01         Financing
Exhibit 2.03(b)      Summary of Preferred Stock Terms
Exhibit 2.03(f)      Form of Stockholders Agreement
Exhibit 5.01         Corning Consumer Products Company 1998 Capital Budget
Exhibit 5.06         Form of Administrative Services Agreement
Exhibit 5.07         Form of Company Headquarters Lease Agreement
Exhibit 5.09(b)(i)   Form of CORNING WARE and PYROCERAM License Agreement
Exhibit 5.09(b)(ii)  Form of PYREX License Agreement 
Exhibit 5.09(d)      Form of Patent and Know-How License Agreement 
Exhibit 5.09(e)      Form of Temporary CORNING License Agreement 
Exhibit 5.10         Form of Shared Facility Agreement 
Exhibit 5.11         Form of Greenville Supply Agreement 
Exhibit 5.12         Form of Technology Support Agreement 
Exhibit 5.13         Form of Transition Services Agreement


                                     -v-
<PAGE>

                              DISCLOSURE SCHEDULE

            The Disclosure Schedule shall include the following Sections:

3.04    Subsidiaries
3.05    No Conflict
3.06    Consents and Approvals
3.08    Absence of Undisclosed Liabilities
3.09    Absence of Certain Changes or Events
3.10    Absence of Litigation
3.11    Compliance with Laws
3.12    Licenses and Permits
3.13    Real Property; Tangible Property
3.14    Employee Benefit Matters
3.15    Labor Matters
3.16    Taxes
3.17    Environmental, Health and Safety Compliance
3.18    Intellectual Property
3.19    Material Contracts
3.22    Insurance
5.01    Conduct of Business Prior to the Closing
5.18    Documents and Instruments Evidencing Facility Financing Interests
6.01    Termination Benefits of the Company and the Subsidiaries
6.02    Collective Bargaining Agreements
            6.02(d)(i)   Continued Collective Bargaining Agreements
            6.02(d)(ii)  Assumed Collective Bargaining Agreements
<PAGE>

            RECAPITALIZATION AGREEMENT, dated March 2, 1998, among CORNING
INCORPORATED, a New York corporation (the "Seller"), CORNING CONSUMER PRODUCTS
COMPANY, a Delaware corporation (the "Company"), CCPC ACQUISITION CORP., a
Delaware corporation (the "Purchaser") and, solely for purposes of Sections
10.02 and 11.14(a) hereof, Borden, Inc., a New Jersey corporation and an
Affiliate of the Purchaser ("Borden").

            WHEREAS, the Seller owns all the issued and outstanding shares (the
"Shares") of common stock, no par value per share, of the Company; and

            WHEREAS, the Seller wishes to sell to the Purchaser, and the
Purchaser wishes to purchase from the Seller, certain Shares, and the Purchaser
and the Seller desire to effect a recapitalization of the Company, each on the
terms and subject to the conditions set forth herein.

            NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, the Purchaser, the Company and
the Seller hereby agree as follows:

                                   ARTICLE I

                                  DEFINITIONS

            SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:

            "Acquired Shares" means 920 Shares.

            "Affiliate" means, with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person.

            "Agreement" or "this Agreement" means this Recapitalization
Agreement, dated March 2, 1998, among the Seller, the Company, the Purchaser
and, for purposes of Sections 10.02 and 11.14(a) only, Borden (including the
Exhibits hereto and the Disclosure Schedule) and all amendments hereto made in
accordance with the provisions of Section 11.09.

            "Books and Records" means all the books of account and other
financial records pertaining to the Company and the Subsidiaries.
<PAGE>
                                       2


            "Business" means the business of manufacturing, distributing,
exporting and/or selling the Corning Consumer Products as conducted and as
currently intended to be conducted by the Company and the Subsidiaries.

            "Business Day" means any day that is not a Saturday, a Sunday or
other day on which banks are required or authorized by law to be closed in The
City of New York.

            "Cash Dividend Amount" means $472,600,000 as adjusted pursuant to
Section 2.04.

            "Charleroi Facility" means all real property, all improvements
thereon and all machinery and equipment used in connection therewith owned by or
leased or otherwise made available to the Company, including all easements,
licenses, rights and appurtenances thereto, comprising its manufacturing
facility located in the Borough of Charleroi, Washington County, Commonwealth of
Pennsylvania, such real property being bounded generally on the east by
Monongahela River, on the south by real property owned (on the date of this
Agreement) by West Penn Power, on the west by real property owned (on the date
of this Agreement) by Consolidated Rail Corporation and on the north by real
property owned (on the date of this Agreement) by the Borough of Charleroi.

            "Closing Balance Sheet" means the audited consolidated balance sheet
(including the related notes and schedules thereto) of the Company and the
Subsidiaries, to be prepared pursuant to Section 2.04 and to be dated as of the
Closing Date, except that if the Closing Date is the first day of any month, the
Closing Balance Sheet will be dated as of the day immediately preceding the
Closing Date.

            "Code" means the Internal Revenue Code of 1986, as amended through
the date hereof.

            "Confidentiality Agreement" means the letter agreement dated as of
February 9, 1998, Seller and Borden.

            "Consumer Copyrights" means any and all statutory or other rights in
any copyrights owned by the Seller, the Company or any Subsidiary and protecting
a work which has been used or is currently intended to be used in the Business.

            "Consumer Grantee License Agreements" means each written unexpired
agreement dated prior to the Closing Date pursuant to which the Seller (and its
Affiliates), the Company or any Subsidiary, individually or in combination with
each other, has the right to use any Consumer Intellectual Property, or any
other intellectual property owned by a third party, in connection with the
Business.
<PAGE>
                                       3


            "Consumer Grantor License Agreements" means each written, unexpired
agreement dated prior to the Closing Date pursuant to which the Seller (and its
Affiliates), the Company or any Subsidiary has licensed to a third party any
Consumer Intellectual Property.

            "Consumer Intellectual Property" means all intellectual property
rights owned or used by the Company and the Subsidiaries, including, without
limitation, the Consumer Trademarks, the Consumer Know-How, the Consumer
Patents, the Seller's Retained Patents, the Consumer Copyrights, and any one of
the foregoing.

            "Consumer License Agreements" means the Consumer Grantor License
Agreements and the Consumer Grantee License Agreements.

            "Consumer Know-How" means any and all knowledge and experience used
or currently intended to be used by the Seller, the Company or any Subsidiary
prior to the Closing Date, or that pertain or relate to the technology and
industrial techniques used, in the commercial production of Corning Consumer
Products and any evolutionary improvements therein, and not a replacement
therefor, created before the fifth anniversary of the Closing Date.

            "Consumer Patents" means all patents, and all applications,
reissues, renewals, continuations and extensions relating to any patents owned
or used by, or subject to a right of assignment to, the Seller, the Company or
any Subsidiary prior to the Closing which in the case of the Seller only pertain
or relate to, or are only used in or currently intended for use in, the
Business, including, without limitation, those identified in Section 3.18 of the
Disclosure Schedule, but excluding Seller's Retained Patents.

            "Consumer Trademarks" means all trademarks and all registrations,
applications, and renewals, relating to trademarks, and all logos, company names
and trade names currently owned, used and/or intended to be used by the Seller
(or its Affiliates), the Company or any Subsidiary in connection with the
Business, including, but not limited to, the trademarks listed in Section 3.18
of the Disclosure Schedule, and all goodwill associated with and all rights in
the foregoing.

            "Corning Consumer Products" means Stanadyne Products, pressed glass
ceramic molds to be used for metal consumer products for retail sale, final
water filtration system products for home use (but excluding OEM Component
Products parts of such water filtration systems products) and products
manufactured, distributed and/or sold by the Company and the Subsidiaries for
use primarily in the preparation, cooking, storage, service and enjoyment of
foods and/or beverages, including, but not limited to, glass, glass-ceramic,
ceramic, plastic and metal ovenware, bakeware, cookware, dinnerware, tableware,
tableware accessories, kitchen gadgets; provided, however, that Corning Consumer
Products shall not include Steuben Products, ceramic briquettes, OEM Component
Products for consumer
<PAGE>
                                       4


household appliances, household cooking ovens or ranges, products for lighting,
computers, laboratory science, electronics, medical applications, automobile and
building windows, mirrors, flatglass, television or display applications, liquid
filtration products (other than Stanadyne Products and final water filtration
system products for home use), OEM Component Product parts of water filtration
system products for home use, glass ceramic burner caps, glass ceramic cook
tops, flat glass ceramic stove windows and new products manufactured from flat
glass ceramic by Eurokera, S.N.C. or Keraglass, S.N.C. or their respective
licensees for sale in Europe.

            "Cumulative Gross Margin" means the sum of the Gross Margins in each
of the three years ended December 31, 1998, 1999 and 2000.

            "Disclosure Schedule" means the Disclosure Schedule attached hereto,
dated as of the date hereof, and forming a part of this Agreement.

            "Durable Consumer Products" means Housewares and those products
identified on the attached Exhibit 1.01(a); provided that Durable Consumer
Products will not include such items as are specifically excluded from the
definition of Corning Consumer Products.

            "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended and any regulations promulgated or proposed thereunder.

            "Facility Financing Interests" means all of the rights and
obligations of the Seller and the Company with respect to the Charleroi Facility
and the Greencastle Facility, as evidenced by the documents and instruments set
forth on Section 5.18 of the Disclosure Schedule.

            "Foreign Sales Corporation" means Corning Incorporated Foreign Sales
Corporation.

            "Foreign Subsidiaries" means Corning Canada Inc. (a Canadian
corporation), Corning Australia Pty. Limited (an Australian corporation), CCPC
(Asia) Pte. Ltd. (a Singapore corporation), Mundial Brasil Produtos de Consumo
Ltda. (a Brazilian corporation), CCPC Korea Co. Ltd. (a Korean corporation) and
Iwaki Corning (Malaysia) SDN BHD (a Malaysian corporation).

            "Governmental Authority" means any United States federal, state or
local or any foreign government, governmental, regulatory or administrative
authority, agency or commission or any court, tribunal, or judicial or arbitral
body.

            "Governmental Order" means any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Authority.
<PAGE>
                                       5


            "Greencastle Facility" means all real property, all improvements
thereon and all machinery and equipment used in connection therewith, including
all easements, licenses, rights and appurtenances thereto, owned by or leased or
otherwise made available to the Company comprising its manufacturing facility
located at 1200 South Antrim Way, Greencastle, Franklin County, Commonwealth of
Pennsylvania.

            "Gross Margin" means the difference (as calculated by the Company
and certified by the Company's accountants in accordance with Section 5.23)
between (a) consolidated net sales of the Company and the Subsidiaries, and (b)
cost of sales, in each case as reflected on the 1998, 1999 and 2000 Financial
Statements adjusted as follows. Net sales and cost of sales shall be adjusted to
exclude, to the extent not reflected in Management's Business Plans for 1998,
1999 and 2000 provided to the Purchaser prior to the date hereof and projecting
Cumulative Gross Margin of $710,900,000 (i) any gain or loss associated with the
sale or write-down of assets not in the ordinary course of business, (ii) any
charges or income associated with a restructuring of the Business or a decision
to close, relocate any facility or terminate or relocate any employees
(including severance or other benefits, expense accruals and moving costs
associated with the foregoing), (iii) any one-time costs (or release of reserves
for estimated costs) or income, in each case solely related to the consummation
of the transactions contemplated hereby, including any incentive payments to
employees or any payments pursuant to the Pressware Union Agreement, (iv) any
expenses or income associated with any assets acquired or divested not in the
ordinary course of business, (v) any one-time costs incurred with respect to the
implementation of independent financial systems and (vi) the impact of any
changes in accounting policies or classifications.

            "Housewares" means Corning Consumer Products and (i) products used
primarily in the preparation, cooking, storage, service and enjoyment of food or
beverages such as: (A) glass, ceramic, metal, plastic or other bakeware,
cookware, dinnerware, tableware, and ovenware; (B) crystal and china dinnerware,
tableware, and decorative objects or accessories; (C) kitchen and table
utensils, cutlery and gadgets; (D) food storage containers; (E) portable
appliances; (F) table linen and oven mitts; (ii) furnishings for the home; and
(iii) the products listed on the attached Exhibit 1.01(b); provided, however,
that Housewares shall not include such items as are specifically excluded from
the definition of Corning Consumer Products.

            "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.

            "Income Tax or Income Taxes" means any federal, state, local or
foreign tax, fee, assessment, levy, duty, tariff or other charges of any kind
imposed by a governmental taxing authority and (a) based upon, measured by, or
calculated with respect to, net income or net receipts, proceeds or profits, or
(b) based upon, measured by, or calculated with respect to multiple bases
(including, but not limited to corporate franchise or occupation taxes) if such
<PAGE>
                                       6


tax may be based upon, measured by, or calculated with respect to one or more
bases described in clause (a) above, in each case together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto.

            "Indebtedness" means (a) indebtedness for borrowed money, (b)
obligations evidenced by bonds, notes, debentures or other similar instruments
or by letters of credit, including purchase money obligations or other
obligations relating to the deferred purchase price of property (other than
trade payables incurred in the ordinary course of business), (c) obligations as
lessee under leases which have been or should have been, in accordance with U.S.
GAAP, recorded as capital leases, (d) obligations under direct or indirect
guaranties in respect of Liabilities of others, (e) obligations in respect of
outstanding or unpaid checks or drafts or overdraft obligations and (f) accrued
interest, if any, on and all other amounts owed in respect of any of the
foregoing.

            "IRS" means the Internal Revenue Service of the United States.

            "knowledge" means, with respect to the Seller, the actual knowledge
of Peter F. Campanella, Clark S. Kinlin, Twilver Gordon, Gary P. Vogt, Kim
Frock, Thomas C. O'Brien, Katherine A. Asbeck, James B. Flaws, John L. Cherill,
Kirk P. Gregg, Michael Donnelly, Kevyn Hennessey and Paul R. A. Burke; provided,
however, that the actual knowledge of Kirk P. Gregg, Michael Donnelly and Kevyn
Hennessey shall be attributed to the knowledge of the Seller only with respect
to employee benefits matters, the actual knowledge of John L. Cherill shall be
attributed to the knowledge of the Seller only with respect to environmental
matters and the actual knowledge of Paul R. A. Burke shall be attributed to the
knowledge of the Seller only with respect to intellectual property matters.

            "Leased Real Property" means the real property leased by the Company
or any Subsidiary, as tenant, together with, to the extent leased by the Company
or any Subsidiary, all buildings and other structures, facilities or
improvements currently or hereafter located thereon, all fixtures, systems,
equipment and items of personal property of the Company or any Subsidiary
attached or appurtenant thereto, and all easements, licenses, rights and
appurtenances relating to the foregoing.

            "Liabilities" means any and all debts, liabilities and obligations,
whether accrued or fixed, absolute or contingent, matured or unmatured or
determined or determinable.

            "Material Adverse Effect" means any change in, or effect on, the
Company, the Subsidiaries or the Business that is or could reasonably be
expected to be materially adverse to the business, properties, results of
operations or financial condition of the Company and the Subsidiaries, taken as
a whole.
<PAGE>
                                       7


            "Net Worth" means Total Assets, other than, to the extent included
in Total Assets (a) cash and cash equivalents, (b) deferred Tax assets and (c)
any assets retained or transferred by the Seller pursuant to Section 5.14, minus
Total Liabilities other than, to the extent included in Total Liabilities (i)
any Indebtedness, (ii) deferred Tax liabilities and (iii) any liabilities
retained by the Seller pursuant to Section 5.14.

            "Other Consumer Products" means consumer products for retail sale.

            "1997 Balance Sheet" means the audited consolidated balance sheet of
the Company and the Subsidiaries as of December 31, 1997, a copy of which is
attached hereto as Exhibit 1.01(c).

            "1997 Balance Sheet Date" means December 31, 1997.

            "1998, 1999 and 2000 Financial Statements" means each of the audited
consolidated statements of income of the Company and the Subsidiaries for the
years ended December 31, 1998, December 31, 1999 and December 31, 2000
(including any notes thereto), each prepared in accordance with U.S. GAAP.

            "OEM Component Products" means original equipment manufacturer's
component products.

            "Owned Real Property" means the real property owned by the Company
or any Subsidiary, together with all buildings and other structures, facilities
or improvements currently or hereafter located thereon, all fixtures, systems,
equipment and items of personal property of the Company or any Subsidiary
attached or appurtenant thereto and all easements, licenses, rights and
appurtenances relating to the foregoing.

            "Permitted Encumbrances" means: (a) liens for Taxes and assessments
not yet payable; (b) liens for Taxes, assessments and charges and other claims,
the validity of which are being contested in good faith; (c) with respect to
Section 3.09 (b) only, imperfections of title, liens, security interests and
other encumbrances the existence of which, individually or in the aggregate,
would not have a Material Adverse Effect; (d) inchoate mechanics' and
materialmen's liens for construction in progress; and (e) workmen's,
repairmen's, warehousemen's and carriers' liens arising in the ordinary course
of Business.

            "Person" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as any
syndicate or group that would be deemed to be a person under Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended.
<PAGE>
                                       8


            "Purchaser's Accountants" means Deloitte & Touche LLP, independent
accountants of the Purchaser.

            "Purchaser Group" means the Purchaser and any Affiliate of the
Purchaser with which the Purchaser files a consolidated, combined or unitary Tax
Return.

            "Real Property" means the Leased Real Property and the Owned Real
Property.

            "Revolving Credit Agreement" means the Amended and Restated
Revolving Credit Agreement between the Company and the Seller, dated as of March
28, 1997.

            "Seller Group" means the Seller and any Affiliate of the Seller with
which the Seller files a consolidated, combined or unitary Tax Return.

            "Seller's Accountants" means Price Waterhouse LLP, independent
accountants of the Seller.

            "Seller's Future Patents" means each patent or patent application
claiming a priority date after the Closing but prior to the fifth anniversary of
the Closing and that claims an invention that is an evolutionary improvement in,
and not a replacement for, the subject matter of Seller's Retained Patents.

            "Seller's Retained Patents" means all patents, and all applications,
reissues, renewals, continuations and extensions relating to any patents, owned
by the Seller prior to the Closing and that pertain or relate to the Business
but have potential applicability outside of the Business, as identified in
Section 3.18 of the Disclosure Schedule.

            "Stanadyne Products" means glass housings used in fuel systems
generally of the type heretofore sold by the Company to the Stanadyne Automotive
Corporation.

            "Steuben Products" means high-end crystal glassware sold under the
Steuben trademark.

            "Subsidiaries" means Revere Ware Corporation, a Delaware
corporation, and the Foreign Subsidiaries.

            "subsidiary" or "subsidiaries" means any Person with respect to
which a specified Person (or a subsidiary thereof) owns a majority of the common
stock (or similar voting securities) or has the power to vote or direct the
voting of sufficient securities to elect a majority of the directors or
individuals exercising similar functions.
<PAGE>
                                       9


            "Tax" or "Taxes" means any and all taxes, fees, assessments, levies,
duties, tariffs, imposts, and other charges of any kind (together with any and
all interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any governmental taxing authority including, without
limitation: taxes or other charges on or with respect to income, franchises,
windfall or other profits, gross receipts, property, assets, sales, use, capital
stock, payroll, employment, social security, workers' compensation, unemployment
compensation, severance, occupation, or net worth; taxes or other charges in the
nature of excise, withholding, ad valorem, stamp, transfer, estimated, value
added, or gains taxes; license, registration and documentation fees; and
customs' duties, tariffs, and similar charges.

            "Tax Return" means any return, declaration, report, claim for refund
or information return or statement relating to Taxes filed with a taxing
authority, including any schedule or attachment thereto, and including any
amendment thereof.

            "Total Assets" means the total assets reflected on the 1997 Balance
Sheet or the Closing Balance Sheet, as the case may be.

            "Total Liabilities" means the total liabilities reflected on the
1997 Balance Sheet or the Closing Balance Sheet, as the case may be.

            "U.S. GAAP" means United States generally accepted accounting
principles.

            SECTION 1.02. Other Defined Terms. The following terms shall have
the meanings defined for such terms in the sections set forth below:

            Term:                            Section:
            -----                            --------
            Acquired Employees               6.01(a)
            Administrative Services        
                  Agreement                  5.06
            Allocation                       7.07(b)
            Benefit Maintenance Period       6.01(c)
            Benefit Plan                     3.14(a)
            Canadian Plan                    3.14(e)
            Borden                           Preamble
            Cash Dividend                    2.01
            Closing                          2.03
            Closing Date                     2.03
            Code section 338(h)(10)        
                 Election                    7.07(a)
            Company                          Preamble
            Company Benefit Plan             3.14(a)
<PAGE>                                  
                                       10


            Company's Accountants            5.23(a)
            Compensation                     6.01(b)
            Continuation Period              6.01(b)
            Corning 401(k) Plans             6.02(b)(i)
            Corning Pension Plan             6.02(a)(i)
            CORNING WARE and               
                  PYROCERAM                
                  License Agreement          5.09(b)(i)
            Department                       3.14(a)
            Diversified Company              5.17
            Elections                        7.07(a)
            Employee                         3.14(a)
            Employee Agreement               3.14(a)
            Encumbrances                     3.03
            Environmental Claims             3.17
            Environmental Law                3.17
            Environmental Permits            3.17(a)
            Environmental Report             3.17
            ERISA Affiliate                  3.14(a)
            Existing Benefit Plans           6.02(c)(i)
            Financial Statements             3.07
            Financing                        2.01
            Goldman, Sachs                   3.20
            Greenville Supply              
                  Agreement                  5.11
            Hazardous Materials              3.17
            HMO                              3.14(j)
            Hourly Employees                 6.02(a)(i)
            Indemnified Party                9.04(a)
            Indemnifying Party               9.04(a)
            Independent Accounting Firm      2.04(b)(ii)
            Key Employee Retention         
                  Program                    6.02(e)
            Leased Employees                 6.02(d)(iii)
            Losses                           9.02(a)
            Material Contracts               3.19(a)
            Multi-Employer Plan              3.14(a)
            1988 Guaranty                    5.18
            1992 Guaranty                    5.18
            New Company Plan                 3.14(a)
            New Defined Benefit Plan         6.02(a)(ii)
            New 401(k) Plans                 6.02(b)(ii)
            Non-Competition Period           5.17
<PAGE>                                     
                                       11
                                           
                                           
            Option Exercise Period           6.04
            Patent and Know-How            
                  License Agreement          5.09(d)
            PBGC                             3.14(a)
            PCBs                             3.17
            Pension Plan                     3.14(a)
            Post-Closing Tax Detriment       7.02(a)(ii)
            Pre-Closing Tax Detriment        7.02(a)(ii)
            Pre-Closing Workers and          
                  Products Claims            5.14(c)
            Pressware Union Agreement        6.02(d)(ii)
            Purchaser                        Preamble
            Purchaser Indemnified Party      9.03(a)
            Purchaser Returns                7.04(a)
            PYREX License Agreement          5.09(b)(ii)
            Retained Names and Marks         5.09(e)
            Revere Hourly Employees          6.02(a)(ii)
            Revere Plan                      6.02(a)(iii)
            Revere Post-Retirement Plan      6.02(c)(i)
            Seller                           Preamble
            Seller Benefit Plan              3.14(a)
            Seller Indemnified Party         9.02(a)
            Seller Insurance Policies        5.22
            Separate Return Tax Liability    7.03(b)
            Seller Returns                   7.04(a)
            Share Purchase Price             2.02
            Shared Facility Agreement        5.10(c)
            Shares                           Recitals
            Stockholders Agreement           2.03(d)
            Systems Plan                     5.24
            Tangible Property                3.13(d)
            Technology Support               
                  Agreement                  5.12
            Temporary CORNING                
                  License Agreement          5.09(e)
            Termination Benefits             6.01(c)
            Transition Services Agreement    5.13
            Welfare Plan                     3.14(a)
<PAGE>
                                       12


                                   ARTICLE II

                                PURCHASE AND SALE

            SECTION 2.01. Consummation of Financing; Dividend. Upon the terms
and subject to the conditions of this Agreement, (a) prior to the Closing, the
Company may declare as a dividend payable to its stockholder of record as of the
day prior to the Closing Date, and pay to such stockholder on the Closing Date
an amount in cash equal to the Cash Dividend Amount (the "Cash Dividend"), and
(b) at the Closing, the Seller shall cause the Company to borrow, and the
Purchaser shall lend (or cause one of more of its Affiliates to lend), funds to
the Company on the terms previously described to the Seller (the "Financing") in
the amounts set forth on Exhibit 2.01 hereto, the proceeds of which (net of any
fees, expenses and other costs required to be paid by the Company in connection
with the Financing and the transactions contemplated hereby), together with the
proceeds of the preferred stock referred to in Section 2.03(b), shall be
sufficient to pay the Cash Dividend Amount.

            SECTION 2.02. Purchase and Sale of Acquired Shares. Upon the terms
and subject to the conditions of this Agreement, at the Closing, the Seller
shall sell to the Purchaser, and the Purchaser shall purchase from the Seller,
the Acquired Shares for $110,400,000 in the aggregate (the "Share Purchase
Price"). The Share Purchase Price shall be payable as provided in Section
2.03(c).

            SECTION 2.03. Closing. Upon the terms and subject to the conditions
of this Agreement, the consummation of the transactions contemplated by this
Agreement shall take place at a closing (the "Closing") to be held at the
offices of Shearman & Sterling, 599 Lexington Avenue, New York, New York at
10:00 A.M. New York time, on the later to occur of (i) the fifth Business Day
following the satisfaction of the conditions contained in Sections 8.01(b) and
8.02(b), or (ii) April 1, 1998, or at such other place or at such other time or
on such other date as the Seller and the Purchaser mutually agree upon in
writing (the day on which the Closing takes place being the "Closing Date"). At
the Closing, the following will take place:

            (a) The Company shall consummate the Financing.

            (b) The Company shall issue to the Purchaser or one of its
      Affiliates shares of preferred stock having an aggregate liquidation
      preference of $30,000,000 and other terms substantially as set forth in
      Exhibit 2.03(b) hereto in exchange for $30,000,000.

            (c) Immediately following the consummation of the Financing and the
      receipt by the Company of the proceeds therefrom, the Company will pay the
      Cash Dividend declared pursuant to Section 2.01(a), by wire transfer in
      immediately
<PAGE>
                                       13


      available funds to an account or accounts designated by the Seller at
      least two Business Days before the Closing Date in a written notice to the
      Company.

            (d) Immediately following the payment of the Cash Dividend by the
      Company to the Seller in accordance with Section 2.03(c), the Purchaser
      will pay to the Seller the Share Purchase Price, by wire transfer in
      immediately available funds to an account or accounts designated by the
      Seller at least two Business Days before the Closing Date in a written
      notice to the Purchaser. The Seller will deliver to the Purchaser stock
      certificates evidencing the Acquired Shares duly endorsed in blank or
      accompanied by stock powers duly executed in blank.

            (e) The Company and its Subsidiaries shall have repaid or shall
      repay all third-party Indebtedness of the Company or any Subsidiaries,
      other than the Facility Financing Interests, and all Indebtedness of the
      Company or any Subsidiaries owing to the Seller or any of its other
      Affiliates shall be repaid or otherwise discharged as described in Section
      5.14(a) or otherwise in a manner that does not cause any adverse tax
      consequences to the Company or any of the Subsidiaries.

            (f) The Seller, the Company and the Purchaser shall enter into a
      Stockholders Agreement (the "Stockholders Agreement"), substantially in
      the form attached hereto as Exhibit 2.03(f).

            SECTION 2.04. Adjustment of Cash Dividend Amount. The Cash Dividend
Amount shall be subject to adjustment as specified in Section 2.04(c):

            (a) Closing Balance Sheet. As promptly as practicable, but in any
      event within sixty calendar days following the Closing Date, the Seller
      shall prepare and deliver to the Purchaser the Closing Balance Sheet,
      together with a report thereon of the Seller's Accountants stating that
      the Closing Balance Sheet fairly presents the consolidated financial
      position of the Company at the Closing Date in conformity with U.S. GAAP
      as in effect on the date hereof applied on a basis consistent with the
      preparation of the 1997 Balance Sheet. For the purposes of the preparation
      of the Closing Balance Sheet, the Financing, the payment of the Cash
      Dividend Amount and the payments to be made to or on behalf of the
      Purchaser or any of its Affiliates (in aggregate amounts previously
      described to the Seller) in connection with the Closing shall be excluded
      in calculating Net Worth.

            (b) Disputes. (i) Subject to clause (ii) of this Section 2.04(b),
      the Closing Balance Sheet delivered by the Seller to the Purchaser shall
      be deemed to be and shall be final, binding and conclusive on the parties
      hereto.
<PAGE>
                                       14


                  (ii) The Purchaser may dispute any amounts relevant to Section
            2.04(c) reflected on the Closing Balance Sheet, but only on the
            basis that the amounts reflected on the Closing Balance Sheet were
            not arrived at in conformity with U.S. GAAP applied on a basis
            consistent with the preparation of the 1997 Balance Sheet; provided,
            however, that the Purchaser shall have notified the Seller and the
            Seller's Accountants in writing of each disputed item, specifying
            the amount thereof in dispute and setting forth, in reasonable
            detail, the basis for such dispute, within 30 Business Days of the
            Seller's delivery of the Closing Balance Sheet to the Purchaser. In
            the event of such a dispute, the Seller's Accountants, together with
            the Seller, and the Purchaser's Accountants, together with the
            Purchaser, shall attempt to reconcile their differences, and any
            resolution by them as to any disputed amounts shall be final,
            binding and conclusive on the parties hereto. If the Seller's
            Accountants, together with the Seller, and the Purchaser's
            Accountants, together with the Purchaser, are unable to resolve any
            such dispute within 50 Business Days of the Seller's delivery of the
            Closing Balance Sheet to the Purchaser and the items remaining in
            dispute (excluding any item relating to Indebtedness or cash) are
            such that the Cash Dividend Amount would be adjusted by at least
            $250,000, the Seller's Accountants and the Purchaser's Accountants
            shall submit the items remaining in dispute for resolution to Arthur
            Andersen & Co. (or, if such firm shall decline to act or is not, at
            the time of such submission, independent of the Seller, the Company
            and the Purchaser, to another independent accounting firm of
            international reputation mutually acceptable to the Seller and the
            Purchaser) (either Arthur Andersen & Co. or such other accounting
            firm being referred to herein as the "Independent Accounting Firm"),
            which shall, within 40 Business Days after such submission,
            determine and report to the Seller and the Purchaser upon such
            remaining disputed items, and such report shall be final, binding
            and conclusive on the Seller and the Purchaser. The fees and
            disbursements of the Independent Accounting Firm shall be allocated
            between the Seller and the Purchaser in the same proportion that the
            aggregate amount of such remaining disputed items so submitted to
            the Independent Accounting Firm that is unsuccessfully disputed by
            each such party (as finally determined by the Independent Accounting
            Firm) bears to the total amount of such remaining disputed items so
            submitted. Any amounts payable pursuant to this Section 2.04 which
            are not in dispute shall be paid in accordance with paragraph (c) of
            this Section 2.04, notwithstanding that other amounts may remain in
            dispute.

                  (iii) In acting under this Agreement, the Independent
            Accounting Firm shall be entitled to the privileges and immunities
            of arbitrators.

            (c) Cash Dividend Amount Adjustment. The Closing Balance Sheet shall
      be deemed final for the purposes of this Section 2.04(c) upon the earliest
      of (A) the failure
<PAGE>
                                       15


      of the Purchaser to notify the Seller of a dispute within 30 Business Days
      of the Seller's delivery of the Closing Balance Sheet to the Purchaser,
      (B) the resolution of all disputes, pursuant to Section 2.04(b)(ii), by
      the Purchaser's Accountants and the Seller's Accountants and (C) the
      resolution of all disputes, pursuant to Section 2.04(b)(ii), by the
      Independent Accounting Firm. Within three Business Days of the Closing
      Balance Sheet being deemed final, a Cash Dividend Amount adjustment or
      adjustments shall be made as follows:

                  (i) in the event that the amount of Net Worth calculated with
            respect to the Closing Balance Sheet exceeds the amount of Net Worth
            calculated with respect to the 1997 Balance Sheet, then the Cash
            Dividend Amount shall be adjusted upward in an amount equal to such
            excess;

                  (ii) in the event that the amount of Net Worth calculated with
            respect to the Closing Balance Sheet is less than the amount of Net
            Worth calculated with respect to the 1997 Balance Sheet, then the
            Cash Dividend Amount shall be adjusted downward in an amount equal
            to such deficiency;

                  (iii) in the event that the amount of cash and cash
            equivalents reflected on the Closing Balance Sheet is greater than
            zero, then the Cash Dividend Amount (as adjusted pursuant to clause
            (i) or (ii) of this Section 2.04(c)) shall be adjusted upward in an
            amount equal to such excess;

                  (iv) in the event that the amount of Indebtedness reflected on
            the Closing Balance Sheet is greater than $10,300,000, then the Cash
            Dividend Amount (as adjusted pursuant to clause (i), (ii) or (iii)
            of this Section 2.04(c)) shall be adjusted downward in an amount
            equal to such excess; and

                  (v) in the event that the amount of Indebtedness reflected in
            the Closing Balance Sheet is less than $10,300,000, then the Cash
            Dividend Amount (as adjusted pursuant to clause (i), (ii) or (iii)
            of this Section (c)) shall be adjusted upward in an amount equal to
            such difference.

            The payments to be made by the Seller or the Company pursuant to
      this Section 2.04(c) shall be made after giving effect to all the
      adjustments set forth in clauses (i) or (ii) and (iii) or (iv) or (v)
      above, and, in the case of payments to be made by the Seller, shall be
      made, within three Business Days of the determination of any such
      adjustment or adjustments, to the Company by wire transfer in immediately
      available funds to an account or accounts designated by the Company, and,
      in the case of payments to be made by the Company, shall be made, within
      three Business Days of the determination of any such adjustment or
      adjustments, to the Seller by wire transfer in immediately available funds
      to an account or accounts designated by the Seller.
<PAGE>
                                       16


            (d) Interest. Any payment required to be made by the Seller or the
      Company pursuant to Section 2.04(c) shall bear interest from the Closing
      Date through the date of payment on the basis of the average daily rate of
      interest publicly announced by Citibank, N.A. in New York, New York from
      time to time as its base rate from the Closing Date to the date of such
      payment.

                                  ARTICLE III

                 REPRESENTATIONS AND WARRANTIES OF THE SELLER

            The Seller represents and warrants to the Purchaser as follows:

            SECTION 3.01. Incorporation of the Seller and Authority of the
Seller and the Company. The Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of New York and has
all necessary corporate power and authority to enter into this Agreement, to
carry out its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by each of the
Seller and the Company, the performance by each of the Seller and the Company of
its obligations hereunder and the consummation by each of the Seller and the
Company of the transactions contemplated hereby have been duly authorized by all
requisite corporate action on the part of the Seller and the Company,
respectively. This Agreement has been duly executed and delivered by the Seller
and the Company, and (assuming due authorization, execution and delivery by the
Purchaser) constitutes a legal, valid and binding obligation of each of the
Seller and the Company enforceable against each of them in accordance with its
terms.

            SECTION 3.02. Organization, Authority and Qualification of the
Company. The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware and has the corporate
power and authority to own, operate or lease the properties and assets now
owned, operated or leased by it. The Company is duly qualified as a foreign
corporation to do business, and is in good standing, in each jurisdiction in
which the character of the properties owned or leased by it or the operation of
its business makes such qualification necessary except for such failures which,
individually or in the aggregate, would not have a Material Adverse Effect.

            SECTION 3.03. Capital Stock of the Company. There are no options,
warrants, convertible securities or other rights, agreements, arrangements or
commitments relating to the capital stock of, or other equity interest in, the
Company obligating the Seller or the Company to issue, sell, transfer or
otherwise dispose of or sell any shares of capital stock of, or other equity
interest in, the Company. The Company has issued and outstanding 1,000 Shares,
which constitute all the authorized, issued and outstanding shares of capital
stock of 
<PAGE>
                                       17


the Company and are owned of record and beneficially solely by the Seller. The
Shares have been duly authorized and validly issued and are fully paid and
nonassessable and were not issued in violation of any preemptive rights. The
Seller owns the Shares free and clear of all pledges, security interests and all
other liens, encumbrances and adverse claims. (collectively, "Encumbrances").
Upon consummation of the transactions contemplated by Section 2.03(c), the
Purchaser will acquire valid title to the Acquired Shares free and clear of all
Encumbrances, other than any Encumbrances imposed in connection with the
Financing. There are no voting trusts, stockholder or registration rights
agreements, proxies or other agreements or understandings in effect with respect
to the voting or transfer of any of the Shares.

            SECTION 3.04. Subsidiaries. Section 3.04 of the Disclosure Schedule
sets forth, with respect to each Subsidiary, its type of entity, the
jurisdiction of its incorporation or organization, its authorized capital stock,
partnership capital or equivalent, the number and type of its issued and
outstanding shares of capital stock, partnership interests or similar ownership
interests and the Company's current ownership of such shares, partnership
interests or similar ownership interests. Except as set forth in Section 3.04 of
the Disclosure Schedule, each of the outstanding shares of capital stock of each
of the Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable and all such shares are owned by the Company or another wholly
owned Subsidiary and are owned free and clear of all Encumbrances of any nature
whatsoever. Except as set forth in Section 3.04 of the Disclosure Schedule, the
Company and the Subsidiaries do not own any equity interest in any Person. As of
the date of this Agreement, the Company owns shares of capital stock of Foreign
Sales Corporation which, prior to the Closing Date, the Company shall transfer
to the Seller, as provided in Section 5.15. Each Subsidiary is duly organized
and validly existing under the laws of its respective jurisdiction of
incorporation and has the requisite power and authority to own, operate or lease
the properties and assets owned, operated or leased by such Subsidiary and to
carry on its business in all material respects as currently conducted by such
Subsidiary, except for such failures which, individually or in the aggregate,
would not have a Material Adverse Effect.

            SECTION 3.05. No Conflict. Assuming that all consents, approvals,
authorizations and other actions described in Section 3.06 have been obtained
and all filings and notifications listed in Section 3.06 of the Disclosure
Schedule have been made, and except as may result from any facts or
circumstances relating solely to the Purchaser or as described in Section 3.05
of the Disclosure Schedule, the execution, delivery and performance of this
Agreement by the Seller and the Company do not and will not (a) violate or
conflict in any material respect with the Certificate of Incorporation or
By-laws of the Seller or the Company, (b) conflict with or violate any law,
rule, regulation order, writ, judgment, injunction, decree, determination or
award applicable to the Seller, the Company, the Business or any Subsidiary, or
(c) result in any breach of, constitute a default (or event which with the
giving of notice or lapse of time, or both, would become a default) under, or
give to others any rights of 
<PAGE>
                                       18


termination, amendment, acceleration or cancellation of, or, except for liens or
other encumbrances imposed in connection with the Financing or the Stockholders
Agreement and applicable securities laws, result in the loss of any benefit to
the Company or any Subsidiary or the creation of any lien or other encumbrance
on the Shares or on any of the assets or properties of the Company or any
Subsidiary pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument to which the
Seller, the Company or any Subsidiary is a party or by which any of such assets
or properties is bound or affected, except, in the case of clause (b) or (c), as
would not, individually or in the aggregate, have a Material Adverse Effect or
prevent or materially delay the consummation by the Seller or the Company of the
transactions contemplated hereby.

            SECTION 3.06. Consents and Approvals. The execution, delivery and
performance of this Agreement by the Seller and the Company does not and will
not require any consent, approval, authorization or other order of, action by,
filing with or notification to, any Governmental Authority, except (a) as
described in Section 3.06 of the Disclosure Schedule, (b) the notification and
waiting period requirements of the HSR Act, (c) where failure to obtain such
consent, approval, authorization or action, or to make such filing or
notification, individually or in the aggregate, would not prevent or materially
delay the consummation by the Seller or the Company of the transactions
contemplated by this Agreement and would not have a Material Adverse Effect and
(d) as may be necessary as a result of any facts or circumstances relating
solely to the Purchaser.

            SECTION 3.07. Financial Information; Inventory; Receivables. (a)
Financial Information. The Seller has delivered to the Purchaser true and
correct copies of the audited consolidated balance sheets of the Company and the
Subsidiaries as of December 31, 1997, 1996 and 1995 and the related audited
consolidated statements of income and cash flows (all such financial statements
being the "Financial Statements"). The Financial Statements present fairly in
all material respects the consolidated financial condition and results of
operations of the Company and the Subsidiaries as of such dates or for the
periods covered thereby and have been prepared in accordance with U.S. GAAP
applied on a basis consistent with the past practices of the Seller and the
Company.

            (b) Inventory. All of the inventories of the Company and the
Subsidiaries are suitable, usable or salable in the ordinary course of business
for the purposes for which intended, except to the extent of normal
obsolescence, and except to the extent written down to realizable market value
prior to or as of the Closing Date or for which adequate reserves have been
provided in accordance with U.S. GAAP on the 1997 Balance Sheet consistent with
past practice.

            (c) Receivables. All accounts and notes receivable of the Company
and the Subsidiaries reflected in the 1997 Balance Sheet or arising since the
1997 Balance Sheet Date have arisen in the ordinary course of business of the
Company and the Subsidiaries from bona
<PAGE>
                                       19


fide transactions and represent valid obligations due to the operations of the
Company or the Subsidiaries in accordance with their terms, subject to the
reserve for bad debt set forth in the 1997 Balance Sheet.

            SECTION 3.08. Absence of Undisclosed Liabilities. Except with
respect to the matters addressed in Section 3.16 or Article VII (which shall be
governed solely by the terms of such Section 3.16 or Article VII), there are no
Liabilities of the Company or any Subsidiary, other than Liabilities (i)
reflected or reserved against on the 1997 Balance Sheet, (ii) disclosed in
Section 3.08(a) of the Disclosure Schedule or (iii) incurred since the 1997
Balance Sheet Date in the ordinary course of business consistent with past
practice, and which do not, individually or in the aggregate, have a Material
Adverse Effect.

            SECTION 3.09. Absence of Certain Changes or Events. Since the 1997
Balance Sheet Date, except as disclosed in Section 3.09 of the Disclosure
Schedule, the Business has been conducted in the ordinary course consistent with
past practice. As amplification and not limitation of the foregoing, since the
1997 Balance Sheet Date, and except as set forth in Section 3.09 of the
Disclosure Schedule or as contemplated by this Agreement, there has not been:

            (a) any damage, destruction or loss to any of the assets or
      properties of the Company or any Subsidiary which, individually or in the
      aggregate, has had a Material Adverse Effect;

            (b) any security interests, pledges, liens or other encumbrances
      created on any properties or assets (whether tangible or intangible) of
      the Company or any Subsidiary, other than (i) Permitted Encumbrances, (ii)
      security interests, pledges, liens and other encumbrances that will be
      released at or prior to the Closing and (iii) security interests, pledges,
      liens or other encumbrances on assets having a value not exceeding
      $500,000 in the aggregate;

            (c) except for sales of inventory and obsolete fixed assets and the
      transfer of cash in payment of trade payables, in each case, in the
      ordinary course of business, any sale, assignment, transfer, lease or
      other disposition or agreement to sell, assign, transfer, lease or
      otherwise dispose of any of the fixed assets of the Company or any
      Subsidiary having an aggregate value exceeding $500,000;

            (d) any acquisition (by merger, consolidation or acquisition of
      stock or assets) by the Company or any Subsidiary of any corporation,
      partnership or other business organization or division thereof;

            (e) except in the ordinary course of business, (i) any incurrence by
      the Company or any Subsidiary of any indebtedness for borrowed money, (ii)
      any issuance

<PAGE>
                                       20


      by the Company or any Subsidiary of any debt securities or (iii) any
      assumption, granting, guarantee or endorsement or other accommodation or
      arrangement making the Company or any Subsidiary responsible for the
      Liabilities of any Person (other than the Company or another Subsidiary,
      as the case may be), in the case of (i), (ii) and (iii) above, having an
      aggregate value exceeding $500,000;

            (f) any material change in any method of accounting or accounting
      practice used by the Company or any Subsidiary, other than such changes
      required by U.S.
      GAAP;

            (g) any event that, individually or together with all other events,
      has had a Material Adverse Effect;

            (h) any action which, if it had been taken after the date hereof,
      would have required the consent of the Purchaser under Section 5.01(b)
      hereof; or

            (i) any agreement to take any actions specified in this Section
      3.09.

            SECTION 3.10. Absence of Litigation. Except as set forth in Section
3.10 of the Disclosure Schedule (a) there are no material claims, actions,
proceedings or investigations pending or, to the knowledge of the Seller,
threatened against or involving the Seller, the Company or any Subsidiary or any
of the assets or properties of the Company or any Subsidiary, before any
Governmental Authority and (b) the Company, the Subsidiaries and their
respective assets and properties are not subject to any Governmental Order. The
matters set forth in Section 3.10 of the Disclosure Schedule, individually or in
the aggregate, have not had a Material Adverse Effect.

            SECTION 3.11. Compliance with Laws. Neither the Company nor the
Subsidiaries are in violation of any law, rule, regulation, order, judgment or
decree applicable to the Company or any Subsidiary or by which any of the
properties of the Company or any Subsidiary is bound, except (a) as set forth in
Section 3.11 of the Disclosure Schedule and (b) where such violations,
individually or in the aggregate, would not have a Material Adverse Effect.
Except as set forth in Section 3.11 of the Disclosure Schedule, the Company and
any Subsidiaries have not, in the last three years, received any written
communication from any Governmental Authority that alleges that the Company or
such Subsidiary is not in compliance in any material respect with any material
law, rule, regulation, ordinance, order, judgment or decree that has not been
resolved.

            SECTION 3.12. Licenses and Permits. Except as set forth in Section
3.12 of the Disclosure Schedule, the Company and the Subsidiaries have all
governmental licenses, permits and authorizations necessary to conduct the
Business, except for such governmental licenses, permits and authorizations the
absence of which, individually or in the aggregate, 

<PAGE>
                                       21


would not have a Material Adverse Effect. None of the Seller, the Company or any
Subsidiary has, within the last two years, received written notice or otherwise
has knowledge that any Governmental Authority intends to cancel or terminate any
material license, permit, certificate or other authorization required to carry
on the Business as currently conducted.

            SECTION 3.13. Real Property; Tangible Property. (a) Section 3.13(a)
of the Disclosure Schedule sets forth a list of all the Owned Real Property. The
Company and the Subsidiaries have good, valid, marketable and insurable title in
fee simple to the Owned Real Property, free and clear of all liens, security
interests and other encumbrances, except (i) as disclosed in Section 3.13(a) of
the Disclosure Schedule and (ii) Permitted Encumbrances.

            (b) Section 3.13(b) of the Disclosure Schedule sets forth a list of
all Leased Real Property. Except as described in Section 3.13(b) of the
Disclosure Schedule, the Seller has made available to the Purchaser true and
complete copies of all leases and subleases relating to the Leased Real
Property. The Company and the Subsidiaries have good marketable and insurable
leasehold estates in the Leased Real Property, free and clear of all liens,
security interests and other encumbrances, except Permitted Encumbrances. Except
as disclosed in Section 3.13(b) of the Disclosure Schedule or as would not,
individually or in the aggregate, have a Material Adverse Effect, each such
lease or sublease is legal, valid, binding and enforceable and in full force and
effect, and will not cease to be legal, valid, binding and enforceable and in
full force and effect as a result of the consummation of the transactions
contemplated by this Agreement. To the knowledge of the Seller, no party to any
such lease or sublease is in material breach or default thereunder.

            (c) Except as set forth on Section 3.13(c) of the Disclosure
Schedule, (i) none of the Seller, the Company or any Subsidiary has, within the
last two years, received written notice of any pending or threatened
condemnation or eminent domain proceedings or their local equivalent that would
materially affect the Owned Real Property or the Leased Real Property, (ii) the
Owned Real Property and Leased Real Property, the use and occupancy thereof by
the Company and the Subsidiaries, and the conduct of the Business thereon and
therein does not violate in any material respect any deed restrictions,
applicable law consisting of building codes, zoning, subdivision or other land
use or similar laws the violation of which would materially adversely affect the
use, value or occupancy of any such property or the conduct of the Business
thereon, (iii) none of the Seller, the Company or any Subsidiary has, within the
last two years, received written notice of a material violation of the
restrictions or laws described in the foregoing clause (ii), and (iv) none of
the structures or improvements on any of the Leased Real Property or Owned Real
Property encroaches upon real property of another person, and no structure or
improvement of another person encroaches upon any of the Leased Real Property or
Owned Real Property, except for any such encroachment that would not materially
adversely affect the use, value or occupancy of any such property.
<PAGE>
                                       22


            (d) Except as set forth in Section 3.13(d) of the Disclosure
Schedule, the buildings, facilities, machinery, equipment, furniture, leasehold
and their improvement, fixtures, vehicles, structures, and related capitalized
items and other tangible property relating to the Business (the "Tangible
Property") are in good operating condition and repair, free (in the case of
buildings or structures located on the Owned Real Property or Leased Real
Property) of any material structural or engineering defects, and, subject to
normal wear and tear and continued repair and replacement in accordance with
past practice, are suitable for their intended use. During the past five years
there has not been any significant interruption of the operations of the
Business due to inadequate maintenance of the Tangible Property.

            SECTION 3.14. Employee Benefit and Labor Matters.

            (a) Definitions. For purposes of this Agreement, the following terms
shall have the meanings set forth below:

            "Benefit Plan" means each plan, program, policy payroll practice,
      contract, agreement or other arrangement providing for compensation,
      retirement benefits, severance, termination pay, performance awards, stock
      or stock-related awards, fringe benefits or other employee benefits of any
      kind, whether formal or informal, funded or unfunded, written or oral and
      whether or not legally binding, including, without limitation, each
      "employee benefit plan", within the meaning of Section 3(3) of ERISA and
      each "multi-employer plan" within the meaning of Section 3(37) of
      4001(a)(3) of ERISA.

            "Company Benefit Plan" means (i) the Revere Plan and the Revere
      PostRetirement Plan (as such terms are defined in Article VI), (ii) any
      Benefit Plan sponsored, maintained or contributed to exclusively for the
      benefit of any current or former employee of any Foreign Subsidiary, (iii)
      each other Benefit Plan (other than an Employee Agreement) which is
      sponsored, maintained, contributed to, or required to be sponsored,
      maintained or contributed to, by the Company or any Subsidiary exclusively
      for the benefit of any Employee and which, either individually or in the
      aggregate, is material to the business of the Company or any Subsidiary.

            "Department" means the U.S. Department of Labor.

            "Employee" means each current, former or retired employee, officer,
      consultant, independent contractor, agent or director of the Company or
      any Subsidiary.

            "Employee Agreement" means each management, employment, severance,
      consulting, non-compete, confidentiality, or similar agreement or contract
      between the 
<PAGE>
                                       23


      Seller, the Company or any Subsidiary or ERISA Affiliate and any Employee
      pursuant to which the Company or any Subsidiary has or may have any
      material liability, contingent or otherwise.

            "ERISA Affiliate" means each business or entity which is or was a
      member of a "controlled group of corporations", under "common control" or
      an "affiliated service group" with the Seller within the meaning of
      Section 414(b), (c) or (m) of the Code, or required to be aggregated with
      the Company under Section 414(o) of the Code or is under "common control"
      with the Company, within the meaning of Section 4001(a)(14) of ERISA.

            "Multi-Employer Plan" means each Company Benefit Plan which is
      "multi-employer plan" within the meaning of Section 3(37) or 4001(a)(3) of
      ERISA.

            "New Company Plan" means the New Defined Benefit Plan, the New
      401(k) Plan and any other Benefit Plan that the Purchaser is required to
      establish and maintain or cause to be established and maintained pursuant
      to Article VI of this Agreement.

            "PBGC" means the Pension Benefit Guaranty Corporation.

            "Pension Plan" means each Seller Benefit Plan or Company Benefit
      Plan (other than a Multi-Employer Plan) which is an "employee pension
      benefit plan" within the meaning of Section 3(2) of ERISA.

            "Seller Benefit Plan" means each Benefit Plan in which Employees
      participate that is sponsored, maintained or contributed to, or required
      to be sponsored, maintained or contributed to, by the Seller or any ERISA
      Affiliate, other than a Company Benefit Plan.

            "Welfare Plan" means each Company Benefit Plan which is an "employee
      welfare benefit plan" within the meaning of Section 3(1) of ERISA.

            (b) Disclosure Schedule. Section 3.14(b) of the Disclosure Schedule
contains a true and complete list of each Seller Benefit Plan, Company Benefit
Plan and Employee Agreement. Except as set forth on Section 3.14(b) of the
Disclosure Schedule, neither the Company, the Seller, any Subsidiary nor any
ERISA Affiliate has any plan or commitment, whether legally binding or not, to
establish any new Seller Benefit Plan or Company Benefit Plan, to enter into any
Employee Agreement or to modify or to terminate any Seller Benefit Plan, Company
Benefit Plan or Employee Agreement (except to the extent required by law or to
conform any such Seller Benefit Plan, Company Benefit Plan or Employee Agreement
to the requirements of any applicable law, in each case as previously
<PAGE>
                                       24


disclosed to Buyer, or as required by this Agreement), nor has any intention to
do any of the foregoing been communicated to Employees.

            (c) Documents. The Seller has made available to the Purchaser, and
shall deliver to the Purchaser as soon as practicable following the date of this
Agreement: (i) current, accurate and complete copies of all documents embodying
(and all material documents relating to) each Seller Benefit Plan, Company
Benefit Plan and Employee Agreement, including all amendments thereto, and all
written interpretations thereof and trust or funding agreements with respect
thereto; (ii) the two most recent annual actuarial valuations, if any, prepared
for each Seller Benefit Plan or Company Benefit Plan; (iii) the two more recent
annual reports (Series 5500 and all schedules thereto), if any, required under
ERISA in connection with each Seller Benefit Plan or Company Benefit Plan or
related trust; (iv) a statement of alternative form of compliance pursuant to
Department of Labor Regulation ss.2520.104-23, if any, filed for each Company
Benefit Plan which is a "Pension Benefit Plan" for a select group of management
of highly compensated employees; (v) the most recent determination letter
received from the IRS, if any, for each Company Benefit Plan and related trust
which is intended to satisfy the requirements of Section 401(a) of the Code;
(vi) if the Seller Benefit Plan or Company Benefit Plan is funded, the most
recent annual and periodic accounting of Seller Benefit Plan or Company Benefit
Plan assets upon the Purchaser's request; (vii) the most recent summary plan
description together with the most recent summary of material modifications, if
any, required under ERISA with respect to each Company Benefit Plan; and (viii)
all material written communications to any Employee or Employees relating to any
Seller Benefit Plan or Company Benefit Plan.

            (d) Compliance. Except as set forth in Section 3.14(d) of the
Disclosure Schedule: (i) the Company, the Seller, each Subsidiary and each ERISA
Affiliate have performed all material obligations required to be performed by
them under each Company Benefit Plan and Employee Agreement and all laws and
regulations applicable thereto; (ii) each Company Benefit Plan intended to
qualify under Section 401 of the Code (and each Corning 401(k) Plan, as defined
in Section 6.02(b)) is so qualified and a determination letter has been issued
by the IRS to the effect that each such Company Benefit Plan (and each Corning
401(k) Plan) is so qualified and no circumstances exist which could reasonably
be expected to adversely affect this qualification; (iii) no "prohibited
transaction", within the meaning of Section 4975 of the Code or Section 406 of
ERISA, has occurred with respect to any Company Benefit Plan which could result
in any material liability to the Company or any Subsidiary; (iv) there are no
actions, proceedings, arbitrations, suits or claims pending, or to the knowledge
of the Company, the Seller, any Subsidiary or any ERISA Affiliate, threatened or
anticipated (other than routine claims for benefits) against the Company, the
Seller, any Subsidiary or any ERISA Affiliate or any administrator, trustee or
other fiduciary of any Company Benefit Plan with respect to any Company Benefit
Plan or Employee Agreement, or against any Company Benefit Plan or against the
assets of any Company Benefit Plan which
<PAGE>
                                       25


could result in any material liability to the Company or any Subsidiary; (v) no
event or transaction has occurred with respect to any Company Benefit Plan that
would result in the imposition of any material tax under Chapter 43 of Subtitle
D of the Code; (vi) each Company Benefit Plan can be amended, terminated or
otherwise discontinued without material liability to the Company, the Seller,
any Subsidiary or any ERISA Affiliate (other than liability for benefits accrued
as of the date of such amendment, termination or discontinuance), provided,
however, that such amendment, termination or discontinuance has been effected in
accordance with the procedures required under such plan; and (vii) no Company
Benefit Plan is under audit or investigation by the IRS, the Department or the
PBGC, and to the knowledge of the Company, the Seller, any Subsidiary or any
ERISA Affiliate no such audit or investigation is pending or threatened.

            (e) Pension Plans. Except as set forth in Section 3.14(e) of the
Disclosure Schedule: (i) no steps have been taken to terminate any Pension Plan
now maintained or contributed to, no termination of any Pension Plan has
occurred pursuant to which all liabilities have not been satisfied in full, no
liability under Title IV of ERISA has been incurred by the Company, the Seller,
any Subsidiary or any ERISA Affiliate (whether or not related to a Pension Plan)
which has not been satisfied in full, and no event has occurred and no condition
exists that could reasonably be expected to result in the Company, the Seller,
Subsidiary or any ERISA Affiliate incurring a material liability under Title IV
of ERISA or could constitute grounds for terminating any Pension Plan; (ii) no
proceeding has been initiated by the PBGC to terminate any Pension Plan or to
appoint a trustee to administer any Pension Plan; (iii) each Pension Plan which
is subject to Part 3 of Subtitle B of Title I of ERISA or Section 412 of the
Code, has been maintained in compliance with the minimum funding standards of
ERISA and the Code and no such Pension Plan has incurred any "accumulated
funding deficiency", as defined in Section 412 of the Code and Section 302 of
ERISA, whether or not waived; (iv) neither the Company, the Seller, any
Subsidiary nor any ERISA Affiliate has sought nor received a waiver of its
funding requirements with respect to any Pension Plan and all contributions
payable with respect to each Pension Plan have been timely made; and (v) no
reportable event, within the meaning of Section 4043 of ERISA, and no event
described in Section 4062 or 4063 or ERISA, has occurred with respect to any
Pension Plan. With respect to each of the Revere Plan and the Corning Canada
Inc. Pension Plan for Hourly Employees (the "Canadian Plan"), the projected
benefit obligations (as determined in accordance with Statement of Financial
Accounting Standards No. 87 using the assumptions employed by the Seller in its
most recent audited financial statements) under such plan do not exceed the
market value of such plan's assets, and with respect to the Canadian Plan, such
plan's liabilities, determined on a "solvency" basis, do not exceed the fair
market value of such plan's assets by more than Can. $100,000.

            (f) Multi-Employer Plans. None of the Seller, the Company, any
Subsidiary or any ERISA Affiliate have any liability under any Multi-Employer
Plan.
<PAGE>
                                       26


            (g) No Post-Employment Obligations. Except as set forth in Section
3.14(g) of the Disclosure Schedule, none of the Seller, the Company or any
Subsidiary (i) maintains or contributes to any Seller Benefit Plan or Company
Benefit Plan which provides, or has any liability to provide, life insurance,
medical, severance or other employee welfare benefits to any Employee upon his
or her retirement or termination of employment, except as may be required by
Section 4980B of the Code or (ii) to the best of the Seller's knowledge, and
except as would not result in a material liability to the Company, has ever
represented, promised or contracted (whether in oral or written form) to any
Employee (either individually or to Employees as a group) that such Employee(s)
would be provided with life insurance, medical, severance or other employee
welfare benefits upon their retirement or termination of employment, except to
the extent required by Section 4980B of the Code.

            (h) Effect of Transaction. Except as set forth in Section 3.14(h) of
the Disclosure Schedule or as otherwise may be provided in Sections 6.03 and
6.04 of this Agreement, the execution of, and performance of the transactions
contemplated in, this Agreement will not (either alone or upon the occurrence of
any additional or subsequent events) (i) constitute an event under any Company
Benefit Plan, Employee Agreement, trust or loan that will or may result in any
payment (whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any Employee or (ii) result in the triggering or
imposition of any restrictions or limitations on the right of the Company or the
Purchaser to amend or terminate any Company Benefit Plan. No payment or benefit
which will or may be made by the Company, the Seller, any Subsidiary, the
Purchaser or any of their respective affiliates with respect to any Employee
will be characterized as an "excess parachute payment", within the meaning of
Section 280G(b)(1) of the Code.

            (i) 501(c)(9) Trust. Except as set forth in Section 3.14(i) of the
Disclosure Schedule, no Company Benefit Plan nor Employee Agreement is funded by
a trust described in Section 501(c)(9) of the Code.

            (j) Welfare Plan Funding. With respect to each Welfare Plan, all
claims incurred (including claims incurred but not reported) by Employees
thereunder for which the Company is, or will become, liable are (i) insured
pursuant to a contract of insurance whereby the insurance company bears any risk
of loss with respect to such claims; (ii) covered under a contract with a health
maintenance organization (an "HMO") pursuant to which the HMO bears the
liability for such claims or (iii) reflected as a liability or accrued for on
the Closing Balance Sheet.

            (k) Controlled Group Liability. The Company and the Subsidiaries
have no liability, contingent or otherwise, to, or with respect to any Benefit
Plan (other than the Company Benefit Plans and Employee Agreements which are
listed on Schedule 3.14(b))
<PAGE>
                                       27


which is now, or within the preceding five calendar years has been, sponsored,
maintained, contributed to, or required to be sponsored, maintained or
contributed to, by the Seller, the Company, any Subsidiary or any ERISA
Affiliate.

            SECTION 3.15. Labor Matters. Section 3.15 of the Disclosure Schedule
lists all labor, collective bargaining and other agreements to which the
Company, the Seller or any Subsidiary is a party with any labor organization,
group or association with respect to Employees, and copies of such agreements
have been made available to the Purchaser. Except as set forth in Section 3.15
of the Disclosure Schedule, the Company, the Seller and each Subsidiary is in
compliance in all material respects with all applicable material laws, rules or
regulations respecting employment practices, terms and conditions of employment
and wages and hours with respect to any Employee. Except as set forth in Section
3.15 of the Disclosure Schedule there is no, and in the past three years there
has not been any, (a) unfair labor practice charge within the meaning of the
National Labor Relations Act and the Railway Labor Act or complaint against the
Company, the Seller or any Subsidiary pending before the National Labor
Relations Board or any comparable state agency relating to labor matters
involving any Employees and (b) labor strike, labor dispute or material
disturbance, material grievance, arbitration, material administrative
proceeding, material litigation or work stoppage pending or, to the knowledge of
the Seller, threatened against the Company, the Seller or any Subsidiary
relating to labor matters.

            SECTION 3.16. Taxes. Except as set forth in Section 3.16 of the
Disclosure Schedule, (a) the Company and the Subsidiaries and each affiliated,
consolidated, combined or unitary group which included or includes the Company
or any Subsidiary have timely filed, in accordance with all applicable laws and
taking into account any extensions, all Income Tax returns required to be filed
by or on behalf of the Company and the Subsidiaries with respect to material
Income Taxes and have paid all Income Taxes due and payable by them (whether or
not shown as due on such returns) and all such Tax Returns are true and correct
in all material respects, (b) the Company and the Subsidiaries have timely
filed, in accordance with all applicable laws and taking into account any
extensions, all other material Tax returns required to be filed by them for any
period ending on or before the Closing Date, taking into account any extension
of time to file, and all such Tax returns of the Company and the Subsidiaries
were true, correct and complete in all material respects and all material Taxes
shown to be payable on such Tax returns of the Company and any Subsidiary (other
than Taxes being contested in good faith and for which the Company has
adequately reserved for in accordance with U.S. GAAP, other than deferred Taxes
that reflect the difference between book and tax basis in assets and
liabilities) have been paid, (c) no material adjustments relating to Taxes of
the Company or the Subsidiaries have been raised in writing by any governmental
authority during any presently pending audit or examination, (d) the Company and
its Subsidiaries are not presently being audited by any taxing authority with
respect to a material amount of Taxes, (e) no adjustment relating to the timing
of income, deductions, losses or 
<PAGE>
                                       28


credits of the Company or any Subsidiary has been made in writing by any taxing
authority in any completed audit or examination which, by application of the
result of such adjustment, could reasonably be expected to result in a material
Tax deficiency for any subsequent period, (f) no waivers of statutes of
limitation with respect to the material Tax Returns of the Company or the
Subsidiaries have been given by or requested in writing from the Company or the
Subsidiaries, (g) there are no material liens for Taxes (other than for Taxes
not yet due and payable) on any assets of the Company or any of the
Subsidiaries, (h) neither the Company nor any of the Subsidiaries has filed a
consent pursuant to the collapsible corporation provisions of Section 341(f) of
the Code (or any corresponding provision of state or local law) or agreed to
have Section 341(f)(2) of the Code (or any corresponding provisions of state or
local law) apply to any disposition of any asset owned by the Company or any of
the Subsidiaries, as the case may be, (i) neither the Company nor any of the
Subsidiaries has agreed to make any material adjustment under Section 481(a) of
the Code by reason of a change in accounting method or otherwise, and (j) no
property owned by the Company or any of the Subsidiaries (A) is property
required to be treated as being owned by another person pursuant to the
provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as amended
and in effect immediately prior to the enactment of the Tax Reform Act of 1986;
(B) constitutes "tax exempt use property" within the meaning of Section
168(h)(1) of the Code; or (C) is tax exempt bond financed property within the
meaning of Section 168(g) of the Code.

            SECTION 3.17. Environmental, Health and Safety. Except as set forth
in Section 3.17 of the Disclosure Schedule or except as would not, individually
or in the aggregate, have a Material Adverse Effect: (a) the Company and the
Subsidiaries currently hold all the permits, licenses and approvals of
Governmental Authorities and agencies necessary for the current use, occupancy
or operation of the Business and required by any Environmental Law
("Environmental Permits") and are in compliance with all such Environmental
Permits; (b) the Company and the Subsidiaries are, and for the past five years
have been, in compliance with all applicable Environmental Laws; (c) except as
permitted by and as would not result in any liability under applicable
Environmental Laws, there are no underground or aboveground storage tanks or any
surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous
Materials are being treated, stored or disposed on any of the Owned Real
Property or Leased Real Property or, with respect to the period of the Company's
or any Subsidiary's ownership, tenancy or operation of such property, on any
real property formerly owned, leased or operated by the Company or any
Subsidiary; (d) there is no asbestos or asbestos-containing material on any of
the Owned Real Property or Leased Real Property, except to the extent not
prohibited by, and as would not result in any liability under, applicable
Environmental Laws; (e) neither the Seller, the Company nor any Subsidiary, nor
any Person for whom any of them is liable by operation of law, has released,
discharged or disposed of Hazardous Materials on any of the Owned Real Property
or Leased Real Property or on any real property formerly owned, leased or
operated by the Company or any Subsidiary; (f) neither the Seller, the Company
nor any Subsidiary is undertaking any
<PAGE>
                                       29


investigation or assessment or remedial or response action relating to any
release, discharge or disposal of or contamination with Hazardous Materials at
any site, location or operation, either voluntarily or pursuant to the order of
any Governmental Authority or the requirements of any Environmental Law; (g)
there are no past, pending or threatened in writing Environmental Claims against
the Company, any Subsidiary or any Real Property and, to the Seller's knowledge,
there are no facts that are reasonably expected to form the basis of any such
Environmental Claim; and (h) the Company has made available to the Purchaser
true and complete copies of all Environmental Reports in its possession.

            As used in this Agreement, the following terms have the following
meanings:

            "Environmental Claims" means any and all actions, suits, written
demands, written claims, complaints, liens, notices of noncompliance or
violation, notices of liability or potential liability, investigations, written
requests from Governmental Authorities, proceedings, consent orders or consent
agreements relating in any way to any Environmental Law, any Environmental
Permit or any Hazardous Material or arising from any actual or alleged injury or
threat of injury to health, safety or the environment.

            "Environmental Law" means any foreign, federal, state or local law,
statute, ordinance, rule, regulation or common law, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, in each case in effect and as amended as of
the Closing Date, relating to, regulating or imposing liability or standards of
conduct concerning pollution or protection of the environment, health or safety
or the generation, use, handling, transportation, treatment, storage, disposal,
release or discharge of any Hazardous Materials.

            "Environmental Report" means any written report, study, assessment,
audit or other similar document, in each case prepared during the last five
years, that addresses any issue of actual or potential noncompliance with, or
actual or potential liability under, any Environmental Law that may affect the
Company.

            "Hazardous Materials" means any pollutants, contaminants, toxic or
hazardous substances, materials, wastes, constituents, compounds, chemicals,
including, without limitation, petroleum or any by-products thereof, any form of
natural gas, asbestos or asbestos-containing materials, polychlorinated
biphenyls ("PCBs") or PCB-containing equipment, radon or other radioactive
elements, carcinogenic or mutagenic agents, pesticides, explosives, flammables,
corrosives and urea formaldehyde foam insulation, in each case that form the
basis of liability, or are subject to regulation, under any Environmental Laws
as of the Closing Date.
<PAGE>
                                       30


            SECTION 3.18. Intellectual Property. Each representation and
warranty set forth in this Section 3.18 is qualified in its entirety by
reference to Section 3.18 of the Disclosure Schedule.

            (a) Section 3.18 of the Disclosure Schedule contains true and
complete lists of (i) the Consumer Trademarks, (ii) the Consumer Patents, (iii)
the Seller's Retained Patents,(iv) registered Consumer Copyrights and (v) the
Consumer License Agreements.

            (b) The Seller (or its Affiliates), the Company or a Subsidiary owns
or possesses adequate licenses or other valid rights to use, in each case, free
and clear of all liens, security interests, claims, or restrictions, all
material items of the Consumer Intellectual Property. There is no pending or, to
the knowledge of the Seller, threatened action, proceeding or Governmental
Order, or, to the knowledge of the Seller, assertion or claim, challenging,
limiting or canceling the validity or ownership of any Consumer Intellectual
Property. There are no pending or, to the knowledge of the Seller, threatened,
interferences, reexaminations, oppositions or other proceedings that could
threaten or diminish the scope, value, validity or enforceability of any
material Consumer Intellectual Property.

            (c) There is no breach or violation of any Consumer License
Agreement by the Seller, the Company or any Subsidiary, or, to the knowledge of
the Seller, by any other party to such Consumer License Agreement. Each Consumer
License Agreement is a legal, valid, binding agreement of the Seller, the
Company or a Subsidiary, as the case may be. The consummation of the
transactions contemplated by this Agreement will not result in the termination
of, or any modification to, any Consumer License Agreement, except where the
foregoing would not, individually or in the aggregate, have a Material Adverse
Effect. The Company, the Seller or a Subsidiary, as the case may be, has taken
reasonable measures to maintain the confidentiality of the Consumer Know-How,
the value of which to the Company is dependent upon the maintenance of the
confidentiality thereof and has taken reasonable measures to police the Consumer
Intellectual Property for infringement by any third party. The Seller, the
Company and the Subsidiaries have not received notice of any, and to the
knowledge of the Seller, there are no, infringements or threatened infringements
of the Consumer Intellectual Property. None of the Seller, the Company or any
Subsidiary has licensed or otherwise permitted the use by any third party of any
Consumer Know-How on terms or in a manner that would have a Material Adverse
Effect. To the knowledge of the Seller, the conduct of the Business does not and
will not infringe upon or conflict with, in any way, any license, trademark,
trademark right, trade name, trade name right, patent, patent right, industrial
model, invention, service mark, copyright or other proprietary right of any
third party, except as would not, individually or in the aggregate, have a
Material Adverse Effect, and the Seller, the Company and the Subsidiaries have
not received any claim or notice from any third party to the contrary.
<PAGE>
                                       31


            (d) The Consumer Intellectual Property is all of the intellectual
property used in and necessary for the operation of the Business as currently
conducted.

            SECTION 3.19. Material Contracts. (a) Section 3.19 of the Disclosure
Schedule lists the following contracts (the "Material Contracts") in effect as
of the date of this Agreement to which the Company or any Subsidiary is a party:

            (i) any commitment, contract, agreement or purchase order that the
      Seller reasonably anticipates will, in accordance with its terms, involve
      aggregate payments or receipts by the Company or any Subsidiary of more
      than $200,000 within any 12-month period following the date of this
      Agreement and that is not cancelable by the Company or such Subsidiary
      without liability within 60 days;

            (ii) any lease of personal property involving any annual expense in
      excess of $250,000 that is not cancelable without liability within 60
      days;

            (iii) any contracts or agreements containing covenants limiting the
      freedom of the Company or any Subsidiary to engage in any line of business
      or compete with any Person;

            (iv) any license agreement, assignment or contract (whether as
      licensor or licensee, assignor or assignee) relating to any Consumer
      Intellectual Property other than immaterial licenses granted in the
      ordinary course of business consistent with past practice;

            (v) any contract that creates a joint venture or partnership;

            (vi) any contract or agreement relating to clean-up, abatement or
      other actions in connection with the remediation of any liabilities
      relating to Hazardous Substances;

            (vii) any contract with an Affiliate; and

            (viii) any credit agreement, loan agreement, guarantee, note or
      other evidence of Indebtedness or agreement providing for Indebtedness.

            Except as set forth in Section 3.19 of the Disclosure Schedule,
correct and complete copies of all written contracts listed or required to be
listed in Section 3.19 of the Disclosure Schedule have been made available to
Purchaser before the date hereof.
<PAGE>
                                       32


            (b) Neither the Company nor any Subsidiary is (and, to the knowledge
of the Seller, no other party is) in breach or violation of, or default under,
any of the Material Contracts, where such breach or violation or default would
have a Material Adverse Effect. Each Material Contract is a valid agreement,
arrangement or commitment of the Company or Subsidiary that is a party thereto,
enforceable against the Company or such Subsidiary, as the case may be, in
accordance with its terms and, to the knowledge of the Seller, is a valid
agreement, arrangement or commitment of each other party thereto, enforceable
against such party in accordance with its terms, except in each case as would
not, individually or in the aggregate, have a Material Adverse Effect.

            SECTION 3.20. Brokers. Except for Goldman, Sachs & Co. ("Goldman,
Sachs"), no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Seller. The Seller is solely responsible for the fees and expenses of
Goldman, Sachs.

            SECTION 3.21. Entire Business. The assets of the Company and the
Subsidiaries (together with the rights to be licensed or made available to the
Company pursuant to agreements to be entered into pursuant to Article V) include
all of the assets, rights or properties of any kind that are material to or
necessary for the Business as it is now being and is currently proposed to be
conducted.

            SECTION 3.22. Insurance. Section 3.22 of the Disclosure Schedule
lists all insurance policies of Seller, the Company and the Subsidiaries
covering the assets, products, employees and operations of the Company and the
Subsidiaries as of the date hereof. All such policies are in full force and
effect, all premiums due thereon have been paid by the Seller, the Company or
the Subsidiaries, and the Seller, the Company or the Subsidiaries have complied
in all materials respects with the provisions of such policies and have not
received notice from any of its insurance brokers or carriers that such broker
or carrier will not be willing or able to renew their existing coverage.

                                   ARTICLE IV

                 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

            The Purchaser represents and warrants to the Seller as follows:
<PAGE>
                                       33


            SECTION 4.01. Incorporation and Authority of the Purchaser. The
Purchaser is a corporation duly incorporated, validly existing and in good
standing under the laws of Delaware and has all necessary corporate power and
authority to enter into this Agreement, to carry out its obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by the Purchaser, the performance by the Purchaser of
its obligations hereunder and the consummation by the Purchaser of the
transactions contemplated hereby have been duly authorized by all requisite
corporate action on the part of the Purchaser. This Agreement has been duly
executed and delivered by the Purchaser, and (assuming due authorization,
execution and delivery by the Seller and the Company) constitutes a legal, valid
and binding obligation of the Purchaser enforceable against the Purchaser in
accordance with its terms.

            SECTION 4.02. No Conflict. Assuming that all consents, approvals,
authorizations and other actions described in Section 4.03 have been obtained
and all filings and notifications described in Section 4.03 have been made, and
except as may result from any facts or circumstances relating solely to the
Seller, the execution, delivery and performance of this Agreement by the
Purchaser do not and will not: (a) violate or conflict with the Certificate of
Incorporation or By-laws of the Purchaser; (b) conflict with or violate any law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award applicable to the Purchaser; or (c) result in any breach of, or constitute
a default (or event which with the giving of notice or lapse of time, or both,
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or, except for liens or other
encumbrances imposed in connection with the Financing or by the Stockholders
Agreement and applicable securities laws, result in the creation of any lien or
other encumbrance on any of the assets or properties of the Purchaser pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument to which the Purchaser or any of its
subsidiaries is a party or by which any of such assets or properties is bound or
affected, except in the case of this clause (b) or clause (c) or as would not,
individually or in the aggregate, have a material adverse effect on the business
or financial condition of the Purchaser or prevent or materially delay the
consummation by the Purchaser of the transactions contemplated hereby.

            SECTION 4.03. Consents and Approvals. The execution, delivery and
performance of this Agreement by the Purchaser does not and will not require any
material consent, approval, authorization or other order of, action by, or
filing with or notification to, any Governmental Authority, except (a) the
notification and waiting period requirements of the HSR Act, (b) where failure
to obtain such consent, approval, authorization or action, or to make such
filing or notification, would not prevent or materially delay the consummation
by the Purchaser of the transactions contemplated by this Agreement and (c) as
may be necessary as a result of any facts or circumstances relating solely to
the Seller or the Company.
<PAGE>
                                       34


            SECTION 4.04. Absence of Litigation. There are no claims, actions,
proceedings or investigations pending or, to the knowledge of the Purchaser,
threatened against the Purchaser before any Governmental Authority that are
reasonably likely to prevent or materially delay the consummation by the
Purchaser of the transactions contemplated hereby.

            SECTION 4.05. Investment Purpose. The Purchaser is acquiring the
Acquired Shares solely for the purpose of investment and not with a view to, or
for offer or sale in connection with, any distribution thereof and agrees that
the Acquired Shares will not be transferred except in a transaction registered
or exempt from registration under the Securities Act of 1933, as amended.

            SECTION 4.06. Financing. The Purchaser has available or access to
funds sufficient to fund the payment of the Cash Dividend, to purchase the
Acquired Shares and to pay the fees, expenses and other costs required to be
paid by the Company in connection with the Financing and the transactions
contemplated hereby.

            SECTION 4.07. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Purchaser (other than transaction fees and
management fees payable by the Company to an Affiliate of the Purchaser as
previously disclosed to the Seller).
<PAGE>
                                       35


                                    ARTICLE V

                              ADDITIONAL AGREEMENTS

            SECTION 5.01. Conduct of Business Prior to the Closing. (a) Unless
the Purchaser otherwise agrees in writing and except as otherwise set forth in
this Agreement (including, but not limited to, Sections 5.14, 5.15 and 5.16) or
in Section 5.01 of the Disclosure Schedule, between the date of this Agreement
and the Closing Date, the Seller will cause the Company and each Subsidiary to
(i) conduct the Business only in the ordinary course consistent with past
practice and in compliance with applicable laws, (ii) use reasonable best
efforts to preserve the current relationships of the Company and the
Subsidiaries with their respective customers, suppliers, distributors, agents,
officers and employees and other persons with which the Company and the
Subsidiaries have significant business relationships, (iii) use reasonable best
efforts to maintain all of the assets owned or used by the Business in the
ordinary course of business consistent with past practice and (iv) continue
capital expenditures substantially in accordance with the forecasts for capital
expenditures for 1998 attached hereto as Exhibit 5.01; provided that in
connection with such capital expenditures, the Seller agrees that it will
approve any appropriation request made by the Company in respect of budgeted
capital expenditures during the period between the date of this Agreement and
the Closing Date.

            (b) Except as expressly provided in this Agreement (including, but
not limited to, Sections 5.14, 5.15 and 5.16) or Section 5.01 of the Disclosure
Schedule, between the date of this Agreement and the Closing Date, the Seller
will cause the Company and the Subsidiaries not to do any of the following
without the prior written consent of the Purchaser (and the Purchaser shall act
in good faith in considering any such request):

            (i) create any security interest, pledge, lien or other encumbrance
      on any properties or assets (whether tangible or intangible) of the
      Company or any Subsidiary, other than (A) Permitted Encumbrances, (B)
      security interests, pledges, liens and encumbrances that will be released
      at or prior to the Closing and (C) security interests, pledges, liens and
      encumbrances on assets having a value not exceeding $500,000 in the
      aggregate;

            (ii) (A) except for sales of inventory and obsolete fixed assets and
      the transfer of cash in payment of trade payables, in each case, in the
      ordinary course of business, sell, assign, transfer, lease or otherwise
      dispose of or agree to sell, assign, transfer, lease or otherwise dispose
      of any assets of the Company or any Subsidiary or (B) cancel any
      Liabilities owed to the Company or any Subsidiary, in the case of both (A)
      and (B) above, having an aggregate value exceeding $500,000;
<PAGE>
                                       36


            (iii) acquire (by merger, consolidation, or acquisition of stock or
      assets) any corporation, partnership or other business organization or
      division thereof;

            (iv) (A) issue, repay, repurchase, redeem any debt securities (other
      than issuances in the ordinary course of business of debt securities to
      the Seller or any of its Affiliates on terms consistent with past practice
      that will be repaid prior to the Closing Date), (B) other than with
      respect to borrowings and repayments of borrowings under the Revolving
      Credit Agreement in the ordinary course of business, incur, repay,
      repurchase, redeem any indebtedness for borrowed money, (C) assume, grant,
      guarantee or endorse, or make any other accommodation or arrangement
      making the Company or any Subsidiary responsible for, the Liabilities of
      any Person (other than the Company or another Subsidiary, as the case may
      be) or (D) make any loans, advances or capital contributions to, or
      investments in any Person (other than the Company or a Subsidiary), in the
      case of (A), (B), (C) and (D), having an aggregate value exceeding
      $500,000;

            (v) change any method of accounting or accounting practice used by
      the Company or any Subsidiary, other than such changes required by U.S.
      GAAP; provided that the Seller will give the Purchaser prompt notice of
      any such change;

            (vi) (A) enter into or adopt, or amend any existing agreement or
      arrangement relating to severance, except that the Company may pay any
      severance required to be paid by any such agreement or arrangement
      described in Section 3.14(b) of the Disclosure Schedule as in effect on
      the date hereof, (B) enter into or adopt, or amend any existing severance
      plan, (C) enter into or amend any employee benefit plan, employment or
      consulting agreement or collective bargaining agreement (including,
      without limitation, the plans, programs, agreements and arrangements
      referred to in Section 3.14) except as set forth in Section 5.01(b)(vi) of
      the Disclosure Schedule and in accordance with any collective bargaining
      agreement listed in Section 3.15 of the Disclosure Schedule or (D) except
      in accordance with written guidelines for merit compensation increases for
      employees other than officers or directors, which have been provided to
      the Purchaser, grant any increases in compensation, except compensation
      increases associated with promotions and annual reviews of employees other
      than officers or directors in the ordinary course of business or provided
      pursuant to collective bargaining agreements;

            (vii) accelerate or delay the manufacture, shipment or sale of
      inventory, the collection of accounts or notes receivable or the payment
      of accounts or notes payable or otherwise operate the business of the
      Company or any Subsidiary, in each case in a manner that would
      artificially affect the computation of the adjustments to the Cash
      Dividend Amount pursuant to Section 2.04;
<PAGE>
                                       37


            (viii) engage in any transaction other than on an arms-length basis
      with the Seller (or its other subsidiaries) or any officer or director of
      the Seller, the Company or any Subsidiary, except, in the case of the
      Seller (or such other subsidiary), in the ordinary course of business
      consistent with past practice;

            (ix) enter into, modify, terminate, amend or grant any waiver in
      respect of any Material Contract (except in the ordinary course of
      business in the case of those Material Contracts described in Section
      3.19(a)(i));

            (x) allow the lapse of any of the Company's or Subsidiaries' rights
      of ownership or use of any material Consumer Intellectual Property;

            (xi) issue or sell any shares of the capital stock of, or other
      equity interests in, the Company or any Subsidiary, or securities
      convertible into or exchangeable for such shares or equity interests, or
      issue or grant any options, warrants, calls, subscription rights or other
      rights of any kind to acquire additional shares of such capital stock,
      such other equity interests or such securities;

            (xii) amend the Company's or any Subsidiary's Certificate of
      Incorporation or By-laws or equivalent organization documents;

            (xii) reclassify, combine, split, subdivide or redeem, purchase or
      otherwise acquire, directly or indirectly, any of the capital stock of the
      Company or any Subsidiary;

            (xiii) make any material state, local or foreign tax election or
      settle or compromise any material state, local or foreign tax liability;

            (xiv) declare, set aside, make or pay any dividend or other
      distribution, payable in stock or property, with respect to any capital
      stock or other equity or ownership interest in the Company or any
      Subsidiary, provided, that cash dividends with a payment date prior to the
      date of the Closing Balance Sheet may be declared and paid at any time
      prior to such date;

            (xv) distribute, pay or otherwise transfer any cash to the Seller or
      any of its other Affiliates between the date of the Closing Balance Sheet
      and the Closing;

            (xvi) settle or compromise any pending or threatened suit, action or
      claim for in excess of $250,000 per suit, action or claim or which relates
      to the transactions contemplated hereby;
<PAGE>
                                       38


            (xvii) authorize any single expenditure or series of related capital
      expenditures for any capital which are not specifically provided for in
      the Company's capital budget for the year ending December 31, 1998;

            (xviii) adopt a plan of complete or partial liquidation,
      dissolution, merger, consolidation, restructuring, recapitalization or
      other reorganization of the Company or any Subsidiaries; or

            (xix) agree to take any of the actions specified in this Section
      5.01(b).

            SECTION 5.02. Access to Information. (a) From the date of this
Agreement until the Closing, upon reasonable notice, the Seller shall, and shall
cause the officers, employees, auditors, attorneys, advisors and agents of the
Seller, the Company and the Subsidiaries to, (i) afford the officers, employees,
auditors, attorneys, financing sources and authorized agents and representatives
of the Purchaser reasonable access, during normal business hours, to the
offices, properties, attorneys, auditors, consultants, advisors, books and
records and management employees, auditors, attorneys and financing sources of
the Company and the Subsidiaries and (ii) furnish to the officers, employees and
authorized agents and representatives of the Purchaser access to, and copies of,
such additional financial and operating data and other documents and information
regarding the assets, properties, goodwill and business of the Company and the
Subsidiaries as the Purchaser may from time to time reasonably request;
provided, however, that such investigation shall not unreasonably interfere with
any of the businesses or operations of the Seller, the Company, the Subsidiaries
or any Affiliate of the Seller; provided further, that the Seller shall only be
obligated to use its reasonable efforts to cause the auditors of the Seller to
make any work papers available to any Person. No investigation pursuant to this
Section 5.02(a) shall affect any representations or warranties of the parties
herein or the conditions to the obligations of the parties hereto.

            (b) The Purchaser agrees that it shall preserve and keep all Books
and Records in the Purchaser's possession for a period of at least eight years
from the Closing Date. After such eight-year period, before the Purchaser shall
dispose of any of such Books and Records, at least 90 calendar days' prior
written notice to such effect shall be given by the Purchaser to the Seller, and
the Seller shall be given an opportunity, at its cost and expense, to remove and
retain all or any part of such Books and Records as the Seller may select. The
Seller acknowledges that the Purchaser shall not be liable to the Seller in the
event of any accidental destruction of such Books and Records.

            (c) Each party agrees that it will cooperate with and make available
to the other party, during normal business hours, all Books and Records,
information and employees (without substantial disruption of employment)
retained and remaining in existence after the
<PAGE>
                                       39


Closing Date which are necessary or useful in connection with any Tax inquiry,
audit, investigation or dispute, environmental report, filing or liability, any
litigation or investigation or any other matter requiring any such Books and
Records, information or employees for any reasonable business purpose similar to
the foregoing. The party requesting any such Books and Records, information or
employees shall bear all of the out-of-pocket costs and expenses (including,
without limitation, attorneys' fees, but excluding reimbursement for salaries
and employee benefits) reasonably incurred in connection with providing such
Books and Records, information or employees. The Seller may require certain
financial information relating to the Business for periods prior to the Closing
Date for the purpose of filing federal, state, local and foreign Tax returns and
other governmental reports, and the Purchaser agrees to furnish such information
to the Seller at the Seller's reasonable request and expense.

            SECTION 5.03. Confidentiality. (a) The terms of the Confidentiality
Agreement are hereby incorporated herein by reference and shall continue in full
force and effect until the Closing, at which time such Confidentiality Agreement
and the obligations of the Purchaser under this Section 5.03 shall terminate;
provided, however, that the Confidentiality Agreement shall terminate in
accordance with its terms in respect of that portion of the Information (as
defined in the Confidentiality Agreement) that does not relate to the Business
and the transactions contemplated by this Agreement. If this Agreement is, for
any reason, terminated prior to the Closing, the Confidentiality Agreement shall
continue in full force and effect in accordance with its terms.

            (b) The Seller agrees to keep confidential all nonpublic information
in its possession regarding the Business, the Company and the Subsidiaries
(including, without limitation, any information made available to the Seller
pursuant to Section 5.02(c)); provided, however, that the Seller will not be
required to maintain as confidential any information that (i) becomes generally
available to the public other than as a result of a disclosure by the Seller or
(ii) is required to be disclosed pursuant to the terms of a valid subpoena or
order by Governmental Authority or other legal requirement.

            (c) At the Closing, the Seller shall assign to the Purchaser, to the
extent assignable, its rights under any confidentiality agreements between the
Seller and Persons other than the Purchaser that were entered into in connection
with or relating to a possible sale of the Business, including, without
limitation, to the extent assignable, the right to enforce all terms of such
confidentiality agreements; provided, however, that to the extent such
confidentiality agreements are not assignable, the Seller agrees to take such
action as may be reasonably necessary to enforce its rights thereunder for the
benefit of the Company, at the Company's cost and expense. At the Closing, the
Seller shall deliver to the Purchaser executed copies of all such
confidentiality agreements to the extent available and permitted under such
agreements.
<PAGE>
                                       40


            SECTION 5.04. Regulatory and Other Authorizations; Consents. (a)
Each party hereto shall use its reasonable best efforts to obtain all
authorizations, consents, orders and approvals of all Governmental Authorities
or third parties that may be or become necessary for the performance of its
obligations pursuant to this Agreement and will cooperate fully with the other
party in promptly seeking to obtain all such authorizations, consents, orders
and approvals. Each party hereto agrees to make an appropriate filing of a
Notification and Report Form pursuant to the HSR Act, and to the extent
applicable, the appropriate form under the Canada Competition Act, with respect
to the transactions contemplated hereby within five Business Days of the date
hereof, to request early termination of the waiting period under the HSR Act,
and to supply promptly any additional information and documentary material that
may be requested pursuant to the HSR Act or, if applicable, the Canada
Competition Act. The parties shall cooperate with each other in connection with
the making of all such filings or responses, including providing copies of all
such documents to the non-filing or non-responding party and its advisors prior
to filing or responding. The parties hereto shall not take any action that will
have the effect of delaying, impairing or impeding the receipt of any required
approvals.

            (b) The Purchaser agrees to take any and all reasonable steps
necessary to avoid or eliminate each and every impediment under any antitrust
law that may be asserted by any governmental antitrust authority so as to enable
the parties to close the transactions contemplated hereby.

            (c) Each party hereto agrees to cooperate in obtaining any other
consents and approvals which may be required in connection with the transactions
contemplated by this Agreement.

            SECTION 5.05. Investigation. (a) The Purchaser acknowledges and
agrees that (i) it has made its own inquiry and investigation into, and, based
thereon, has formed an independent judgment concerning, the Company, the
Subsidiaries and the Business, (ii) it has been furnished with or given adequate
access to such information about the Company, the Subsidiaries and the Business
as it has requested and (iii) no representations and warranties are being made,
and there shall be no liability (other than for intentional breach or fraud),
with respect to information (other than, with respect to the Company, the
Subsidiaries and the Business, the representations and warranties contained in
this Agreement) furnished by the Seller or any of its directors, officers,
employees, agents, stockholders, Affiliates, consultants, counsel, accountants,
investment bankers or other representatives concerning the Seller, its
Affiliates, the Company the Subsidiaries and the Business.

            (b) In connection with the Purchaser's investigation of the Company,
the Subsidiaries and the Business, the Purchaser has received from the Seller
certain estimates, projections and other forecasts for the Company, the
Subsidiaries and the Business, and certain
<PAGE>
                                       41


plan and budget information. The Purchaser acknowledges that there are
uncertainties inherent in attempting to make such projections, forecasts, plans
and budgets, that the Purchaser is familiar with such uncertainties and that the
Seller makes no representation or warranty with respect to any such estimates,
projections, forecasts, plans or budgets.

            SECTION 5.06. Administrative Services Agreement. On the Closing
Date, upon the request of the Purchaser, the Seller shall enter into an
administrative services agreement with the Company (the "Administrative Services
Agreement"), substantially in the form attached hereto as Exhibit 5.06, pursuant
to which the Seller will provide or will cause one or more of its Affiliates to
provide to the Company, among other things, certain administrative support
services in Japan, Hong Kong, India, Korea, Mexico, China, Taiwan and Brazil and
certain sales support services in Mexico. In furtherance of the foregoing, the
Seller and the Company have established or will establish in compliance with
applicable laws and regulations such appropriate (in the reasonable judgment of
the Company) local entities or organizations in foreign jurisdictions to perform
or receive the services to be provided pursuant to the Administrative Services
Agreement.

            SECTION 5.07. Company Headquarters. The Purchaser shall maintain the
principal business headquarters of the Company in the State of New York within
25 miles of Corning, New York for a period of at least five years from the
Closing Date. The parties agree that the Company will move its principal
business headquarters currently located on the Seller's Houghton Park, Corning,
New York campus to a new location in the State of New York within 25 miles of
Corning, New York no later than 18 months following the Closing Date, and the
Purchaser agrees to use all reasonable efforts, and the Seller shall cooperate,
to expedite such relocation as promptly as practicable following the Closing
Date. At the Closing, the Company shall enter into a lease with the Seller with
respect to the Company's current principal business headquarters covering the
period from the Closing to the date on which the Company vacates such
headquarters premises, substantially in the form attached hereto as Exhibit
5.07.

            SECTION 5.08. Non-Solicitation of Employees. For a period of two
years following the Closing Date and except as otherwise agreed to in writing by
the Seller and the Purchaser, (a) the Seller and its Affiliates shall not,
directly or indirectly, actively solicit or induce any salaried employee of the
Company or any of its Affiliates to leave such employment and become an employee
of the Seller or any of its Affiliates and (b) the Purchaser, the Company and
its Affiliates shall not, directly or indirectly, actively solicit or induce any
salaried employee of the Seller or any of its Affiliates to leave such
employment and become an employee of the Company or any of its Affiliates. The
parties agree that a remedy at law for any breach of any obligation under this
Section 5.08 will be inadequate and that in addition to any other rights and
remedies to which the Purchaser or the Seller may be entitled hereunder, at law
or in equity, the Purchaser or the Seller shall be entitled to 
<PAGE>
                                       42


injunctive relief and reimbursement for all reasonable attorney's fees and other
expenses incurred in connection with the enforcement hereof. In the event this
Section 5.08 is held to be in any respect an unreasonable restriction upon the
Purchaser, the Seller or the Company or their respective Affiliates by any court
having competent jurisdiction, the court so holding may reduce the geographic
scope to which this Section 5.08 pertains and/or the period of time for which it
operates, or effect any other change to the extent necessary to render this
Section 5.08 enforceable by such court. As so modified, this Section 5.08 will
continue in full force and effect. Such decision by a court of competent
jurisdiction shall not invalidate this Agreement, but this Agreement shall be
interpreted, construed and enforced as not containing such invalidated
provision.

            SECTION 5.09. Intellectual Property Matters. (a) Consumer
Intellectual Property. At or prior to the Closing, subject to any pre-existing
licenses previously disclosed to the Purchaser, the Seller shall assign to the
Company all the Consumer Intellectual Property not owned by the Company or a
Subsidiary, other than (i) rights to the trademarks or any use of the terms
CORNING, CORNING WARE, CROWN CORNING, PYREX and PYROCERAM (the use of which
shall be governed by the license agreements referred to in Sections 5.09(b),
(c), (e) and (f)) and (ii) the Consumer Know-How owned by the Seller and the
Seller's Retained Patents (each of which shall be licensed to the Company
pursuant to Section 5.09(d)). The costs associated with such a transfer,
including any associated taxes, shall be borne by the Seller.

            (b) Certain Trademarks of the Seller. (i) At the Closing, subject to
any pre-existing licenses previously disclosed to the Purchaser, the Seller
shall grant to the Company a worldwide, exclusive and fully paid, royalty-free
license to use the CORNING WARE and PYROCERAM trademarks only in the field of
Housewares, for a term of ten years, continuously renewable on the same terms
and conditions for consecutive ten-year terms at the option of the Company,
pursuant to a license agreement (the "CORNING WARE and PYROCERAM License
Agreement"), substantially in the form attached hereto as Exhibit 5.09(b)(i).

            (ii) At the Closing, pursuant to the CORNINGWARE and PYROCERAM
License Agreement, the Seller shall grant to the Company a worldwide, exclusive,
fully paid, and royalty-free license to use the term CORNINGWARE as part of the
corporate name of the Company and any of its subsidiaries for a term of ten
years, continually renewable on the same terms and conditions for consecutive
ten year terms at the option of the Company, subject to the following
conditions: (A) the term CORNINGWARE must be preceded by a word that (1) does
not begin with the letters COR or COS, (2) is not merely an article (e.g. "a",
"the" or "an"), (3) does not include the word "consumer" and (4) is otherwise
subject to the Seller's approval, which approval shall not be unreasonably
withheld; (B) the corporate name including the term CORNINGWARE word shall use
such word in a manner so that the 
<PAGE>
                                       43


"CORNING" portion of the word is unified with the "WARE" portion of the word,
the Seller acknowledging that use in the form "CorningWare" is acceptable; (C)
the corporate name including the term CORNINGWARE shall not be used solely as a
trademark or servicemark; and (D) the certificate of incorporation (or
equivalent document) of the Company and any of its subsidiaries using the term
CORNINGWARE as part of its corporate name shall state that such use is pursuant
to the CORNINGWARE and PYROCERAM License Agreement.

            (iii) At the Closing, pursuant to the CORNINGWARE and PYROCERAM
License Agreement, the Seller shall grant to the Company a worldwide, exclusive,
fully paid and royalty-free license to use the term CORNINGWARE as a servicemark
in connection with the operation of the outlet stores primarily selling
Housewares products of the Company for a term of ten years continually renewable
on the same terms and conditions for consecutive ten year terms at the option of
the Company.

            (iv) At the Closing, subject to any pre-existing licenses previously
disclosed to the Purchaser, the Seller shall grant to the Company a worldwide,
exclusive and fully paid royalty-free license to use the "PYREX" trademark in
the field of Durable Consumer Products for a term of ten years, continuously
renewable on the same terms and conditions for consecutive ten-year terms at the
option of the Company, pursuant to a license agreement (the "PYREX License
Agreement"), substantially in the form attached hereto as Exhibit 5.09(b)(ii).

            (c) License Agreements. At the Closing, the Seller shall assign to
the Company the Seller's interests in the Consumer License Agreements to which
the Seller is a party as they relate to the Business; provided, however, that
with respect to any Consumer License Agreement that involves the licensing of
the CORNING WARE, PYREX or PYROCERAM trademarks or any confusingly similar
modifications or derivations and which by its terms prohibits assignment and is
disclosed to the Purchaser, (i) the Seller shall not assign such Consumer
License Agreement, but instead shall designate the Company as the recipient of
any royalties with respect to the marks CORNING WARE and PYROCERAM in the field
of Housewares and with respect to the mark PYREX in the field of Durable
Consumer Products to be received (net of any taxes imposed on the Seller with
respect to such royalties) pursuant to such license agreement for the remaining
term thereof and (ii) the Company shall have the right to compel the Seller to
enforce the terms of such Consumer License Agreements.

            (d) Patents and Know-How Licenses. At the Closing, subject to any
pre-existing licenses previously disclosed to the Purchaser, the Seller shall
grant to the Company (i) a worldwide, exclusive, fully paid royalty-free license
to use the Seller's Retained Patents and Seller's Future Patents and the
Consumer Know-How owned by the Seller in and limited to the field of Corning
Consumer Products, and (ii) a non-exclusive, worldwide fully paid royalty-free
license to use the Seller's Retained Patents and Seller's Future Patents and the
<PAGE>
                                       44


Consumer Know-How owned by the Seller in and limited to the field of Durable
Consumer Products and Other Consumer Products, in each case pursuant to a
license agreement (the "Patent and Know-How License Agreement"), substantially
in the form attached hereto as Exhibit 5.09(d).

            (e) Corning Name. No interest in or right to use the name "CORNING"
or "PYREX" or "PYROCERAM" or any confusingly similar derivation or modification
thereof or any trademark, servicemark, trade dress, logo, domain name, URL
(universal resource locator), trade name or corporate name of the Seller,
including, without limitation, "Crown Corning" or "Corning Designs"
(collectively, the "Retained Names and Marks") is being transferred to the
Purchaser pursuant to the transactions contemplated hereby and, except as
expressly provided in the license agreements to be executed pursuant to this
Agreement, such rights of the Company and the Subsidiaries in the Retained Names
and Marks shall terminate as of the Closing. At the Closing, the Seller shall
grant to the Company a temporary trademark license: (i) to use the word
"Corning" followed by the word "Consumer" as part of the name of the Company or
any of the Subsidiaries for up to three years from the Closing Date; and (ii) to
continue using the "CORNING" trademark and tradename and the CROWN CORNING
trademark and tradename, both pursuant to a license agreement (the "Temporary
CORNING License Agreement"), substantially in the form attached hereto as
Exhibit 5.09(e). Except as expressly authorized in the Temporary CORNING License
Agreement, as soon as practicable, but not more than (i) three years following
the Closing in the case of signs, purchase orders, invoices, sales orders,
labels, letterhead, shipping documents, packaging materials, promotional
brochures and related items, and (ii) not more than five years following the
Closing in the case of molds, the Purchaser shall cause the Company and each
Subsidiary to remove or obliterate all the Retained Names and Marks from all of
the foregoing, and not to put into use after the Closing Date any additional
documents or materials bearing the Retained Names and Marks.

            (f) Further to the agreements of the Seller contained in this
Section 5.09, the Seller agrees that it will not renew any licenses that it has
discretion not to renew with respect to any of the Consumer Intellectual
Property after the Closing Date.

            (g) The Seller shall cooperate with the Company after the Closing to
facilitate the transfer to the Company of any and all applicable Consumer
Intellectual Property not licensed pursuant to this Section 5.09, to apply for
such renewals, divisions, continuations, or other similar protections as the
Company may reasonably request and to assign those rights to the Company and to
execute such other and further documents as may be reasonably necessary to
effectuate the transfers and licenses contemplated by this Section 5.09.

            SECTION 5.10. Corning Glass Center; Corning Plant Stores; Shared
Facility Agreement. (a) The Purchaser agrees to maintain the Company's
commercial arrangements with the Corning Glass Center, Corning, New York, for a
period of ten years following the 
<PAGE>
                                       45


Closing Date, on a pricing basis for Corning Consumer Products of the Company's
standard costs plus 15%; provided, however, that the Company shall not be
required to sell more than $4.0 million per year of Corning Consumer Products on
this basis.

            (b) The Company will continue to sell products to the Seller's
manufacturing facilities for a period of five years after the Closing Date, at
the same locations, in substantially the same quantities and on substantially
the same terms as during the twelve-month period prior to the date hereof.

            (c) At the Closing, the Seller and the Company shall enter into a
shared facility agreement (the "Shared Facility Agreement"), substantially in
the form attached hereto as Exhibit 5.10.

            SECTION 5.11. Greenville Supply Agreement; Transfer of Molds. At the
Closing, the Seller and the Purchaser or the Company shall enter into a supply
agreement (the "Greenville Supply Agreement"), substantially in the form
attached hereto as Exhibit 5.11. The Seller shall, on or before the Closing
Date, transfer to the Company the molds located in its Greenville facility and
used in the Business.

            SECTION 5.12. Technology Support Agreement. At the Closing, upon the
request of the Purchaser, the Seller shall enter into a technology support
agreement with the Purchaser or the Company (the "Technology Support
Agreement"), substantially in the form attached hereto as Exhibit 5.12.

            SECTION 5.13. Transition Services Agreement. At the Closing, upon
the request of the Purchaser, the Seller shall enter into a transition services
agreement with the Purchaser or the Company (the "Transition Services
Agreement"), substantially in the form attached hereto as Exhibit 5.13.

            SECTION 5.14. Actions Affecting the Closing Balance Sheet. On or
prior to the Closing Date, the Seller shall take or cause to be taken the
following actions:

            (a) The Seller shall contribute to the capital of the Company (or
      otherwise capitalize the Company) in satisfaction of all amounts
      outstanding under the Revolving Credit Agreement immediately prior to the
      Closing Date.

            (b) Pursuant to Sections 6.02(a) and (c), the Seller shall assume
      (and indemnify the Company in respect of), pursuant to an assumption
      agreement in form and substance reasonably acceptable to the Purchaser,
      certain post-retirement medical and life insurance liability obligations
      and pension liability obligations for certain Acquired Employees.
<PAGE>
                                       46


            (c) The Seller shall assume (and indemnify the Company in respect
      of) pursuant to an assumption agreement in form and substance reasonably
      acceptable to the Purchaser all liabilities of the Company and the
      Subsidiaries relating to workers' compensation and product liabilities to
      the extent based on or arising out of injuries, accidents or incidents the
      respective dates of occurrence of which were prior to the Closing Date
      (the "Pre-Closing Workers and Products Claims"). Prior to the Closing, the
      Company shall transfer any reserves for the Pre-Closing Workers and
      Products Claims by book-entry to the Seller.

            (d) The Seller will assign to the Company pursuant to an assignment
      agreement in form and substance reasonably acceptable to the Purchaser all
      emissions credits relating to the Business.

            (e) For purposes of calculating the amount of Indebtedness and cash
      on the Closing Balance Sheet, the transactions described in this Section
      5.14 shall be deemed to have occurred at the close of business on the day
      next preceding the Closing.

            SECTION 5.15. Foreign Sales Corporation. On or prior to the Closing
Date, the Seller shall cause the shares of capital stock of Foreign Sales
Corporation that are owned by the Company to be paid as a dividend to the Seller
or otherwise transferred from the Company to a Person other than the Company or
any Subsidiary.

            SECTION 5.16. Payment of Intercompany Accounts Payable. The
Purchaser shall cause the Company and/or the Subsidiaries to pay to the Seller
all accounts payable that are accrued prior to the Closing Date by the Company
or any such Subsidiary in respect of services or goods provided by the Seller to
the Company on an arms-length basis or invoices accrued by the Seller to third
parties on behalf of the Company on an arms-length basis as they become payable
in accordance with their terms and consistent with past practice and at the
prices on which such services or goods were provided or purchased.

            SECTION 5.17. Non-Competition. For a period of five years after the
Closing Date (the "Non-Competition Period"), neither the Seller nor any of its
Affiliates will manufacture, sell or distribute, or have any ownership interest
in or control any Person engaged in the manufacture, sale or distribution of,
products similar to Corning Consumer Products; provided, however, that the
foregoing shall not prohibit the Seller or any of its Affiliates from: (a)
owning, individually or collectively, directly or indirectly, securities of any
Person traded in a public market which engages in the manufacture, sale or
distribution of products similar to Corning Consumer Products, provided that the
Seller and its Affiliates do not, in the aggregate, own more than 5% of any
class of securities of such Person (other than the Company); (b) engaging in or
conducting any business contemplated by the Administrative
<PAGE>
                                       47


Services Agreement, the Greenville Supply Agreement, the Technology Support
Agreement or the Transition Services Agreement; (c) acquiring a diversified
company (the "Diversified Company") having not more than 20% of its sales or
$100,000,000 of revenues (based on its latest published annual audited financial
statements) attributable to the manufacture, sale and distribution of products
similar to Corning Consumer Products, so long as (i) the Seller shall promptly
notify the Purchaser of any such acquisition and (ii) the Seller or such
Affiliate shall cause the Diversified Company to dispose of the portion thereof
which has sales attributable to the manufacture, sale and distribution of
products similar to Corning Consumer Products within 24 months after such
acquisition; (d) owning less than 20% of the Shares of the Company; and (e)
manufacturing, selling and distributing Steuben Products, ceramic briquettes,
OEM Component Products for consumer household appliances, household cooking
ovens or ranges, products for lighting, computers, laboratory science,
electronics, medical applications, automobile and building windows, mirrors,
flatglass, television or display applications, liquid filtration products (other
than Stanadyne Products and final water filtration system products for home
use), OEM Component Product parts of water filtration system products for home
use, glass ceramic burner caps, glass ceramic cook tops, flat glass ceramic
stove windows and new products manufactured from flat glass ceramic by Eurokera,
S.N.C. or Keraglass, S.N.C. or their respective licensees for sale in Europe.
The parties agree that a remedy at law for any breach of any obligation under
this Section 5.17 will be inadequate and that in addition to any other rights
and remedies to which the Purchaser may be entitled hereunder, at law or in
equity, the Purchaser shall be entitled to injunctive relief and reimbursement
for all reasonable attorney's fees and other expenses incurred in connection
with the enforcement hereof. In the event this Section 5.17 is held to be in any
respect an unreasonable restriction upon the Seller or any of its Affiliates by
any court having competent jurisdiction, the court so holding may reduce the
geographic scope to which this Section 5.17 pertains and/or the period of time
for which it operates, or effect any other change to the extent necessary to
render this Section 5.17 enforceable by such court. As so modified, this Section
5.17 will continue in full force and effect. Such decision by a court of
competent jurisdiction shall not invalidate this Agreement, but this Agreement
shall be interpreted, construed and enforced as not containing such invalidated
provision.

            (b) The Seller agrees that for so long as the CORNING WARE and
PYROCERAM License Agreement has not expired or been terminated in accordance
with its terms, the Seller shall not (and will require any direct or indirect
transferee not to), without the prior consent of the Company, use and will not
license (and shall require any direct or indirect transferee not to license) the
"CORNING" trademark or any confusingly similar derivations or modifications
thereof in the Housewares field except that, for purposes of such restriction
"Housewares" shall not include Steuben Products, ceramic briquettes, OEM
Component Products for consumer household appliances, household cooking ovens or
ranges, products for lighting, computers, laboratory science, electronics,
medical applications, automobile and building windows, mirrors, flatglass,
television or display applications, liquid 
<PAGE>
                                       48


filtration products (other than Stanadyne Products and final water filtration
system products for home use), OEM Component Product parts of water filtration
system products for home use, glass ceramic burner caps, glass ceramic cook
tops, flat glass ceramic stove windows, and new products manufactured from flat
glass ceramic by Eurokera, S.N.C. or Keraglass, S.N.C. or their respective
licensees for sale in Europe. In addition, the Seller agrees that for so long as
the CORNING WARE and PYROCERAM License Agreement has not expired or been
terminated in accordance with its terms, it will not use (and will require any
direct or indirect transferee not to use) the trademarks CORNING WARE and CROWN
CORNING or any confusingly similar derivations or modifications thereof on any
products manufactured by it or any of its subsidiaries after the Closing Date,
and will not license (and will require any direct or indirect transferee not to
license) any such trademark, derivations or modifications, except that nothing
in this Section 5.17(b) (other than the first sentence hereof) shall preclude
Seller or any of its present or future Affiliates from using the CORNING
trademark. The Seller also agrees that for so long as the PYREX License
Agreement has not expired or been terminated in accordance with its terms, the
Seller shall not (and will require any direct or indirect transferee not to),
without the prior consent of the Company, use the PYREX trademark or any
confusingly similar derivations or modifications thereof in the field of Durable
Consumer Products and on or with respect to any other consumer products and will
not license (and will require any direct or indirect transferee not to license)
any such trademark, derivations or modifications.

            SECTION 5.18. Facility Financing Interests. On or prior to the
Closing Date, the Seller shall assign to the Company, and the Company shall
assume the Facility Financing Interests (except the Guaranty of Seller dated
August 18, 1988 to the Pennsylvania Department of Commerce (the "1988 Guaranty")
and the Guaranty Agreement dated as of December 1, 1992 between the Seller and
Pittsburgh National Bank relating to the Greencastle Facility (the "1992
Guaranty"), each of which relate solely to the Facility Financing Interests).
Notwithstanding anything to the contrary in this Agreement, the Facility
Financing Interests (except the 1988 Guaranty and the 1992 Guaranty) shall be
reflected as Indebtedness on the Closing Balance Sheet.

            SECTION 5.19. Stockholders Agreement. At the Closing, the Company,
Purchaser and the Seller shall enter into the Stockholders Agreement.

            SECTION 5.20. No Negotiation. Prior to the earlier of the
termination of this Agreement or the Closing, the Seller will not, and will
cause the Company, the Subsidiaries and their respective officers, directors,
employees and agents not to, initiate, solicit or encourage, directly or
indirectly, any inquiries or the making of any proposal with respect to, or
engage in any negotiations concerning, provide any confidential information or
data to, have any discussions with or enter into any agreements with, any Person
relating to any acquisition, business combination, reorganization or purchase of
all or any portion of the
<PAGE>
                                       49


capital stock or assets of the Company or the Subsidiaries other than in the
ordinary course of business and in compliance with the other provisions of this
Agreement with regard to assets of the Company and the Subsidiaries. The Seller
will, and will cause the Company and the Subsidiaries to, immediately cease and
cause to be terminated any existing activities, discussions or negotiations with
any parties conducted heretofore with respect to any such potential transactions
involving the Company and the Subsidiaries. The Seller agrees not to release any
third party from, or waive any provisions of, any confidentiality or standstill
agreement to which Seller or the Company is a party. The Seller will, and will
cause the Company and the Subsidiaries to, immediately notify the Purchaser if
any inquiries are received in respect of the Company and the Subsidiaries and
shall provide details with respect thereto.

            SECTION 5.21. Financial Statements and Reports. (a) As promptly as
practicable and in any event no later than 30 days after the end of each fiscal
month ending after the date hereof and before the Closing Date (other than the
last fiscal month) or sixty days after the end of each fiscal year ending after
the date hereof and before the Closing Date, as the case may be, the Seller will
deliver to the Purchaser true and complete copies of (in the case of any such
fiscal year) the audited and (in the case of any such fiscal month) the
unaudited consolidated balance sheets and the related audited or unaudited
consolidated statements of income and cash flows of the Company and the
Subsidiaries as of the last day of and for the fiscal year then ended or as of
the last day of and for each such fiscal month and the portion of the fiscal
year then ended, as the case may be, together with the notes, if any, relating
thereto, which financial statement shall be prepared on a basis consistent with
the Financial Statements referred to in Section 3.07.

            (b) As promptly as practicable, the Seller will deliver to the
Purchaser true and complete copies of such other regularly-prepared financial
statements, reports and analyses as may be prepared by the Seller, the Company
or any Subsidiary relating to the Business or operations of the Company or any
Subsidiary.

            SECTION 5.22. Insurance. From and after the Closing Date, the Seller
shall use its reasonable best efforts, subject to the terms of the Seller
Insurance Policies (as hereinafter defined), to retain the right, to the extent
the same exists and without the payment of any additional premiums or other fees
(or if additional premiums or other fees are payable, to advise the Company if
any right of recovery would exist upon the payment of such premiums or fees and,
if reimbursed by the Company therefor, to pay such premiums or fees), to make
claims and receive recoveries for the benefit of the Company, as well as for the
benefit of the Seller, under any insurance policies maintained at any time prior
to the Closing Date by the Seller and its predecessors (collectively, the
"Seller Insurance Policies"), covering any loss, liability, claim, damage or
expense relating to the assets, business, operations, conduct, products and
employees (including former employees) of the Company and its predecessors that
relates to or arises out of occurrences prior to the Closing and for which the
<PAGE>
                                       50


Company remains liable, has assumed liability or retains ownership of its
affected assets (as the case may be) after the Closing Date. With respect to the
foregoing, the Seller agrees to use its reasonable best efforts so that the
Company shall have the right, power and authority, subject to any required
consent of the carriers under the Seller Insurance Policies, to make directly or
in the name of the Seller any claims under the Seller Insurance Policies and to
receive directly recoveries thereunder.

            SECTION 5.23. Cumulative Gross Margin Payment. (a) As promptly as
practicable, but in any event not later than the earlier to occur of the public
availability of the 2000 Financial Statements or March 31, 2001, the Company
shall prepare and deliver to the Seller (i) the 2000 Financial Statements,
together with a report thereon of the Company's independent accountants (the
"Company's Accountants") to the effect that such financial statements fairly
present the results of operations of the Company and the Subsidiaries for the
period ended December 31, 2000, in conformity with U.S. GAAP; (ii) the
calculation of Cumulative Gross Margin and (iii) a certificate of the Company's
Accountants with respect to the calculation of Cumulative Gross Margin in
accordance with the definition of Gross Margin.

            (b) The Seller may dispute the amount of Cumulative Gross Margin as
calculated by the Company and the Company's Accountants, but only on the basis,
in the case of net sales and cost of sales, that the amounts reflected on the
2000 Financial Statements were not prepared in conformity with U.S. GAAP;
provided, however, that the Seller shall have notified the Company and the
Company's Accountants in writing of each disputed item, specifying the amount
thereof in dispute and setting forth, in reasonable detail, the basis for such
dispute, within 30 Business Days of the Purchaser's delivery of the 2000
Financial Statements and the calculation of Cumulative Gross Margin to the
Seller. The Company shall make available to the Seller and its representatives
all information, records, data and auditors' working papers and access to its
personnel as shall be reasonably requested by the Seller in connection with its
evaluation of the calculation of the Cumulative Gross Margin. In the event of
such a dispute, the Company's Accountants, together with the Company, and the
Seller's Accountants, together with the Seller, shall attempt to reconcile their
differences, and any resolution by them as to any disputed items shall be final,
binding and conclusive on the parties hereto. If the Company's Accountants,
together with the Company, and the Seller's Accountants, together with the
Seller, are unable to resolve any such dispute within 50 Business Days of the
Company's delivery of the calculation of Cumulative Gross Margin to the Seller,
and the items remaining in dispute are such that the Seller would receive at
least $250,000 pursuant to such items, if such items were resolved in favor of
the Seller, the Company's Accountants and the Seller's Accountants shall
promptly submit the items remaining in dispute for resolution to the Independent
Accounting Firm, which shall, within 40 Business Days after such submission,
determine and report to the Seller and the Company upon such remaining disputed
items, and such report shall be final, binding and conclusive on
<PAGE>
                                       51


the Seller and the Company. The fees and disbursements of the Independent
Accounting Firm shall be allocated between the Seller and the Company in the
same proportion that the aggregate amount of such remaining disputed items so
submitted to the Independent Accounting Firm that is unsuccessfully disputed by
each such party (as finally determined by the Independent Accounting Firm) bears
to the total amount of such remaining disputed items to submitted.

            (c) The calculation of Cumulative Gross Margin shall be deemed final
for the purposes of this Section 5.23 upon the earliest of (A) the failure of
the Seller to notify the Company of a dispute within 30 Business Days of the
Company's delivery of the 2000 Financial Statements and the calculation of the
Cumulative Gross Margin to the Seller, (B) the resolution of all disputes,
pursuant to subsection (b) of this Section 5.23, by the Seller's Accountants and
the Company's Accountants and (C) the resolution of all disputes, pursuant to
subsection (b) of this Section 5.23, by the Independent Accounting Firm. Within
three Business Days of the calculation of Cumulative Gross Margin being deemed
final, the Company shall take the actions described in subsection (d) of this
Section 5.23. Any payment that the Company may be obligated to make to the
Seller pursuant to subsection (d) of this Section 5.23, shall be made by wire
transfer in immediately available funds to an account or accounts designated by
the Seller.

            (d) In the event that the Cumulative Gross Margin is greater than
$710,900,000, then the Company shall pay to the Seller one dollar for each
dollar by which the Cumulative Gross Margin exceeds $710,900,000, up to a
maximum of $15,000,000. In the event that the Cumulative Gross Margin is less
than $710,900,000, the Company shall make no payment to the Seller pursuant to
this Section 5.23.

            SECTION 5.24. Information Systems. (a) Prior to the Closing, the
Seller will use reasonable best efforts to cause the Company to continue to
implement, and make capital expenditures in respect of, the CCPC Year 2000 plan
(which has been provided to the Purchaser prior to the date of this Agreement)
(the "Systems Plan") in accordance with its terms.

            (b) The Seller will extend information systems transitional services
under the Transition Services Agreement until the implementation of the Systems
Plan is substantially complete or the date of the first anniversary of the
expiration of the Transition Services Agreement (whichever is sooner); provided,
however, that the Seller intends to discontinue its mainframe information system
facilities on or about June 30, 1999. In connection with such discontinuance,
the Seller will provide reasonable assistance to the Company (at the Company's
expense) with respect to obtaining mainframe information services from third
party suppliers. After June 30, 1999, in the event the Company requests that the
Seller renew its lease for such mainframe facilities so as to provide mainframe
information system services to the Company until December 31, 1999, the cost of
such renewal, together with the lease payments payable under such renewal leases
shall be shared 
<PAGE>
                                       52


equally by the Seller and the Company (without duplication of any payments to be
made by the Company to the Seller under the Transition Services Agreement).
Notwithstanding the foregoing, there can be no assurance that such lease can be
renewed by the Seller or that the mainframe facilities provided thereunder will
not fail prior to December 31, 1999.

            SECTION 5.25. Reasonable Best Efforts. Purchaser and Seller agree to
use their respective reasonable best efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things necessary, proper or
advisable, to consummate and make effective the transactions contemplated by
this Agreement as promptly as practicable after the date hereof.

                                  ARTICLE VI

                               EMPLOYEE MATTERS

            SECTION 6.01. Employees. (a) The Purchaser agrees to cause the
Company or the Subsidiaries to continue immediately after the Closing the
employment of those persons employed by the Company or any Subsidiary
immediately prior to the Closing, including those employees on vacation, leave
of absence, short-term disability (work-related or otherwise), sick leave or
layoff, (provided that any such employee on vacation, leave of absence,
short-term disability or sick leave returns to active employment promptly
following the expiration of such period of absence and in any event within one
year following the Closing), but excluding employees receiving long-term
disability benefits at the time of the Closing and employees subject to the
Pressware Union Agreement (as defined below) (the "Acquired Employees");
provided, however, that the foregoing does not obligate the Purchaser, the
Company or any Subsidiary at any subsequent time to employ any particular person
on any particular terms, except as specifically provided in this Article VI, and
nothing herein shall restrict the Company or any Subsidiary from terminating the
employment of any employee for any reason.

            (b) The Purchaser agrees to cause the Company and the Subsidiaries
to continue to provide each Acquired Employee with salary and benefits levels
(other than equity-based compensation and the Performance Improvement Plan)
("Compensation") that are substantially similar in aggregate economic value, to
those provided to the Acquired Employee immediately prior to the Closing, for
five years after the Closing Date for any Acquired Employee who is not a member
of a collective bargaining unit or until the expiration of the relevant
collective bargaining agreement in effect on the Closing Date with respect to
any Acquired Employee who is a member of a collective bargaining unit, (as
applicable, the "Continuation Period"); provided, however, (i) that if the
Seller reduces or modifies its Compensation level or any portion thereof for any
group or groups of its employees, the Purchaser may permit the Company or the
Subsidiaries to make commensurate modifications 
<PAGE>
                                       53


to the Compensation or any portion thereof affecting a substantially similar
group or groups of the Acquired Employees (by size or function, as the case may
be); and (ii) that, subject to compliance with the other provisions of this
Article VI and applicable law, after the Closing Date, the foregoing shall not
obligate the Purchaser to maintain a particular level of employment, which shall
be subject to the discretion of management of the Purchaser. The Seller agrees
to give the Company written notice of any proposed modification or reduction of
Compensation promptly (and in no event later than the effectiveness of such
modification or reduction). The Purchaser agrees to give the Seller prompt
written notice of the benefits it intends to provide Acquired Employees pursuant
to this Section 6.01(b) during the Continuation Period promptly following the
implementation (and any subsequent amendment) of such benefits.

            (c) From and after the Closing, the Company and the Subsidiaries
shall be solely responsible for all termination, severance benefits, costs,
charges and liabilities of any nature incurred as a result of the termination of
an Acquired Employee after the Closing, including, without limitation, any
claims arising out of or relating to any plant closing, mass layoff or similar
event under applicable law occurring after the Closing (collectively,
"Termination Benefits"). For a period of one year following the Closing Date
(the "Benefit Maintenance Period"), Termination Benefits for employees of the
Company and the Subsidiaries shall be paid by the Company in the amounts and
kind which the Company and the Subsidiaries would have paid consistent with past
practice under similar circumstances of termination (including the amounts
required by law, plus any amounts required by any collective bargaining
agreement, plus any additional amounts customarily paid by the Company and the
Subsidiaries). The Termination Benefits of the Company and the Subsidiaries as
of the date of this Agreement are described in Section 6.01(c) of the Disclosure
Schedule.

            SECTION 6.02. Employee Benefits Arrangements. (a) Pension Plans. (i)
Prior to the Closing Date, the Seller shall amend the Pension Plan of Corning
Incorporated (the "Corning Pension Plan") so that following the Closing Date,
(A) subject to clauses (C), (D) and (E) below, Acquired Employees currently
participating in the Corning Pension Plan shall cease to accrue benefits in such
plan, although the accrued benefits of such Acquired Employees as of the Closing
Date (as well as the accrued benefits of former employees of the Company and the
Subsidiaries and their beneficiaries) shall be retained by the Corning Pension
Plan as an exclusive obligation of the Seller, (B) Acquired Employees' service
with the Company or any Subsidiary after the Closing Date will be taken into
account for purposes of determining vesting under the Corning Pension Plan, (C)
no additional years of credited service shall be provided to and no changes in
average compensation or social security benefits shall be recognized for the
Acquired Employees for plan benefit formula purposes, (D) service with the
Company or any Subsidiary after the Closing Date will be taken into account for
purposes of determining eligibility for early retirement subsidies, optional
benefit forms and 
<PAGE>
                                       54


ancillary benefits with respect to the benefits accrued under the Corning
Pension Plan and (E) with respect to the benefits for employees paid on an
hourly basis ("Hourly Employees"), no increases in the monthly benefit rate
beyond that in effect at the Closing Date shall be provided, other than future
rate increases that, as of the Closing Date, are scheduled to be effective on or
subsequent to the Closing Date. Notwithstanding the foregoing clauses (A) and
(C), the Seller shall amend the Corning Pension Plan, at such time, if any,
during the Continuation Period that it implements a periodic update of average
compensation for participants in such plan then employed by Seller and its
subsidiaries, to increase the accrued benefits of Acquired Employees who have
benefits based on compensation (i.e., those on the "salaried roll") in a manner
consistent with periodic increases provided to such employees in the past based
on average compensation and credited service as of the Closing Date.

            (ii) Effective as of the Closing Date, the Purchaser will cause the
Company to establish a pension plan (the "New Defined Benefit Plan") providing
pension benefits for each Acquired Employee, other than Hourly Employees of
Revere Ware Corporation ("Revere Hourly Employees") and the Foreign
Subsidiaries, which are substantially similar in aggregate economic value,
consistent with the applicable collective bargaining agreements, to those
provided by the Corning Pension Plan as of the Closing Date, and which for the
Hourly Employees covered thereunder reflect all increases in monthly benefit
rates scheduled to be effective subsequent to the Closing Date; provided,
however, that nothing in this Section 6.02(a)(ii) shall limit or relieve
Seller's obligations under Section 6.02(a)(i). The Purchaser agrees to cause the
Company and the Subsidiaries to maintain the New Defined Benefit Plan without
any amendments inconsistent with the foregoing sentence for the Benefit
Maintenance Period; provided, however, that if the Seller reduces or modifies
its benefit levels under the Corning Pension Plan for any group or groups of its
employees, the Purchaser may make commensurate modifications to the New Defined
Benefit Plan affecting a substantially similar group or groups of the Acquired
Employees (by size or function, as the case may be). The Seller agrees to give
the Company written notice of any proposed modification or reduction of benefits
under the Corning Pension Plan promptly (and in no event later than the
effectiveness of such modification or reduction). With respect to Acquired
Employees generally, the Purchaser shall cause the Company and its Subsidiaries
to provide under the New Defined Benefit Plan pension benefits which recognize
service, compensation and social security benefits with the Company and the
Subsidiaries, both before and after the Closing Date, for purposes of vesting,
participation and eligibility for early retirement subsidies, optional benefit
forms and ancillary benefits (to the extent relevant), but not for benefit
accruals, to the extent that these would have been taken into account under the
Corning Pension Plan. The New Defined Benefit Plan shall not be required to
recognize any final or career average updates of compensation and,
notwithstanding Seller's practice of periodically providing such updates, it
shall not be considered a reduction of benefits under this Article VI if the New
Defined Benefit Plan does not provide for such updates.
<PAGE>
                                       55


            (iii) The Purchaser shall cause the Company or its Subsidiaries to
continue to maintain the Revere Hourly Pension Plans (the "Revere Plan") for
current and former Revere Hourly Employees consistent with the applicable
collective bargaining agreements.

            (iv) The Purchaser shall cause the Company and the Foreign
Subsidiaries to continue to maintain during the Benefit Maintenance Period any
pension plan of a Foreign Subsidiary in effect on the Closing Date for current
and former employees of such Foreign Subsidiary without any amendments thereto
during the Benefit Maintenance Period that would cause the benefits for an
employee under such plan not to be substantially similar in aggregate economic
value to the benefits provided as of the Closing Date, except as may be required
by applicable local law.

            (b) Investment/401(k) Plans. (i) Effective as of the Closing Date,
Acquired Employees shall no longer accrue benefits under the Corning
Incorporated Investment Plan and the Corning Incorporated Investment Plan for
Unionized Employees (the "Corning 401(k) Plans") in the capacity of employees of
Seller or one of its subsidiaries. The Seller shall cause employer matching and
retirement enhancement contributions for Employees with respect to the period up
to and including the Closing Date to be made to the Corning 401(k) Plans. The
Seller will amend the Corning 401(k) Plans to provide full vesting as of the
Closing Date to all Acquired Employees covered by the Corning 401(k) Plans as of
the Closing Date.

            (ii) For so long as the Seller continues to provide payroll services
to the Purchaser with respect to the Acquired Employees, the Acquired Employees
(other than Acquired Employees of the Foreign Subsidiaries) shall continue to
participate in the Corning 401(k) Plans, which shall be maintained as multiple
employer plans for this purpose. Thereafter, the Purchaser shall cause the
Company or its Subsidiaries to establish one or more "401(k)" plans for the
Acquired Employees (the "New 401(k) Plans"), other than Acquired Employees of
the Foreign Subsidiaries. For the purpose of determining vesting and employer
matching and retirement enhancement contributions, the New 401(k) Plans shall
recognize service that the Acquired Employees had with the Company or its
Subsidiaries before the Closing Date. As soon as practicable following the
establishment of the New 401(k) Plans and the Seller's and the Purchaser's
receipt of the assurances described in Section 6.02(b)(iii) below, the Seller
shall cause an amount in cash, equal to the aggregate account balances of the
Acquired Employees participating in Corning 401(k) Plans as of the close of the
business day immediately preceding the date of transfer, to be transferred to
the trust or trusts maintained with respect to the New 401(k) Plans, and the
Purchaser shall assume all liabilities with respect to such account balances.
The Purchaser and the Seller shall cooperate to establish procedures to enable
Acquired Employees to continue payroll deductions consistent with past practices
for loans outstanding on and after the date of the transfer of account balances
under the Corning 401(k) Plans.
<PAGE>
                                       56


            (iii) On or as soon as practicable following the adoption of the New
401(k) Plans, each of the Purchaser and the Seller shall provide the other party
with reasonably satisfactory assurances (which may include, without limitation,
a favorable determination letter issued by the IRS) as to the qualification,
respectively, of the New 401(k) Plans and the Corning 401(k) Plans under Section
401(a) of the Code.

            (c) Welfare and Fringe Benefit Plans. (i) Subject to the other terms
hereof, during the Benefit Maintenance Period, the Purchaser will cause the
Company and its Subsidiaries to provide each Acquired Employee with welfare
benefits substantially similar in aggregate economic value consistent with
applicable collective bargaining agreements to those provided to such Acquired
Employee immediately prior to the Closing Date in the areas generally of
medical, vision care, hearing aid, dental assistance, flexible spending
accounts, life insurance, post-retirement medical, post-retirement life
insurance, vacation, severance, salary continuation, accidental death and
dismemberment, dependent life insurance, business travel accident insurance,
adoption assistance, short-term disability, long-term disability, workers'
compensation, tuition refunds and educational leave, compensation/bonus plans
(including "Goalsharing benefits", but not including matching gifts, service
awards or the Worldwide Employee Stock Purchase Plan, the Performance
Improvement Plan or any other equity-based plan), and non-qualified supplemental
pension and deferred compensation arrangements as such employees had with the
Company or its Subsidiaries immediately prior to the Closing Date (it being
acknowledged and agreed that the Company shall not be required to maintain all
of the following so long as the aggregate economic benefit provided to an
Acquired Employee are substantially equivalent to the aggregate benefits
provided to such employee prior to the Closing Date) (the "Existing Benefit
Plans"); provided, however, that the Purchaser will cause the Company or its
Subsidiaries to continue to maintain the Revere Post-Retirement Benefit Plan
(the "Revere Post-Retirement Plan") consistent with applicable collective
bargaining agreements for the Benefit Maintenance Period; provided further that
if the Seller reduces or modifies the benefit levels under its post-retirement
medical and/or life insurance plans for any group or groups of its employees,
the Purchaser may make commensurate modifications to the Revere Post-Retirement
Plan for a substantially similar group or groups of Revere Ware Corporation
employees (by size or function, as the case may be). Notwithstanding the above,
however, other than with regard to employees of Revere Ware Corporation and the
Foreign Subsidiaries, neither the Purchaser nor the Company nor the Subsidiaries
shall be required to provide post-retirement medical and/or life insurance
benefits for former employees of the Company or any of its Subsidiaries or
Acquired Employees who are eligible to retire as of the Closing Date, it being
hereby agreed that such post-retirement benefits shall be provided by the Seller
under the same terms and conditions as the Seller may, from time to time, apply
to similarly situated employees (or, if there are no similarly situated
employees, as provided to other employees of the Seller), or at such higher
level as the retirees may be entitled to under applicable law. For such
post-retirement medical benefits, service with the Company or its Subsidiaries
after the Closing Date will be taken into 
<PAGE>
                                       57


account only in determining the retiree's contributions with respect to their
benefits. With regard to such post-retirement life insurance, the Seller is not
obligated to provide any amounts other than those earned as of the Closing Date.
The Purchaser agrees to cause the Company and its Subsidiaries to maintain the
Existing Benefit Plans without any amendments inconsistent with the first
sentence of this paragraph (i) which would reduce benefit levels for the Benefit
Maintenance Period; provided, however, that if the Seller reduces or modifies
its benefit levels for any group or groups of its employees under any of its
benefits plans which is substantially similar to one of the Existing Benefit
Plans, the Purchaser may make commensurate modifications to the applicable,
corresponding Existing Benefit Plan for a substantially similar group or groups
of Acquired Employees (by size or function, as the case may be). The Seller
agrees to give the Company written notice of any proposed modification or
reduction of benefits under any of its benefit plans which is substantially
similar to one of the Existing Benefit Plans promptly (and in no event later
than the effectiveness of such modification or reduction).

            (ii) The Purchaser shall cause the Company and the Subsidiaries to
give credit to Acquired Employees for all service with the Company, its
Subsidiaries or the Seller for the purpose of determining eligibility for any of
the Existing Benefit Plans to be provided in accordance with this Section and
for determining the amount and duration of any benefits under the Existing
Benefit Plans; provided, however, that such credit does not result in
duplication of benefits.

            (d) Collective Bargaining Agreements. (i) Following the Closing
Date, the Purchaser shall cause the Company and the Subsidiaries to continue to
perform their respective obligations under the collective bargaining agreements
set forth on Section 6.02(d)(i) of the Disclosure Schedule. For the collective
bargaining agreements set forth on Section 6.02(d)(ii) of the Disclosure
Schedule, the Purchaser and the Seller shall cooperate so as to enable the
Company to recognize and assume such agreements where possible or to perform the
Seller's duties and obligations under and to otherwise abide by such agreements.

            (ii) The Purchaser has received a copy of the Memorandum of
Understanding between the Seller and the Company and The American Flint Glass
Workers Union AFL-CIO, Including Local 1000, dated as of June 12, 1997 (the
"Pressware Union Agreement"). Accordingly, the Purchaser and the Seller agree as
follows with respect to the Pressware Union Agreement:

            (A) the Purchaser agrees to take all actions which the Seller
      undertook in the Pressware Union Agreement to require of the Purchaser;

            (B) the Purchaser agrees to cause the Company to take all actions
      which the Pressware Union Agreement requires or contemplates that the
      Company shall take;
<PAGE>
                                       58


            (C) the Seller agrees to take all action which the Pressware Union
      Agreement requires or contemplates that the Seller shall take;

            (D) the Seller and the Purchaser agree to cooperate to ensure that
      the Pressware Union Agreement will be implemented so as to accomplish the
      intended purposes thereof;

            (E) the Seller agrees to reimburse the Company and/or the Purchaser
      (or, where appropriate, to pay) for the following payments (net of any tax
      savings by the Company or the Purchaser realized in connection with such
      payments but only at such time and to such extent as such tax savings are
      actually realized) to Pressware employees under the terms of the Pressware
      Union Agreement, within 10 days of the Seller's receipt of the Company's
      (or the Purchaser's) invoices therefor: (1) special financial inducements
      pursuant to Section 2(A) of the Pressware Union Agreement in amounts
      consistent with those previously disclosed by the Seller to the Purchaser
      and consistent with the Employee Incentive Retention Plan and the
      Pressware Retention Incentive Plan and (2) special cash awards under
      Section 2(C) of the Pressware Union Agreement; and

            (F) the Seller shall take all actions necessary to ensure that there
      will be no "bumping" of employees from the Seller or any of its Affiliates
      to the Company or any Subsidiary after the Closing.

            (iii) After the Closing Date, the Seller shall, at the Purchaser's
request, lease to the Company, on terms reasonably satisfactory to the Seller,
the Company and the Purchaser, those employees (the "Leased Employees") who are
employed at the Company's Pressware facility on the Closing Date and who choose,
in accordance with the Pressware Union Agreement, to remain employees of the
Seller. The Company shall reimburse the Seller for all costs and expenses
incurred by the Seller in connection with the lease of the Leased Employees.
Such costs and expenses shall be calculated in a manner consistent with the
Seller's customary practices prior to the Closing Date of calculating costs and
expenses related to the Company's employees for accounting purposes.

            (e) Retention Program. In addition to the Pressware Union Agreement,
the Seller has caused the Company to adopt a retention program for key employees
(the "Key Employee Retention Program"). Following the Closing, the Purchaser
shall cause the Company and the Subsidiaries to implement the Key Employee
Retention Program, and the Seller shall reimburse the Company or the Purchaser,
as the case may be, for all payments made after the Closing Date to employees
under such programs (net of any tax savings by the Company or the Purchaser
realized in connection with such payments but only at such time 
<PAGE>
                                       59


and to such extent as such tax savings is actually realized), within 30 days
after the Seller's receipt of the invoice(s) of the Company or the Purchaser
therefor.

            (f) Employee Discounts. Until the fifth anniversary of the Closing
Date, the Purchaser will cause the Company and its Subsidiaries to continue the
30% discount policy in Company stores for employees and retirees of the Seller,
the Company and the Subsidiaries.

            (g) Pension Benefit Guaranty Corporation Requirements. Subject to
Section 6.09, the Purchaser agrees to cooperate reasonably, at the Seller's
expense, with the Seller to attempt to resolve any requirements imposed by the
PBGC with respect to the Corning Pension Plan and the Revere Plan during the
Continuation Period, but only to the extent that such cooperation does not
result in any liability to the Purchaser, the Company or any Subsidiary or to
any of their respective officers, directors or stockholders.

            SECTION 6.03. Goal Sharing Plan and Performance Improvement Plan.
The Seller shall reimburse the Company and the Subsidiaries for a pro rata
portion of any payments required to be made by any of them under the Goal
Sharing Plan for 1998 based on the number of days before the Closing Date during
the fiscal year ending in 1998 to the extent that the obligation for any such
payments is not accrued and reflected on the Final Closing Working Capital
Statement. The Seller also shall reimburse the Company and the Subsidiaries for
all amounts payable under the Performance Improvement Plan, which amounts shall
be based on performance for fiscal year ending 1998 prorated for the period
prior to the Closing Date.

            SECTION 6.04. Stock Options. All options to acquire the Seller's
common stock held by the Acquired Employees that are intended to qualify as
Incentive Stock Options (within the meaning of Code Section 422(b)) shall remain
Incentive Stock Options for a period of 90 days following the Closing Date and
shall thereafter be converted into nonqualified stock options which, together
with any stock options not intended to qualify as Incentive Stock Options, shall
remain exercisable for a period of the shorter of three years following the
Closing Date or the remaining term of such option (the "Option Exercise
Period"); provided, however, that such three-year extension period shall not
apply to stock options granted prior to December 4, 1991, which options'
exercisability following the Closing Date shall remain subject to the terms
currently applicable thereto. All stock options referred to above shall continue
to vest during the Option Exercise Period as if the holders thereof remained
employed by the Seller or one of its Subsidiaries.

            SECTION 6.05. Supplemental Plans. The Seller shall cause the
Acquired Employees who participate in the Supplemental Investment Plan to become
fully vested thereunder as of the Closing, and the account balances of such
Acquired Employees shall be paid to them in cash promptly thereafter in
accordance with the terms of such plan. Acquired 
<PAGE>
                                       60


Employees who participate in the Seller's Supplemental Pension Plan shall
receive vesting credit for service with the Company for any Subsidiary following
the Closing and, notwithstanding the terms of such Plan, shall vest in
accordance with the vesting schedule contained in the Corning Pension Plan.

            SECTION 6.06. Medical Costs. The Seller shall be liable for, and
indemnify and hold harmless the Purchaser, the Company and the Subsidiaries
against, any and all Losses arising out of medical, dental and similar health
related claims incurred by the Acquired Employees on or prior to the Closing
Date other than claims incurred under any Company Benefit Plan. For this
purpose, a claim is "incurred" on the date the relevant treatment is rendered.

            SECTION 6.07. Cooperation. The Seller shall cooperate with the
Purchaser with respect to compliance with the covenants set forth in this
Article VI, including entering into a transition services agreement with the
Purchaser to provide for continued benefit coverage to Acquired Employees
immediately after the Closing. The Seller also shall provide the Purchaser with
any documents relating to the Seller Benefit Plans in which Employees
participate that the Purchaser may reasonably request to enable the Purchaser to
satisfy its obligations under this Article VI.

            SECTION 6.08. Remedies. The Purchaser acknowledges that a breach of
its obligations under this Article VI may cause irreparable injury to the Seller
in its goodwill, its reputation, and its employee relations, in addition to
monetary damages, which may be difficult to calculate, predict or limit, and
agrees that equitable relief, including, but not limited to, specific
enforcement of its obligations hereunder, may be appropriate (in addition to
indemnification pursuant to Article IX hereof) to prevent such breach.
Accordingly, without limiting the generality of Section 11.12, the Purchaser
agrees that it will not oppose a petition by the Seller for equitable relief
with respect to a threatened or actual breach of the Purchaser's obligations
under this Article VI on the grounds that such relief is inappropriate.

            SECTION 6.09. Indemnification. The Seller shall indemnify and hold
harmless the Company, any of its Subsidiaries, their respective officers,
directors, successors and permitted transferees and assigns and each New Company
Benefit Plan against any and all Losses arising out of or relating to (i) any
Seller Benefit Plan or other Benefit Plan sponsored, maintained or contributed
to by the Seller or any ERISA Affiliate (and any Benefit Plan no longer in
effect that was previously sponsored, maintained or contributed to by the Seller
or any ERISA Affiliate), whether arising out of or relating to any event or
state of facts occurring or existing before, on or after the Closing Date, and
including, without limitation, any liabilities arising under Title IV of ERISA,
Section 302 of ERISA and section 412 or 4971 of the Code, (ii) the separation,
division, allocation, unwinding or similar event involving the liabilities of
the joint venture between Vitro S.A. and the Company with respect to Benefit
<PAGE>
                                       61


Plans, (iii) the pension plan asset transfer executed pursuant to the Agreement
of Purchase and Sale of Assets, dated April 28, 1988, and the Pension
Contribution and Asset Transfer Letter Agreement, dated June 22, 1988, (iv) any
post-retirement medical and/or life insurance benefit for Acquired Employees who
are eligible to retire as of the Closing Date and former Employees of the
Company or any of its Subsidiaries (other than Employees of Revere Ware and the
Foreign Subsidiaries), (v) any individual who is on "loan" status to the
Pressware plant pursuant to the Pressware Union Agreement, and (vi) any
obligation to make special financial payments pursuant to the Pressware Union
Agreement, including Section 2(A), 2(B) or 2(C) thereof, in excess of any
amounts reimbursed pursuant to Section 6.02(d)(ii)(E) hereof.

            SECTION 6.10. Survival. The covenants and agreements of the parties
hereto contained in this Article VI shall survive the Closing and shall remain
in full force and effect until the expiration of all statutes of limitations
with respect to the respective matters set forth herein.

                                  ARTICLE VII

                                  TAX MATTERS

            SECTION 7.01. Tax Indemnities. (a) Except to the extent reserved for
on the Closing Balance Sheet (but only to the extent such reserve is taken into
account in determining the Cash Dividend Amount adjustment under Section 2.04(c)
hereof) from and after the Closing Date, without duplication, the Seller shall
indemnify the Purchaser and the Company and their Affiliates against all Taxes
(including reasonable attorneys' and accountants' fees and other reasonable
out-of-pocket expenses incurred in connection therewith) (i) imposed on or
payable by the Company or any Subsidiary with respect to any taxable period or
portion thereof that ends on or before the Closing Date (including any taxes
allocated to such period under Section 7.01(d) hereof), (ii) imposed on or
payable by the Company or any Subsidiary under Treasury Regulation 1.1502-6 (or
any similar provision of state, local or foreign law) by reason of the Company
or any Subsidiary being included in any consolidated, affiliated, combined or
unitary group at any time on or before the Closing Date, (iii) imposed on or
payable by the Company or any Subsidiary as a result of (A) the Code section
338(h)(10) Election with respect to the Company and Revere Ware Corporation
referred to in Section 7.07 and (B) an actual election under a state or local
provision which is analogous or comparable to Code Section 338(h)(10); (iv)
relating to Foreign Sales Corporation or imposed as a result of the transactions
contemplated by Section 5.15 hereof, (v) relating to any payments required to be
made after the Closing Date under any Tax indemnity, Tax sharing, or Tax
allocation agreement between the Seller and the Company under which the Company
was obligated, or was a party, on or prior to the Closing Date, and (vi) arising
from the breach of any representation, warranty or covenant of Seller with
respect to Taxes under this 
<PAGE>
                                       62


Agreement. No indemnity shall be provided under this Agreement for any Taxes
resulting from any transaction of the Company or any Subsidiary occurring on the
Closing Date after the Closing that is not in the ordinary course of business.

            (b) From and after the Closing Date, without duplication, the
Purchaser and the Company shall indemnify the Seller and its Affiliates against
all Taxes (including reasonable attorneys' and accountants' fees and other
reasonable out-of-pocket expenses incurred in connection therewith) (i) arising
from the breach of any representation, warranty or covenant of Purchaser with
respect to Taxes under this Agreement or (ii) imposed on the Company and the
Subsidiaries, which Taxes are not subject to indemnification pursuant to
paragraph (a) of this Section 7.01, including, but not limited to, Taxes (A)
resulting from any transaction of the Company and the Subsidiaries occurring
after the Closing Date or on the Closing Date after the Closing that is not in
the ordinary course of business or (B) with respect to any taxable period or
portion thereof that begins after the Closing Date and that are imposed on the
Company or any of the Subsidiaries.

            (c) Payment by the indemnitor of any amount due under this Section
7.01 shall be made within ten days following written notice by the indemnitee
that payment of such amounts to the appropriate tax authority is due, provided
that the indemnitor shall not be required to make any payment earlier than two
days before it is due to the appropriate tax authority. If the Seller receives
an assessment or other notice of Taxes due with respect to the Company or any of
the Subsidiaries for any period for which the Seller is not responsible, in
whole or in part, pursuant to paragraph (a) of this Section 7.01, then the
Purchaser shall pay such Tax, or if the Seller pays such Tax, then the Purchaser
or the Company shall pay to the Seller, in accordance with the first sentence of
this Section 7.01(c), the amount of such Tax for which the Seller is not
responsible. In the case of a Tax that is contested in accordance with the
provisions of Section 7.03, payment of the Tax to the appropriate tax authority
will not be considered to be due earlier than the date a final determination to
such effect is made by the appropriate taxing authority or court. Final
determination shall have the meaning as set forth in 1313(a) of the Code.

            (d) Seller and Purchaser shall, to the extent permitted by
applicable law and except as otherwise provided herein, elect with the relevant
taxing authority to close the taxable period of the Company and the Subsidiaries
at the end of the day on the Closing Date. For purposes of this Agreement, in
the case of any Tax that is imposed on a periodic basis and is payable for a
taxable period that begins before the Closing Date and ends after the Closing
Date (including without limitation any Taxes resulting from a Tax audit or
administrative court proceeding), the portion of such Taxes which is payable for
the portion of such taxable period ending on the Closing Date shall be (i) in
the case of any Tax other than a Tax based upon or measured by income or
receipts, the amount of such Tax for the entire taxable period (or, in the case
of such Taxes determined on an arrears basis, the amount of 
<PAGE>
                                       63


such Tax for the immediately preceding period) multiplied by a fraction, the
numerator of which is the number of days in the portion of such taxable period
ending on the Closing Date and the denominator of which is the number of days in
the entire taxable period and (ii) in the case of a Tax based upon or measured
by income or receipts, the amount which would be payable if the relevant taxable
period ended on the Closing Date. Any credit or refund resulting from an
overpayment of Taxes shall be prorated based upon the method employed in clause
(ii) of the immediately preceding sentence. In the case of any Tax based upon or
measured by capital (including net worth or long-term debt) or intangibles, any
amount thereof required to be allocated under this Section 7.01(d) shall be
computed by reference to the level of such items on the Closing Date. The
taxable period of any partnership or other pass-through entity in which the
Company or any Subsidiary is a partner or other beneficial interest holder shall
be deemed to terminate on the Closing Date. All determinations necessary to
effect the foregoing allocations shall be made in a manner consistent with prior
practice of the Company and the Subsidiaries.

            SECTION 7.02. Refunds and Tax Benefits. (a) Subject to paragraph (b)
of this Section 7.02, the Purchaser shall promptly pay to the Seller the amount
of any refund or credit or offset (including any interest paid or credited or
any offset allowed with respect thereto but reduced by any Taxes that the
Purchaser, the Company or any Subsidiary shall be required to pay with respect
thereto) received or used, in the case of a credit or offset, by the Purchaser,
the Company or any Subsidiary of Taxes (i) relating to taxable periods or
portions thereof ending on or before the Closing Date (including any Taxes
allocated to such period under Section 7.01(d) hereof) provided Seller would be
liable for such Taxes under Section 7.01(a) hereof, and only to the extent that
any such refunds or credits or offsets are in excess of the amount of refunds
for Taxes reflected on the Closing Balance Sheet (but only to the extent such
refund is taken into account in determining the Cash Dividend Amount adjustment
under Section 2.04(c) hereof) or (ii) attributable to an amount paid by the
Seller under Section 7.01 hereof. The amount of any refunds or credits or
offsets (including any interest paid or credited with respect thereto) received
by the Purchaser, the Company or any Subsidiary shall be for the account of the
Purchaser if (i) the refund, credit or offset is of Taxes (A) relating to
taxable periods or portions thereof that begin on or after the Closing Date
(including any Taxes allocated to such period under Section 7.01(d) hereof) or
(B) relating to taxable periods or portions thereof ending on or before the
Closing Date provided such refund, credit or offset relates to Taxes for which
Seller would not be liable under Section 7.01(a) hereof, or (ii) the refund,
credit or offset relates to an adjustment to a taxable period that begins before
the Closing Date that arises from an adjustment to a taxable period beginning on
or after the Closing Date, but only, in the case of items referred to in clause
(ii), if the adjustment would not impose a material Tax cost or otherwise
materially adversely affect the Seller or any of its Affiliates. The Purchaser
shall, if the Seller so requests and at the Seller's expense, cause the relevant
entity to file for and use its reasonable best efforts to obtain and expedite
the receipt of any refund to which the Seller is entitled under this Section
7.02, provided, however, that
<PAGE>
                                       64


the Purchaser must consent to any such refund claim, which consent may not be
unreasonably withheld (for this purpose, withholding of consent shall be
reasonable if such refund claim could reasonably be expected to have a material
tax cost or otherwise materially adversely affect Purchaser, the Company, the
Subsidiaries or any of their Affiliates). If an adjustment is made with respect
to a taxable period ending on or before the Closing Date in respect of Taxes of
the Company or the Subsidiaries that increases the Tax liability of the
Purchaser Group for any taxable period including or ending after the Closing
Date (a "Post-Closing Tax Detriment") and decreases the Tax liability of the
Seller Group, Seller shall pay to Purchaser the amount of any such Tax decrease
at the time such Post-Closing Tax Detriment is realized by the Purchaser. A
Post-Closing Tax Detriment will be considered to be realized for purposes of
this Section 7.02 at the time that it increases the aggregate Tax liability of
the Purchaser Group, provided, however, a Post-Closing Tax Detriment will be
considered realized only to the extent it increases the aggregate Tax liability
of the Purchaser Group. If an adjustment is made with respect to a taxable
period ending after the Closing Date in respect of Taxes of the Company or the
Subsidiaries that increases the Tax liability of the Seller Group for any
taxable period ending on or before the Closing Date and decreases the tax
liability of the Purchaser Group, Purchaser shall pay to Seller the amount of
any such Tax decrease (a "Pre-Closing Tax Detriment") at the time such
Pre-Closing Tax Detriment is realized by the Seller. A Pre-Closing Tax Detriment
will be considered to be realized for purposes of this Section 7.02 at the time
that it increases the aggregate Tax liability of the Seller Group, provided,
however, a Pre-Closing Tax Detriment will be considered realized only to the
extent it increases the aggregate Tax liability of the Seller Group.

            (b) The Seller has applied to the IRS for a refund of certain FICA
taxes paid with respect to employees of the Company for the years January 1,
1993 through December 31, 1996. The Seller has provided copies of such
application to the Purchaser. The Seller and the Purchaser agree that the Seller
shall pay the full amount of any refund received in respect of employees'
withholdings and payments to the employees of the Company entitled to receive
the same, and that the Seller shall (i) retain all refunds received in respect
of the respective employers' withholdings and payments (but only to the extent
not taken into account in determining the Cash Dividend Amount adjustment under
Section 2.04(c) hereof) and (ii) be liable for any reductions in, or net
deficiencies associated with, such refunds. The refund claim will not be
reflected as an asset on the Closing Balance Sheet.

            (c) The Purchaser and the Company shall make any and all elections
under any state, local and foreign tax provisions comparable to section
172(b)(3) of the Code in any state, locality, or foreign jurisdiction within
which the Company or any of the Subsidiaries file a combined, unitary or similar
return with the Seller or any of its Affiliates (other than the Company or any
of the Subsidiaries) to relinquish the entire carryback period with respect to
any net operating loss attributable to the Company or any of the Subsidiaries in
any taxable period beginning after the Closing Date that could be carried back
to a taxable year of the 
<PAGE>
                                       65


Company or any such Subsidiary ending on or before the Closing Date. Neither the
Seller nor any Affiliate thereof shall be required to pay to the Purchaser, the
Company or any Subsidiary any refund or credit of Taxes that results from the
carryback to any taxable period ending on or before the Closing Date of any net
operating loss, capital loss or tax credit attributable to the Company or any of
its Subsidiaries in any taxable period beginning after the Closing Date, except
that the Company or any of its Subsidiaries that have not filed combined,
unitary or similar returns with the Seller or any of its Affiliates (other than
the Company or any of its Subsidiaries) shall be entitled to carryback losses or
tax credits from any taxable period beginning on or after the Closing Date to
any taxable period of such Company ending on or prior to the Closing Date, but
only if such carryback would not impose a material Tax cost or otherwise
materially adversely affect the Seller or any of its Affiliates.

            SECTION 7.03. Contests. (a) After the Closing Date, each of the
Seller and the Purchaser shall promptly notify the other party in writing upon
receipt of written notice of the commencement of any Tax audit or administrative
or judicial proceeding or of any demand or claim on the Seller, the Purchaser or
the Company or any Subsidiary which, if determined adversely to the taxpayer or
after the lapse of time, would be grounds for indemnification by the other party
under Section 7.01. Such notice shall contain factual information (to the extent
known to the notifying party) describing the asserted Tax liability in
reasonable detail and shall include copies of any notice or other document
received from any taxing authority in respect of any such asserted Tax
liability. If the indemnitee under Section 7.01 fails to give the indemnitor
under Section 7.01 prompt notice of an asserted Tax liability as required by
this Section 7.03, then the indemnitor shall not have any obligation to
indemnify for any loss arising out of such asserted Tax liability but only to
the extent that failure to give such notice results in a detriment to the
indemnitor.

            (b) In the case of an audit or administrative or judicial proceeding
that relates to periods ending on or before the Closing Date, the Seller shall
have the sole right, at its expense, to control the conduct of such audit or
proceeding, but only to the extent that such audit or proceeding relates to a
Tax for which the Seller has a potential indemnification obligation under
Section 7.01; provided, however, that if the results of such contest could
reasonably be expected to have a material Tax cost to Purchaser, the Company, or
the Subsidiaries for any taxable period including or ending after the Closing
Date, then Seller and Purchaser shall jointly control the defense and settlement
of any such contest and each party shall cooperate with the other party at its
own expense and there shall be no settlement or closing or other agreement with
respect thereto without the consent of the other party, which consent shall not
be unreasonably withheld and, if the Seller does not assume the defense of any
such audit or proceeding, the Purchaser may defend the same in such manner as it
may deem appropriate, including, but not limited to, settling such audit or
proceeding; provided, however, that the Purchaser shall not settle any such
audit or proceeding without the consent of the Seller, which consent shall not
be unreasonably withheld. If the Seller chooses to 
<PAGE>
                                       66


control the contest, the Purchaser shall promptly empower and shall cause the
Company or Subsidiary or other party promptly to empower (by power of attorney
and such other documentation as may be appropriate) such representatives of the
Seller as it may designate to represent the Purchaser, Company or Subsidiary or
other party or its successor in the contest insofar as the contest involves an
asserted tax liability for which the Seller would be liable under Section 7.01.
Purchaser shall have sole control over the defense and settlement of any contest
relating to taxable periods or portions thereof that begin on or after the
Closing Date (including, subject to Section 7.03(c) hereof, any Taxes allocated
to such period under Section 7.01(d) hereof) or relating to taxable periods or
portions thereof ending on or before the Closing Date provided the Taxes to
which such contest relates are Taxes for which Seller is not liable under
Section 7.01(a) hereof, provided, however, that if the results of any such
contest otherwise controlled by Purchaser could reasonably be expected to have a
material Tax cost or otherwise materially adversely affect the Seller or the
Seller Group, then the Seller and Purchaser shall jointly control the defense
and settlement of any such contest and each party shall cooperate with the other
party at its own expense and there shall be no settlement or closing or other
agreement with respect thereto without the consent of the other party, which
consent shall not be unreasonably withheld.

            (c) With respect to periods beginning before the Closing Date and
ending after the Closing Date, (i) each party may participate in an audit or
proceeding which relates to any such period and (ii) such audit or proceeding
shall be controlled by that party which would bear the burden of the greater
portion of the sum of the adjustment and any corresponding adjustments that may
reasonably be anticipated for future Tax periods; provided that neither party
shall settle any such audit or proceeding without the consent of the other,
which consent shall not be unreasonably withheld. The principle set forth in the
preceding sentence shall govern also for purposes of deciding any issue that
must be decided jointly (in particular, choice of judicial forum) in situations
in which separate issues are otherwise controlled hereunder by the Purchaser and
the Seller.

            (d) The Purchaser and the Seller agree to cooperate, and the
Purchaser agrees to cause the Company and Subsidiaries to cooperate, in the
defense against or compromise of any claim in any audit or proceeding.

            (e) Seller shall promptly notify Purchaser of the commencement of
any claim, audit, examination or other written change or adjustment received by
Seller, in each case relating to the Company or the Subsidiaries, by any taxing
authority which could reasonably be expected to affect the liability of
Purchaser, the Company or the Subsidiaries for a material amount of Taxes, and
Seller shall keep Purchaser informed of the progress thereof. The failure to
provide such notice shall not affect the indemnification obligations under this
Section unless the indemnified party is materially prejudiced as a result of
such failure.
<PAGE>
                                       67


            (f) Purchaser shall promptly notify Seller of the commencement of
any claim, audit, examination or other written change or adjustment received by
Purchaser, in each case relating to the Company or the Subsidiaries for periods
up to and including the Closing Date, by any taxing authority which could
reasonably be expected to affect the liability of Seller, the Company or the
Subsidiaries (with respect to periods up to and including the Closing Date) for
a material amount of Taxes, and Purchaser shall keep Seller informed of the
progress thereof. The failure to provide such notice shall not affect the
indemnification obligations under this Section unless the indemnified party is
materially prejudiced as a result of such failure.

            SECTION 7.04. Preparation of Tax Returns. (a) The Seller shall
prepare and file any Tax Returns relating to the Company and the Subsidiaries
for any taxable periods that end on or prior to the Closing Date (the "Seller
Returns"). The Seller Returns shall be prepared in a manner consistent with the
prior practice of the Company and the Subsidiaries (except to the extent counsel
for the Seller shall determine that there is no reasonable basis therefor) and,
in case of Seller Returns relating to Income Taxes, the Seller shall deliver the
Seller Returns to the Purchaser at least 15 days before such Seller Return is
due to be filed (taking into account any extensions of time to file such return
that have been properly obtained) for Purchaser's review and comment in
accordance with Section 7.04(b) hereof. In the case of any Tax Return for a
period that includes the Closing Date that does not cover a taxable period that
ends on the Closing Date (the "Purchaser Returns"), Purchaser shall prepare or
cause the Company to prepare such Purchaser Return in a manner consistent with
the prior practice of the Company and the Subsidiaries (except to the extent
counsel for the Purchaser shall determine that there is no reasonable basis
therefor) and the Purchaser shall deliver such Purchaser Return to the Seller at
least 7 days before such return is due to be filed (taking into account any
extensions of time to file such return that have been properly obtained) for
Seller's review and comment in accordance with Section 7.04(b) hereof. Seller
shall reimburse the Purchaser for any Taxes on the Purchaser Return owed by
Seller pursuant to Sections 7.01(a) and 7.01(d) hereof to the extent such amount
exceeds the accrual for such Taxes (other than deferred Taxes that reflect the
differences between book and tax basis in assets and liabilities), if any,
established therefor in the Closing Balance Sheet and only to the extent it is
taken into account in determining the Cash Dividend Amount adjustment under
Section 2.04(c) hereof. The Purchaser shall prepare and file or cause the
Company to prepare and file any Tax return relating to the Company or any of the
Subsidiaries for any taxable periods that begin on or after the Closing Date.

            (b) The Purchaser shall have the right to object to any items set
forth on the Seller Returns and the Seller shall have the right to object to any
items set forth on the Purchaser Returns within 7 days of the delivery of a
particular return but only if there is no reasonable basis for the position
taken with respect to an item or items set forth on such return
<PAGE>
                                       68


or such return is otherwise substantially inaccurate. In the event of such an
objection, the parties along with the Seller's counsel or the Seller's
Accountants and the Purchaser's counsel or the Purchaser's Accountants shall
attempt in good faith to resolve the dispute and any resolution shall be final
and binding on them. If the parties cannot resolve any such dispute within 7
days of such delivery by Purchaser to Seller or Seller to Purchaser as the case
may be, the items remaining in dispute shall be submitted to an independent
accounting firm of international reputation selected by, and mutually acceptable
to, the Seller and the Purchaser or, if they cannot agree, the Seller's
Accountants and Purchaser's Accountants shall select such an independent firm.
The independent accounting firm so selected shall determine the proper amounts
for the items remaining in dispute and the Purchaser and the Seller shall be
bound by the determination by the independent accounting firm absent manifest
error. The independent accounting firm shall make any such determination within
7 days after submission of the remaining disputed items. If a Tax Return is due
before the date a disputed item is resolved hereunder, it shall be filed as
prepared and resolved items shall be reflected on an amended return.

            SECTION 7.05. Cooperation and Exchange of Information. The Seller
and the Purchaser will provide each other with such cooperation and information
as either of them reasonably may request of the other in filing any Tax Return,
amended return or claim for refund, determining a liability for Taxes or a right
to a refund of Taxes or participating in or conducting any audit or other
proceeding in respect of Taxes. Such cooperation and information shall include
providing copies of relevant Tax returns or portions thereof, together with
accompanying schedules and related work papers and documents relating to rulings
or other determinations by taxing authorities. Each party shall make its
employees reasonably available on a mutually convenient basis to provide
explanations of any documents or information provided hereunder. Each party will
retain all returns, schedules and work papers and all material records or other
documents relating to Tax matters of the Company and the Subsidiaries for the
taxable period that includes the Closing Date and for all prior taxable periods
until the later of (i) the expiration of the statute of limitations of the
taxable periods to which such returns and other documents relate, without regard
to extensions except to the extent notified by the other party in writing of
such extensions for the respective Tax periods or (ii) eight years following the
date (without extension) for such returns; provided, however, that a party shall
not dispose of any such materials if at least 90 Business Days before the later
of the end of either of the periods described in clause (i) or (ii) the other
party has notified the disposing party of its desire to review such material in
which case such other party shall be given an opportunity, at its cost and
expense, to remove and retain all or any part of such materials. Any information
obtained under this Section 7.05 shall be kept confidential, except as may be
otherwise necessary in connection with the filing of returns or claims for
refund or in conducting an audit or other proceeding.
<PAGE>
                                       69


            SECTION 7.06. Conveyance Taxes. The Purchaser and the Seller each
shall be liable for and shall pay one-half of all sales, transfer, stamp, stock
transfer, value added, use, real property transfer or gains and similar taxes,
fees, assessments, levies, duties, tariffs, imposts and other charges incurred
as a result of the sale of the Acquired Shares and other transactions
contemplated hereby. The Purchaser and the Seller agree to cooperate in the
execution and delivery of all instruments and certificates necessary to enable
the Seller and/or the Purchaser to comply with any pre-Closing filing
requirements.

            SECTION 7.07. Section 338(h)(10) Election. (a) The Seller and the
Purchaser shall jointly make a deemed asset sale election described under Code
section 338(h)(10) (the "Code section 338(h)(10) Election") and shall make all
corresponding or similar elections under applicable state or local law with
respect to the Company and Revere Ware Corporation in connection with the
qualified stock purchase of the Acquired Shares by the Purchaser hereunder and
deemed purchase of the stock of Revere Ware Corporation (collectively,
"Elections"). The Seller and the Purchaser shall file all such Elections on a
timely basis and comply with all rules and regulations applicable to such
Elections. The Seller and the Purchaser shall cooperate with each other to take
all actions necessary and appropriate (including filing such forms, returns,
elections, schedules and documents on a joint or separate basis as may be
required) to effect and preserve timely Elections in accordance with applicable
Treasury Regulations under Code section 338 and comparable state or local laws.

            (b) For the purpose of making the Code section 338(h)(10) Election,
the Purchaser shall compute and allocate the "modified aggregate deemed sales
price" among the assets of the Company (including items assigned to the Company
at or prior to the Closing under Article V) and of Revere Ware Corporation in
accordance with the provisions of Code section 338 and the Treasury Regulations
thereunder (the "Allocation"), and shall deliver to the Seller the Allocation
within 45 days of the Closing for the Seller's review and comment. The Seller
may dispute amounts set forth on the Allocation within 20 Business Days of
delivery of the Allocation by the Purchaser to the Seller if the Seller
reasonably believes that any such amount or amounts are incorrect. In the event
of such a dispute, the parties along with the counsel to the Seller or the
Seller's Accountants and counsel to the Purchaser or the Purchaser's Accountants
shall attempt in good faith to resolve such dispute and any resolution shall be
final and binding on them. If the parties cannot resolve any such dispute within
20 Business Days of such delivery by the Purchaser to the Seller, the items
remaining in dispute shall be submitted to an independent accounting firm of
international reputation selected by, and mutually acceptable to, the Seller and
the Purchaser or, if they cannot agree, the Seller's Accountants and Purchaser's
Accountants shall select such an independent firm. If the independent accounting
firm so selected determines that the items remaining in dispute are not
materially incorrect, then the Purchaser and the Seller shall be bound by the
Allocation as prepared by the Purchaser. If the independent accounting firm so
selected determines that one or more of the items remaining in dispute are
materially incorrect, then the Seller and the 
<PAGE>
                                       70


Purchaser shall be bound by the allocation of such items as determined by the
independent accounting firm. The independent accounting firm shall make any such
determination within 30 Business Days after submission of the remaining disputed
items. Any subsequent adjustments to the modified aggregate deemed sales price
shall be reflected in the Allocation in a manner consistent with Code section
338 and the Treasury Regulations promulgated thereunder. The Seller shall
calculate gain or loss, if any, resulting from the Elections and the Purchaser
shall calculate tax basis in the Company's and the Subsidiaries' assets in a
manner consistent with the Allocation (as determined pursuant to the preceding
four sentences) and neither party nor the Company nor any Subsidiary shall take
any position inconsistent with the Allocation in any tax return, schedule,
estimate or otherwise; provided, however, that the Seller shall be entitled to
subtract its selling costs from the "modified aggregate deemed sales price" for
purposes of calculating gain or loss and the Purchaser shall be entitled to add
its acquisition costs to the "adjusted grossed-up basis" of the assets of the
Company and the Subsidiaries for purposes of determining the basis of the
Company's and the Subsidiaries' assets. The Purchaser will not make an election
under section 338(g) of the Code with respect to the sale of the stock of the
Company and Revere Ware Corporation hereunder except in connection with the Code
section 338(h)(10) Election that will be made by the Purchaser jointly with the
Seller.

            SECTION 7.08. Miscellaneous. (a) For Tax purposes, the parties agree
to treat all payments made under this Article VII, under any other indemnity
provisions contained in this Agreement, and for any misrepresentations or
breaches of warranties or covenants, as adjustments to the purchase price.

            (b) This Article VII (and not Article IX) shall be the sole
provision for indemnification against breach of representations, warranties,
covenants and agreements regarding Tax matters.

            (c) For purposes of this Article VII, all references to the
Purchaser, the Seller, the Company and the Subsidiaries include successors.

            (d) The covenants and agreements of the parties hereto contained in
this Article VII shall survive the Closing and shall remain in full force and
effect until 60 days after the expiration of the applicable statutes of
limitations (taking into account any extensions or waivers thereof) with respect
to any Taxes that would be indemnifiable by the Seller under Section 7.01(a) of
this Agreement or by the Purchaser under Section 7.01(b) of this Agreement.

            (e) The Company and the Subsidiaries shall be entitled to make and
receive any and all payments required to be made pursuant to any Tax sharing
agreement with the Seller or its Affiliates prior to the Closing, but only to
the extent such payments are taken into account in determining the Cash Dividend
Amount adjustment under Section 2.04(c) hereof. Except to the extent provided
herein, all Tax sharing agreements or similar agreements with respect to or
involving the Company and the Subsidiaries and the Seller shall be terminated as
of the Closing Date and, after the Closing Date, the Seller, its Affiliates, the
Company, and the Subsidiaries shall not be bound thereby or have any liability
thereunder.
<PAGE>
                                       71


                                 ARTICLE VIII

                             CONDITIONS TO CLOSING

            SECTION 8.01. Conditions to Obligations of the Seller and the
Company. The obligations of the Seller and the Company to consummate the
transactions contemplated by this Agreement shall be subject to the fulfillment
or waiver, at or prior to the Closing, of each of the following conditions:

            (a) Representations and Warranties; Covenants. (i) The
      representations and warranties of the Purchaser contained in this
      Agreement shall be true and correct as of the Closing, with the same force
      and effect as if made as of the Closing (or, in the case of
      representations and warranties of the Purchaser which address matters only
      as of a particular date, as of such date), except where the failures to be
      so true and correct (without giving effect to any limitation or
      qualification as to "materiality" (including the word "material") or
      "material adverse effect" set forth therein) would not, individually or in
      the aggregate, have a material adverse effect on the ability of the
      Purchaser to consummate the transactions contemplated by this Agreement;
      (ii) the covenants and agreements contained in this Agreement to be
      complied with by the Purchaser at or prior to the Closing shall have been
      complied with in all material respects; and (iii) the Seller shall have
      received a certificate of the Purchaser as to the matters set forth in
      clauses (i) and (ii) above signed by a duly authorized officer of the
      Purchaser;

            (b) HSR Act; Canada Competition Act. Any waiting period (and any
      extension thereof) under the HSR Act and the Canada Competition Act
      applicable to the purchase of the Shares contemplated hereby shall have
      expired or shall have been terminated;

            (c) No Order. No Governmental Authority shall have enacted, issued,
      promulgated, enforced or entered any statute, rule, regulation, injunction
      or other Governmental Order which is in effect and has the effect of
      making the transactions contemplated by this Agreement illegal or
      otherwise restraining or prohibiting consummation of such transactions,
      and no Governmental Authority shall have initiated any action that seeks
      to impose criminal sanctions on the Seller or any of its Affiliates or
      that has a reasonable likelihood of success on the merits and would impose
      a material liability on the Seller, in each case, that is intended to have
      the foregoing effect; and

            (d) Stockholders Agreement. The Purchaser shall have executed and
      delivered to the Seller the Stockholders Agreement.
<PAGE>
                                       72


            SECTION 8.02. Conditions to Obligations of the Purchaser. The
obligations of the Purchaser to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment or waiver, at or prior to the
Closing, of each of the following conditions:

            (a) Representations and Warranties; Covenants. (i) The
      representations and warranties of the Seller contained in this Agreement
      shall be true and correct as of the Closing, with the same force and
      effect as if made as of the Closing (or, in the case of representations
      and warranties of the Seller which address matters only as of a particular
      date, as of such date), except where the failures to be so true and
      correct (without giving effect to any limitation or qualification as to
      "materiality" (including the word "material") or "Material Adverse Effect"
      set forth therein) would not, individually or in the aggregate, have a
      Material Adverse Effect; (ii) the covenants and agreements contained in
      this Agreement to be complied with by the Seller at or prior to the
      Closing shall have been complied with in all material respects; and (iii)
      the Purchaser shall have received a certificate of the Seller as to the
      matters set forth in clauses (i) and (ii) above signed by a duly
      authorized officer of the Seller;

            (b) HSR Act; Canada Competition Act. Any waiting period (and any
      extension thereof) under the HSR Act and the Canada Competition Act
      applicable to the purchase of the Shares contemplated hereby shall have
      expired or shall have been terminated;

            (c) No Order. No Governmental Authority shall have enacted, issued,
      promulgated, enforced or entered any statute, rule, regulation, injunction
      or other Governmental Order which is in effect and has the effect of
      making the transactions contemplated by this Agreement illegal or
      otherwise restraining or prohibiting consummation of such transactions,
      and no Governmental Authority shall have initiated any action that seeks
      to impose any criminal sanctions on the Purchaser or any of its Affiliates
      or the Company or any Subsidiary or that has a reasonable likelihood of
      success on the merits and would impose material liability on any such
      Person, in each case, that is intended to have the foregoing effect;

            (d) Certain Company Indebtedness. Prior to the Closing, the Company
      shall have retired and paid in full (or otherwise canceled without any
      adverse tax consequences to the Company) all its Indebtedness (including
      the liabilities described in Section 3.09(e)(iii)), other than the
      Indebtedness under the Facility Financing Interests.

            (e) Ancillary Agreements. The Seller shall have duly executed and
      delivered to the Purchaser, to the extent requested by the Purchaser, the
      Administrative Services Agreement, the CORNING WARE and PYROCERAM License
      Agreement, the PYREX License Agreement, the Patent and Know-How License
      Agreement, the 
<PAGE>
                                       73


      Temporary CORNING License Agreement, the Greenville Supply Agreement, the
      Technology Support Agreement, the Shared Facility Agreement and the
      Transition Services Agreement;

            (f) Stockholders Agreement. The Seller shall have executed and
      delivered to the Purchaser the Stockholders Agreement;

            (g) Resignation of Directors. All directors of the Company and any
      Subsidiary whose resignations shall have been requested by the Purchaser
      not fewer than five Business Days prior to the Closing Date shall have
      submitted their resignations or been removed from office effective as of
      the Closing Date; and

            (h) Termination of Certain Transactions. The Purchaser shall have
      received legally binding documentation evidencing the termination without
      liability (except as described in Section 5.16) to the Purchaser, the
      Company or any Subsidiary of any transactions with the Seller or any of
      its Affiliates (other than agreements entered into pursuant to the
      provisions hereof).

            (i) Certain Arrangements Regarding Management. Peter Campanella, the
      President and Chief Executive Officer of the Company, shall have entered
      into an agreement with the Company on substantially the terms set forth in
      the attachment to the letter dated February 28, 1998, signed by Mr.
      Campanella, relating to the management equity plan for members of senior
      management of the Company; provided that the provisions of this Section
      8.02(i) shall not be available to the Purchaser if it has changed, or
      stated its intention to change, in a manner adverse to Mr. Campanella or
      any other members of management of the Company who are asked by the
      Purchaser to enter into such agreement, the terms of such plan from those
      attached to such letter.

            (j) Section 1445 Withholding. The Seller shall have delivered to the
      Purchaser a certificate complying with Treasury Regulations section
      1.1445-2(b)(2), in form and substance reasonably satisfactory to the
      Purchaser, duly executed and acknowledged, certifying that the Seller is
      not a foreign person within the meaning of such section.

                                  ARTICLE IX

                                INDEMNIFICATION

            SECTION 9.01. Survival of Representations and Warranties. Subject to
the limitations and other provisions of this Agreement, the representations and
warranties of the parties hereto contained in this Agreement shall survive the
Closing and shall remain in full force and effect for a period of eighteen
months after the Closing Date; provided, however, 
<PAGE>
                                       74


that the representations and warranties contained in Section 3.03 and 3.16 shall
survive until 60 days after the expiration of the statute of limitations related
thereto.

            SECTION 9.02. Indemnification for the Benefit of the Seller. (a) The
Purchaser agrees to indemnify or to cause the Company, from and after the
Closing Date, to indemnify the Seller and its Affiliates, officers, directors,
employees, agents, successors and assigns (as used in this Article IX, each a
"Seller Indemnified Party") against and hold them harmless from all Liabilities,
losses, damages, claims, costs, and expenses (including reasonable attorney's
fees) (collectively, "Losses") actually incurred by them arising out of (i) the
breach of any representation or warranty of the Purchaser contained herein, it
being understood that for all purposes of this Section 9.02, such
representations and warranties shall be interpreted without giving effect to any
limitations or qualifications as to "materiality" (including the word
"material") set forth therein, (ii) the breach of any covenant or agreement of
the Purchaser contained herein (other than in Article VII, it being understood
that the sole remedy for breach thereof shall be pursuant to Article VII), (iii)
the Facility Financing Interests, the 1988 Guaranty and the 1992 Guaranty and
(iv) the conduct of the Business by the Company or the Subsidiaries following
the Closing. Anything in Section 9.01 to the contrary notwithstanding, no claim
may be asserted nor may any action be commenced against the Purchaser for breach
of any representation or warranty contained herein, unless written notice of
such claim or action is received by the Purchaser describing in reasonable
detail the facts and circumstances with respect to the subject matter of such
claim or action on or prior to the date on which the representation or warranty
on which such claim or action is based ceases to survive as set forth in Section
9.01, irrespective of whether the subject matter of such claim or action shall
have occurred before or after such date.

            (b) No claim may be made against the Purchaser or the Company for
indemnification pursuant to Section 9.02(a)(i) unless the aggregate of all
Losses of the Seller Indemnified Parties with respect to this Section 9.02 shall
exceed an amount equal to $4,000,000, and the Purchaser shall then only be
liable for Losses in excess of such $4,000,000 amount. No Seller Indemnified
Party shall be indemnified pursuant to Section 9.01(a)(i) with respect to any
individual item of Loss if the aggregate of all payments made for Losses of the
Seller Indemnified Parties for which the Seller Indemnified Parties have
received indemnification pursuant to this Section 9.02(a)(i) shall have exceeded
an amount equal to 40% of the sum of the Share Purchase Price and the Cash
Dividend Amount. For the purposes of this Section 9.02(b), in computing such
individual or aggregate amounts of claims, the Person seeking indemnification
shall deduct from such amounts (i) any insurance recoveries actually received by
such Person offsetting the amount of such Loss (net of cost of recovery), (ii)
any recoveries actually received by such Person from third parties pursuant to
indemnification or otherwise with respect thereto (net of cost of recovery),
(iii) any Tax benefit to such Person attributable to amounts indemnified against
and (iv) any adjustments to the Cash Dividend Amount pursuant to Section 2.04
with respect to the subject matter in dispute. A Tax benefit will be considered
to be recognized by a Seller Indemnified Party that is a member of the Seller
Group for purposes of this Section 9.02 at the time it reduces the 
<PAGE>
                                       75


aggregate Tax liability of the Seller Group. Any indemnification payment under
this Section 9.02 shall be increased by the amount of any liability for Taxes
arising thereunder if such payment is finally determined by a taxing authority
or a court to be taxable income to the party receiving such payment.

            (c) Without duplication of the amounts referred to in the last
sentence of the preceding paragraph, payments by the Purchaser or the Company
pursuant to Section 9.02(a) shall be limited to the amount of any Loss that
remains after deducting therefrom (i) any insurance recoveries actually received
by the Person seeking indemnification offsetting the amount of such Loss (net of
cost of recovery), (ii) any recoveries actually received by such Person from
third parties pursuant to indemnification or otherwise with respect thereto (net
of cost of recovery), (iii) any Tax benefit to such Person attributable to
amounts indemnified against and (iv) any adjustments to the Cash Dividend Amount
pursuant to Section 2.04 with respect to the subject matter in dispute.

            (d) Subject to Section 11.12, the Seller hereby acknowledges and
agrees that its sole and exclusive remedy with respect to any and all claims
relating to the subject matter of this Agreement (other than for fraud or
intentional breach) shall be pursuant to the indemnification provisions set
forth in this Article IX and Article VII (with respect to the subject matter
thereof). In furtherance of the foregoing, the Seller hereby waives, to the
fullest extent permitted under applicable law, any and all rights, claims and
causes of action (other than for fraud or intentional breach) it may have
against the Purchaser arising under or based upon any federal, state, local or
foreign statute, law, ordinance, rule or regulation (including, without
limitation, any such rights, claims or causes of action arising under or based
upon common law or otherwise).

            (e) Except as expressly set forth in this Agreement, the Purchaser
is not making any representation, warranty, covenant or agreement with respect
to the matters contained herein. Anything herein to the contrary
notwithstanding, no breach of any representation, warranty, covenant or
agreement contained herein (other than for fraud or intentional breach) shall
give rise to any right on the part of the Seller, after the consummation of the
transactions contemplated by Article II, to rescind this Agreement or any of the
transactions contemplated hereby.

            SECTION 9.03. Indemnification by the Seller. (a) The Seller agrees
to indemnify the Purchaser and its Affiliates, and their officers, directors,
employees, members, agents, successors and assigns (as used in this Article IX,
each a "Purchaser Indemnified Party") against and hold them harmless from all
Losses actually incurred by them arising out of (i) the breach of any
representation or warranty of the Seller contained herein (other than Section
3.16, it being understood that the sole remedy for breach thereof shall be
pursuant to Article VII or Section 3.17, it being understood that the sole
remedy for breach thereof shall be pursuant to Section 9.05), it being
understood that for all purposes of this Section 9.03, such representations and
warranties shall be interpreted without giving effect to any
<PAGE>
                                       76


limitations or qualifications as to "materiality" (including the word
"material") or "Material Adverse Effect" set forth therein, (ii) the breach of
any covenant or agreement of the Seller contained herein (other than Article
VII, it being understood that the sole remedy for breach thereof shall be
pursuant to Article VII), (iii) any Liabilities assumed by the Seller under
Section 5.14, and (iv) all Liabilities relating to former businesses of the
Company and the Subsidiaries that were transferred from the Company or the
Subsidiaries prior to the Closing, including, without limitation, the businesses
sold to Newell Co. and the transferred businesses of Corning Brasil. Anything in
Section 9.01 to the contrary notwithstanding, no claim may be asserted nor may
any action be commenced against the Seller for breach of any representation or
warranty contained herein, unless written notice of such claim or action is
received by the Seller describing in reasonable detail the facts and
circumstances with respect to the subject matter of such claim or action on or
prior to the date on which the representation or warranty on which such claim or
action is based ceases to survive as set forth in Section 9.01, irrespective of
whether the subject matter of such claim or action shall have occurred before or
after such date.

            (b) No claim may be made against the Seller for indemnification
pursuant to Section 9.03(a)(i) unless the aggregate of all Losses of the
Purchaser Indemnified Parties with respect to this Section 9.03 shall exceed an
amount equal to $4,000,000, and the Seller shall then only be liable for Losses
in excess of such $4,000,000 amount. No Purchaser Indemnified Party shall be
indemnified pursuant to Section 9.03(a)(i) with respect to any individual item
of Loss if the aggregate of all payments made for Losses of the Purchaser
Indemnified Parties for which the Purchaser Indemnified Parties have received
indemnification pursuant to this Section 9.03(a)(i) shall have exceeded an
amount equal to 40% of the sum of the Share Purchase Price and the Cash Dividend
Amount. For the purposes of this Section 9.03(b), in computing such aggregate
amounts of claims, the Person seeking indemnification shall deduct from such
amounts (i) any insurance recoveries actually received by such Person offsetting
the amount of such Loss (net of cost of recovery), (ii) any recoveries actually
received by such Person from third parties pursuant to indemnification or
otherwise with respect thereto (net of cost of recovery), (iii) any Tax benefit
to such Person attributable to amounts indemnified against and (iv) any
adjustments to the Cash Dividend Amount pursuant to Section 2.04 with respect to
the subject matter in dispute. A Tax benefit will be considered to be recognized
by a Purchaser Indemnified Party that is a member of the Purchaser Group for
purposes of this Section 9.03 at the time it reduces the aggregate Tax liability
of the Purchaser Group. Any indemnification payment under this Section shall be
increased by the amount of any liability for Taxes arising thereunder if such
payment is finally determined by a taxing authority or a court to be taxable
income to the party receiving such payment.

            (c) Without duplication of the amounts referred to in the last
sentence of the preceding paragraph, payments by the Seller pursuant to Section
9.03(a) shall be limited to the amount of any Loss that remains after deducting
therefrom (i) any insurance recoveries actually received by the Person seeking
indemnification offsetting the amount of such Loss 
<PAGE>
                                       77


(net of cost of recovery), (ii) any recoveries actually received by such Person
or any of its Affiliates from third parties pursuant to indemnification or
otherwise with respect thereto (net of cost of recovery), (iii) any Tax benefit
to such Person attributable to amounts indemnified against and (iv) any
adjustments to the Cash Dividend Amount pursuant to Section 2.04 with respect to
the subject matter in dispute.

            (d) Subject to Section 11.12, the Purchaser hereby acknowledges and
agrees that its sole and exclusive remedy with respect to any and all claims
relating to the subject matter of this Agreement (other than for fraud or
intentional breach) shall be pursuant to the indemnification provisions set
forth in this Article IX, Article VI (with respect to the subject matter
thereof) and Article VII (with respect to the subject matter thereof). In
furtherance of the foregoing, the Purchaser hereby waives, to the fullest extent
permitted under applicable law, any and all rights, claims and causes of action
(other than for fraud or intentional breach) it may have against the Seller
arising under or based upon any federal, state, local or foreign statute, law,
ordinance, rule or regulation (including, without limitation, any such rights,
claims or causes of action arising under or based upon common law or otherwise).

            (e) Except as expressly set forth in this Agreement, the Seller is
not making any representation, warranty, covenant or agreement with respect to
the matters contained herein. Anything herein to the contrary notwithstanding,
no breach of any representation, warranty, covenant or agreement contained
herein (other than for fraud or intentional breach) shall give rise to any right
on the part of the Purchaser, after the consummation of the transactions
contemplated by Article II, to rescind this Agreement or any of the transactions
contemplated hereby.

            SECTION 9.04. Indemnification Procedures. (a) A Purchaser
Indemnified Party or a Seller Indemnified Party, as the case may be (for
purposes of this Section 9.04, an "Indemnified Party"), shall give the
indemnifying party under Section 9.02 or 9.03, as applicable (for purposes of
this Section 9.04, an "Indemnifying Party"), prompt written notice of any claim,
assertion, event or proceeding by or in respect of a third party of which such
Indemnified Party has knowledge concerning any Loss as to which such Indemnified
Party may request indemnification hereunder or any Loss as to which the
$4,000,000 amount referred to in Section 9.02(b) or 9.03(b) may be applied. The
Indemnifying Party shall have the right to direct, through counsel of its own
choosing, which counsel shall be reasonably satisfactory to the Indemnified
Party, the defense or settlement of any claim or proceeding the subject of
indemnification hereunder at its own expense. If the Indemnifying Party elects
to assume the defense of any such claim or proceeding, the Indemnified Party may
participate in such defense, but in such case the expenses of the Indemnified
Party shall be paid by the Indemnified Party. The Indemnified Party shall
provide the Indemnifying Party with access to its records and personnel relating
to any such claim, assertion, event or proceeding during normal business hours
and shall otherwise cooperate with the Indemnifying Party in the defense or
settlement thereof, and the Indemnifying Party shall reimburse the Indemnified
<PAGE>
                                       78


Party for all its reasonable out-of-pocket expenses in connection therewith. If
the Indemnifying Party elects to direct the defense of any such claim or
proceeding, the Indemnified Party shall not pay, or permit to be paid, any part
of any claim or demand arising from such asserted liability unless the
Indemnifying Party consents in writing to such payment or unless the
Indemnifying Party withdraws from the defense of such asserted liability or
unless a final judgment from which no appeal may be taken by or on behalf of the
Indemnifying Party is entered against the Indemnified Party for such liability.
No settlement in respect of any third party claim may be effected by the
Indemnifying Party without the Indemnified Party's prior written consent unless
the settlement involves a full and unconditional release of the Indemnified
Party. If the Indemnifying Party shall fail to undertake any such defense, the
Indemnified Party shall have the right to undertake the defense or settlement
thereof, at the Indemnifying Party's expense. If the Indemnified Party assumes
the defense of any such claim or proceeding pursuant to this Section 9.04 and
proposes to settle such claim or proceeding prior to a final judgment thereon or
to forgo any appeal with respect thereto, then the Indemnified Party shall give
the Indemnifying Party prompt written notice thereof and the Indemnifying Party
shall have the right to participate in the settlement or assume or reassume the
defense of such claim or proceeding in the event the Indemnifying Party agrees
to assume liability for any Losses arising from such claim or proceeding.

            SECTION 9.05. Environmental Indemnification. (a) Subject to all
other terms and conditions of this Section 9.05, the Seller shall indemnify
Purchaser Indemnified Parties against and hold them harmless from all Losses
actually incurred by them arising from (i) the release of any Hazardous Material
into the environment from or at the Real Property or any other property
currently or formerly owned or operated by the Company or any Subsidiary in
connection with the Business, (ii) the transportation or disposal of any
Hazardous Material from the Real Property, or any other property currently or
formerly owned or operated by the Company or any Subsidiary in connection with
the Business, to any offsite location, (iii) any violation of or liability under
any Environmental Law related to the Business or any Hazardous Material, in each
case occurring prior to the Closing Date, and (iv) the breach of any
representation or warranty of the Seller contained in Section 3.17 (it being
understood that for purposes of Section 9.05(a)(iv), in establishing whether
such representations and warranties have been breached, the accuracy of such
representations and warranties shall be determined by giving effect to the
limitations or qualifications as to "materiality" (including the word
"material") or "Material Adverse Effect" contained therein) (hereafter
collectively referred to as "Indemnifiable Environmental Matters") in accordance
with the following formula:

                  (A) The Seller shall pay for eighty percent (80%) and the
            Company shall pay for twenty percent (20%) of all such Losses up to
            an aggregate of twenty million dollars ($20,000,000); and
<PAGE>
                                       79


                  (B) The Seller shall pay for one hundred percent (100%) of all
            such Losses in excess of twenty million dollars ($20,000,000).

            (b) The Purchaser agrees as follows in connection with the agreement
by the Seller set forth in Section 9.05(a); provided, however, that the Seller's
obligations pursuant to Section 9.05(a) shall not be affected by the failure of
the Purchaser to comply with any of the following except to the extent the
Seller is prejudiced thereby:

                  (i) In the case of any Indemnifiable Environmental Matter that
            requires remedial work of any kind to be performed at the Real
            Property, the Purchaser Indemnified Party requesting indemnification
            pursuant to this Section 9.05 shall give the Seller (A) prompt,
            written notice of such Indemnifiable Environmental Matter; and (B)
            all reasonable opportunity and access to the Company's or any
            Subsidiary's records, personnel and the Real Property necessary for
            the Seller to plan and implement such remedial work. The Seller
            shall have the right to plan and implement such remedial work, and
            the failure to afford the Seller such right shall be presumed to
            prejudice the Seller for purposes of this Section 9.05(b); provided,
            however, that if the Seller does not undertake such remedial work
            within a reasonable period after such Purchaser Indemnified Party
            provides the Seller with notice as set forth in clause (A) above and
            reasonable opportunity and access as set forth in clause (B) above,
            such Purchaser Indemnified Party may undertake suc