FIRST BRANDS CORP, DEF 14A, 1998-09-22

FIRST BRANDS CORP
DEF 14A, 1998-09-22
UNSUPPORTED PLASTICS FILM & SHEET

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Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12

FIRST BRANDS CORPORATION
.................................................................
(Name of Registrant as Specified In Its Charter)

.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11

(1) Title of each class of securities to which transaction
applies:

............................................................

(2) Aggregate number of securities to which transaction
applies:

.......................................................

(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):

.......................................................

(4) Proposed maximum aggregate value of transaction:

.......................................................

(5) Total fee paid:

.......................................................

[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

.......................................................

(2) Form, Schedule or Registration Statement No.:

.......................................................

(3) Filing Party:

.......................................................

(4) Date Filed:

.......................................................

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[Logo]

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF
FIRST BRANDS CORPORATION

September 22, 1998

To the Stockholders of
FIRST BRANDS CORPORATION:

The Annual Meeting of Stockholders of First Brands Corporation will be held
at the Danbury Hilton Hotel, 18 Old Ridgebury Road, Danbury, Connecticut on
Friday, October 23, 1998, commencing at 9:00 a.m., at which meeting only holders
of the common stock of record at the close of business on September 1, 1998, and
those holding proxies from such stockholders will be entitled to vote, for the
following purposes:

1. To elect three directors; and

2. To ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for the Company's 1999 fiscal year; and

3. To transact such other business, if any, as may properly come
before the meeting.

We hope that you will be able to attend our annual meeting in person. If
you plan to do so, please return the enclosed ticket request and we will
promptly send your ticket to you. Please bring your ticket with you to the
meeting.

FIRST BRANDS CORPORATION
/s/ Joseph B. Furey
----------------
Joseph B. Furey
Vice President, Secretary and
Controller

EVEN THOUGH YOU MAY PLAN TO ATTEND THE MEETING IN PERSON, PLEASE MARK, DATE
AND EXECUTE THE ENCLOSED PROXY AND MAIL IT PROMPTLY. SHOULD YOU ATTEND THE
MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON IF YOU DESIRE. A RETURN
ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES IS ENCLOSED
FOR YOUR CONVENIENCE.

<PAGE>

FIRST BRANDS CORPORATION

83 WOOSTER HEIGHTS ROAD

DANBURY, CONNECTICUT 06813-1911

--------------------------
PROXY STATEMENT
--------------------------

FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD OCTOBER 23, 1998

This proxy statement is furnished to the stockholders of First Brands
Corporation ('First Brands' or the 'Company') in connection with the
solicitation of proxies for use at the Annual Meeting of Stockholders to be held
October 23, 1998, and at all adjournments thereof, for the purposes set forth in
the accompanying Notice of Annual Meeting of Stockholders. This proxy statement
and the enclosed form of proxy are first being mailed on or about September 22,
1998 to stockholders of record on September 1, 1998.

Whether or not you expect to be personally present at the meeting, you are
requested to fill in, sign, date and return the enclosed form of proxy. Any
person giving a proxy has the right to revoke it at any time before it is voted
by giving notice to the Secretary of the Company. All shares represented by a
duly executed proxy in the accompanying form will be voted unless such proxy is
revoked prior to the voting thereof.

The close of business on September 1, 1998, has been fixed as the record
date for the determination of stockholders entitled to vote at the Annual
Meeting of Stockholders. As of the record date, there were outstanding and
entitled to be voted at such meeting 39,045,100 shares of First Brands Common
Stock ('common stock'). The holders of the common stock will be entitled to one
vote on each matter submitted to stockholders for each share of common stock
held of record on the record date.

The Company's Annual Report for the fiscal year ended June 30, 1998
accompanies this Proxy Statement. The solicitation of this proxy is made by the
Board of Directors of the Company. The solicitation will be by mail and the
expense thereof will be paid by the Company. The Company has retained Morrow &
Co. Inc. to assist in the solicitation of proxies at an estimated cost of
$10,000. In addition, solicitation of proxies may be made by telephone or
telegram by directors, officers or regular employees of the Company who will
receive no extra compensation for such solicitation.

A majority of the outstanding shares entitled to vote must be present in
person or represented by proxy at the Annual Meeting of Stockholders to
constitute a quorum. The shares represented by a proxy which is timely returned
and marked 'Abstain' as to any matter as well as broker non-votes will be
considered present at the Annual Meeting of Stockholders and will be included in
the calculation of those shares needed to constitute a quorum. The shares
represented by such proxies, although considered present for quorum purposes,
will not be considered present and entitled to vote with respect to any proposal
which is abstained from or to which the broker non-vote relates.

Directors of the Company are elected by a plurality of the votes cast at
the Annual Meeting of Stockholders if a quorum is present at such meeting. The
ratification of the appointment of independent auditors requires the approval of
a majority of the votes cast at the Annual Meeting of Stockholders, assuming
that a quorum is present.

I. ELECTION OF DIRECTORS

The Board of Directors is divided into three classes of membership, with
terms expiring on different Annual Meeting dates. Three or four of the members
of the Board of Directors are elected each year to serve as directors for a term
of three years. Directors are elected for the terms specified and continue in
office until their respective successors have been elected and have qualified.

The Board of Directors at its meeting held June 5, 1998, selected the
following three nominees for election at the Annual Meeting of Stockholders each
for three-year terms expiring on the date of the Annual Meeting of Stockholders
in the year 2001 and until their successors are elected and qualified: Mr.
Robert F. Bernstock, Mr. Denis Newman, and Mr. Ervin R. Shames. Certain
information with respect to the nominees for election as director and with
respect to directors whose terms extend beyond the date of the Annual Meeting of
Stockholders is set forth below.

<PAGE>

The Board of Directors recommends a vote FOR these nominees.

Should any one or more of the nominees be unable or unwilling to serve
(which is not expected) the proxies (except proxies marked to the contrary) may
be voted for such other person or persons as the Board of Directors of the
Company may recommend.

NOMINEES FOR ELECTION FOR TERM ENDING 2001

[Photo] ROBERT F. BERNSTOCK, Age 47 Director since 1997
PRESIDENT AND CEO
VLASIC FOODS INTERNATIONAL, INC. (FOOD MANUFACTURER AND MARKETER)
DIRECTOR, VLASIC FOODS INTERNATIONAL, INC., GROCERY MANUFACTURERS
ASSOCIATION, THE NATIONAL FOOD PROCESSORS ASSOCIATION, THE ROWAN SCHOOL OF
BUSINESS ADMINISTRATION AND THE PHILADELPHIA TENNIS PATRONS.
Committees: Audit and Pension
Mr. Bernstock has been President and Chief Executive Officer of Vlasic Foods
International, Inc. (food marketer) since March, 1998. He was Executive Vice
President of the Campbell Soup Company since July, 1997 and was President of
its Specialty Food Division which was spun off in March, 1998 as Vlasic Foods
International, Inc. Prior to that, he was President -- U.S. Grocery Division
and Senior Vice President of Campbell Soup Company since March, 1996. Mr.
Bernstock served as President -- International Grocery Division from August
1994 to February 1996, and as President -- International Soup Division from
June, 1993 to July, 1994.

[Photo] DENIS NEWMAN, Age 68 Director since 1986
MANAGING DIRECTOR
MIDMARK ASSOCIATES, INC. (FINANCIAL SERVICES)
DIRECTOR, CLEARVIEW CINEMA GROUP, INC.
Committees: *Audit and Executive
Mr. Newman has been Managing Director of MidMark Associates (financial
services) since December 1989.

[Photo] ERVIN R. SHAMES, Age 58 Director since 1987
CHAIRMAN
SELECT COMFORT CORPORATION (MATTRESS MANUFACTURER AND RETAILER)
VISITING LECTURER, UNIVERSITY OF VIRGINIA, DARDEN GRADUATE SCHOOL OF BUSINESS
Committees: *Compensation and Nominating
Mr. Shames has been Chairman of Select Comfort Corporation (mattress
manufacturer and retailer) since April, 1996 and was appointed Visiting
Lecturer at the University of Virginia's Darden Graduate School of Business
in September, 1996. He was a private investor and consultant from January,
1995 to April, 1996, and was President and Chief Executive Officer of Borden,
Inc. (consumer products) from December, 1993 to January, 1995. He was
President and Chief Operating Officer of Borden, Inc. from July, 1993 to
December, 1993.

2
</TABLE>

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<TABLE>

DIRECTORS CONTINUING IN OFFICE UNTIL 2000

<S> <C>

[Photo] JOHN C. FERRIES, Age 60 Director since 1997
CONSULTANT
THE MACMANUS GROUP
Committees: Audit and Pension
Mr. Ferries has been a consultant for The MacManus Group (a communications
group consisting of nine companies) running their Mergers and Acquisitions
program since January, 1998. In December, 1997, Mr. Ferries retired from
DMB&B, a MacManus Advertising company, where he served as
President -- Americas, since September, 1993. Mr. Ferries was President of
the DMB&B Asia-Pacific, Latin America, and Africa regions from 1991-1993.

[Photo] JAMES R. MAHER, Age 48 Director since 1988
PRESIDENT
MAFCO HOLDINGS, INC. (HOLDING COMPANY)
Committees: Audit and Pension
Mr. Maher has been President of Mafco Holdings Inc., a diversified holding
company, since July, 1998. Mr. Maher had been President and Chief Executive
Officer of Mafco Consolidated Group, Inc., (diversified manufacturer) now a
wholly owned subsidiary of Mafco Holdings since July, 1995. Mr. Maher was
Chairman of the Board from April, 1995 to April, 1996 and was President and
Chief Executive Officer from December, 1992 to April, 1995 of Laboratory
Corporation of America (health services).

[Photo] WILLIAM V. STEPHENSON, Age 57 Director since 1992
CHAIRMAN AND CEO
FIRST BRANDS CORPORATION
Committees: Executive and Nominating
Mr. Stephenson became Chairman of the Board on January 1, 1997. Prior to
that, he had been President and Chief Executive Officer of the Company since
September 1, 1994. He was President and Chief Operating Officer from August,
1992 to September, 1994. He relinquished the title of President effective
August 7, 1998.

[Photo] ROBERT G. TOBIN, Age 60 Director since 1991
PRESIDENT AND CEO
AHOLD, INC. (A SUBSIDIARY OF ROYAL AHOLD, NV)
Committees: *Pension and Compensation
Mr. Tobin retired as Chairman of The Stop & Shop Supermarket Companies, Inc.
and The Stop & Shop Supermarket Company (retail food) on July 31, 1998 when
he became President and CEO of Ahold, Inc. Mr. Tobin served as Chairman,
President and Chief Executive Officer from January, 1995 through December,
1997, relinquishing the title of President and CEO in December, 1997. He was
President and Chief Executive Officer of The Stop & Shop Supermarket Company
from May, 1994 to January, 1995, and prior to this was President and Chief
Operating Officer of The Stop & Shop Supermarket Companies, Inc. since 1993.

</TABLE>

<PAGE>

DIRECTORS CONTINUING IN OFFICE UNTIL 1999
<TABLE>
<S> <C>

[Photo] ALFRED E. DUDLEY, Age 70 Director since 1986
Committees: *Executive and Nominating
Mr. Dudley was Chairman of the Company from 1986 to January 1, 1997; and
Chairman and CEO from 1986 to September 1, 1994.

[Photo] JAMES R. MCMANUS, Age 64 Director since 1986
CHAIRMAN, CEO AND FOUNDER
MARKETING CORPORATION OF AMERICA
(MARKETING CONSULTING AND MARKETING SERVICES)
DIRECTOR, AU BON PAIN CO. INC.
Committees: Compensation and Nominating
Mr. McManus has been Chairman and CEO of Marketing Corporation of America
(marketing services) since 1971. On February 1, 1994, Mr. McManus resigned as
President and Chief Executive Officer of Business Express, Inc., a regional
airline operating in the Northeastern United States. On January 22, 1996, a
petition for Chapter IX Bankruptcy Protection was filed against Business
Express, Inc. in Federal Court in Manchester, New Hampshire by Saab Aircraft
of America and two of its operating subsidiaries.

[Photo] THOMAS H. ROWLAND, Age 53 Director since 1996
PRESIDENT AND CHIEF OPERATING OFFICER
FIRST BRANDS CORPORATION
Committees: Executive
Mr. Rowland was elected President and Chief Operating Officer of the Company
effective August 7, 1998. He was Executive Vice President of the Company and
President of the Home Products Division since August, 1992. He is also
President of Himolene, Inc., a wholly-owned subsidiary of the Company.

</TABLE>

- ------------
* Denotes Committee Chairman

<PAGE>

BENEFICIAL OWNERSHIP OF VOTING SECURITIES

The following table sets forth certain information concerning the
beneficial ownership of common stock by each stockholder who is known by the
Company to own beneficially in excess of 5% of the outstanding common stock.

<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
------------------------------------ -------------------- ----------------
<S> <C> <C>
Harris Associates LP
2 North LaSalle Street
Chicago, IL 60602............................................ 6,361,932(a) 16.29%
Ariel Capital Management,
307 North Michigan Avenue,
Chicago, IL 60601............................................ 4,908,940(b) 11.34%
Fidelity Management & Research Co.
82 Devonshire
Boston, MA 02109............................................. 3,950,025(c) 10.12%
GSB Investment Management
301 Commerce Street
Fort Worth, TX 76102......................................... 3,716,581(d) 9.52%

</TABLE>

- ------------
(a) Information concerning beneficial ownership by Harris Associates LP is
based on a report on Form 13F filed with the Securities and Exchange
Commission (the 'SEC') as of June 30, 1998. To the Company's knowledge,
Harris & Associates LP has not filed a Schedule 13D or Schedule 13G with
respect to their ownership of the Company's common stock.

(b) Information concerning beneficial ownership by Ariel Capital Management is
based upon their letter dated September 10, 1998 confirming ownership as of
August 31, 1998. To the Company's knowledge, Ariel Capital Management has
not filed a Schedule 13D or 13G with respect to their ownership of the
Company's common stock.

(c) Information concerning beneficial ownership by Fidelity Management &
Research (FMR) is based on a report on Form 13F filed with the SEC as of
April 30, 1998. To the Company's knowledge, Fidelity Management & Research
Corporation has not filed a Schedule 13D or 13G with respect to their
ownership of the Company's stock.

(d) Information concerning beneficial ownership by GSB Investment Management is
based on a report on Form 13F filed with the SEC as of June 30, 1998. To
the Company's knowledge, GSB Investment Management has not filed a Schedule
13D or Schedule 13G with respect to their ownership of the Company's common
stock.
------------------------
The following table sets forth certain information concerning the
beneficial ownership of common stock as of September 1, 1998 by each Director,
by each of the Executive Officers named in the 'Summary Compensation Table' and
by all Directors and Executive Officers as a group:

<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(a) PERCENT OF CLASS(b)
------------------------------------ ------------------------ -------------------
<S> <C> <C>

Robert F. Bernstock........................................ 0 .00%
Alfred E. Dudley........................................... 446,000 1.14
John C. Ferries............................................ 1,000 .00
James R. Maher............................................. 8,270 .02
James R. McManus........................................... 14,000 .04
Denis Newman............................................... 94,684 .24
Ervin R. Shames............................................ 18,164 .05
Robert G. Tobin............................................ 10,000 .03
William V. Stephenson...................................... 381,125 .98
Thomas H. Rowland.......................................... 180,157 .46
Donald A. DeSantis......................................... 167,839 .43
Einar M. Rod............................................... 1,729 .00
Patrick J. O'Brien......................................... 99,361 .25
All Directors and Executive Officers as a group(c)......... 1,764,649 4.52%
</TABLE>

(footnotes on next page)

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(footnotes from previous page)

(a) Under rules of the SEC, persons who have power to vote or dispose of
securities, either alone or jointly with others, are deemed for purposes of
this table, to be the beneficial owners of such securities. Each nominee,
continuing director and officer has both sole voting power and sole
investment power with respect the shares set forth in the table.

(b) No nominee or continuing director is the beneficial owner of more than 1.1%
of the outstanding shares of common stock.

(c) Includes 192,000, 166,000, 112,000, 95,500, and 411,250 shares which
respectively William V. Stephenson, Thomas H. Rowland, Donald A. DeSantis,
Patrick J. O'Brien and all Directors and other Executive Officers as a
group, have a right to acquire within 60 days of September 1, 1998 upon the
exercise of stock options. The shares issuable upon exercise of options
included herein were deemed to be outstanding for purposes of calculating
the percentages of shares.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

The Company is required to identify any officer, director or owner of more
than 10% of the common stock who during the last fiscal year failed to file
timely with the SEC a required report under Section 16(a) of the Securities
Exchange Act of 1934 relating to beneficial ownership of common stock. Based
solely on a review of information provided to the Company, all persons subject
to the reporting requirements of Section 16(a) of the Securities and Exchange
Act of 1934 filed the required reports on a timely basis for fiscal year 1998.

BOARD OF DIRECTORS AND COMMITTEES

There were five regular and two telephonic meetings of the Board of
Directors during fiscal 1998. All of the incumbent directors attended at least
78% of the total number of meetings of the Board and committees on which they
served. Directors who are employees of the Company do not receive any
compensation for service as directors. Mr. Dudley, who retired from the Company
on September 1, 1994, and relinquished the title of Chairman on January 1, 1997,
received a fee of $100,000 for consulting services from July 1, 1997 through
December 31, 1997. Each non-employee director is currently paid an annual
retainer of $20,000 and fees of $1,000 for attendance at each Board or committee
meeting not held in conjunction with a Board meeting. Board members are paid
$500 for attendance at each telephonic meeting, or committee meeting held in
conjunction with a Board meeting. Directors are also reimbursed for reasonable
expenses involved in attending Board and committee meetings of the Company. In
addition, under the Non-Employee Director Stock Option Plan adopted at the 1995
Annual Meeting, non-employee directors receive 2,000 non-qualified stock options
on the first Friday following the Company's Annual Meeting of Stockholders. The
options vest on the second anniversary of the grant and have an exercise price
equal to the average of the high and low prices on the date of grant.

The members of the Board of Directors are elected to various standing
committees of the Board which include: Audit Committee, Compensation Committee,
Executive Committee, Nominating Committee and Pension Committee.

The functions of the Audit Committee are to recommend a firm of independent
auditors to perform the annual audit; review and approve the scope of the
independent and internal auditors' work; review the effectiveness of the
Company's internal controls; review and approve the fees of the independent
auditors and related matters. The Audit Committee met once in fiscal 1998. The
members of the Audit Committee are Denis Newman, Chairman, Robert F. Bernstock,
John C. Ferries and James R. Maher.

The functions of the Compensation Committee are to review and approve the
salaries of senior officers and managers of the Company; approve the amount
authorized for the Annual Incentive Plan; approve awards under and administer
the Company's Long-Term Incentive Plans; and review additional compensation
arrangements. The Compensation Committee met twice in fiscal 1998. The members
of

<PAGE>

the Compensation Committee are Ervin R. Shames, Chairman, James R. McManus and
Robert G. Tobin.

The function of the Executive Committee is to act for the Board between
regular meetings to the extent permitted by the Delaware General Corporation Law
on matters that need timely attention. The Executive Committee met twice in
fiscal 1998. The members of the Executive Committee are Alfred E. Dudley,
Chairman, Denis Newman, Thomas H. Rowland and William V. Stephenson.

The functions of the Nominating Committee are to establish criteria for
Board membership; search for and screen candidates to fill vacancies on the
Board; recommend an appropriate slate of candidates for election each year;
assess the overall performance of the Board; and consider issues regarding the
composition, tenure and size of the Board. The Nominating Committee will
consider nominations by stockholders. Recommendations should be sent to the
Secretary at 83 Wooster Heights Road, Danbury, CT 06813 no later than May 15,
1999 with respect to the 1999 Annual Meeting of Stockholders and should include
the candidate's name and qualifications and a statement from the candidate that
he or she consents to being named in the Proxy Statement if nominated and will
serve if elected. The Nominating Committee met once in fiscal 1998. The members
of the Nominating Committee are Alfred E. Dudley, James R. McManus, Ervin Shames
and William V. Stephenson.

The functions of the Pension Committee are to supervise the administration
of the Company's pension and savings plans; review the levels of funding and
allocation of funds invested in the plans; and review the performance of the
investments and investment managers against goals. The Pension Committee met
twice in fiscal 1998. The members of the Pension Committee are Robert G. Tobin,
Chairman; Robert F. Bernstock, John C. Ferries and James R. Maher.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board consists of three non-employee
directors who make decisions pertaining to executive compensation and benefits.
The Committee utilizes the services of an outside compensation consultant to
assist in making objective decisions based on data from consumer products
companies of similar size, some of which are in the peer group of companies
included in the stock performance graph.

COMPENSATION PHILOSOPHY

The Company's executive compensation program has three objectives:

1. To provide compensation that rewards executives for meeting and
exceeding internal performance goals and standards.

2. To maintain a compensation program that attracts and retains high
quality executives.

3. To create a link between the interests of the Company's
stockholders, the Company's financial performance and the total
compensation opportunities for its executive officers.

The executive compensation program consists of base salary, an annual cash
incentive plan, long-term stock option incentive plans, a non-qualified deferred
compensation plan, an executive life insurance plan, and qualified and
non-qualified retirement plans.

The Company maintains a benefit program that is competitive with other
consumer products companies of similar size. The program includes qualified
retirement, savings, and disability programs as well as medical, dental and
business travel insurance programs.

Base salaries are targeted slightly below the 50th percentile of
competitive salaries for executives of consumer products companies of similar
size. Salary ranges are established using published surveys and other external
data. Variation in compensation between individuals is based on position value,
experience level and performance against pre-established objectives. Individual
increases are typically given at twelve month intervals, and the amount is based
on the individual's performance and place in the salary range. Prior to
approving individual increases, the Compensation Committee reviews each senior
executive's performance against previously established performance goals.

<PAGE>

The Annual Incentive Plan provides for an annual cash award based on
attainment of operating income goals, and the awards are targeted at slightly
above the 50th percentile for executives of consumer products companies of
similar size. The plan triggers if a pre-approved threshold is achieved.
Individual awards are determined by total corporate, business unit, and
individual performance levels. The performance level of the business unit is
measured on an unweighted basis by market share, and operating income.
Individual performance goals are established for each senior executive at the
commencement of each year. The Compensation Committee approves the total dollar
pool available and the amount awarded to each senior executive participant. In
respect of the named executives in the Summary Compensation Table, the
Compensation Committee will also assess the Company's relative financial
performance against peer group consumer products companies considering such
measures as earnings per share growth, sales growth, improvement in return on
equity and acquisition success.

The Long Term Incentive Plans were established in 1989, 1994 and 1998. All
option shares available under the 1989 Long Term Incentive Plan have been
granted. The 1989 plan provides for non-qualified stock options, limited stock
appreciation rights ('LSAR's') and restricted stock. LSAR's are exercisable only
in change of control situations. The 1994 Performance Stock Option and Incentive
Plan provides for non-qualified stock options, LSAR's and restricted stock.
Options may have an exercise price of either 100 percent of the fair market
value of the underlying shares of common stock ('Market Priced Options') or more
than 100% of such fair market value ('Premium Priced Options'). Of the Market
Priced Options, a portion may vest as of specific dates and a portion may be
subject to performance vesting. At the time of the grant a 'trigger stock price'
or other performance criteria upon which the vesting of performance options will
be based may be established. These options will be exercisable at the earlier of
the date that the market price exceeds the trigger stock price or the ninth
anniversary of the grant. The 1998 Performance Stock Option and Incentive Plan
provides for non-qualified stock options, LSAR's and performance stock units
(for international management). There were no options granted during fiscal year
1998. No restricted stock has been granted under the 1989 or the 1994 Plan, and
there is no provision for restricted stock in the 1998 Plan. The Compensation
Committee approves grants of a sufficient number and type of stock options to
retain executives based on its review of surveys of long-term incentive and
long-term capital accumulation plans available to similar positions at other
consumer product companies of similar size.

In addition to the qualified retirement plans, officers of the Company also
participate in a non-qualified retirement plan that alleviates the impact of tax
or legal restrictions imposed upon the qualified plan when total annual
compensation is used in calculation of pension benefits.

The Company has established a non-qualified deferred compensation plan for
senior executives. This plan permits deferral of a portion of base salary and/or
annual incentive awards to a later date, normally until after retirement.
Interest on deferred compensation is based on 7-year U.S. Treasury Bond yields
plus a margin which is intended to approximate the margin First Brands would
incur if it were issuing a senior unsecured bond with a 7-year maturity. If the
participant defers salary or bonus for seven (7) or more years or until death,
disability or retirement, the interest on the deferred amount for the entire
period will be the Treasury Bond yield, plus the margin, plus 3%.

The Compensation Committee endorses the position that stock ownership by
management provides linkage in aligning management's and shareholder's interest
in enhancing shareholder value although the Committee does not set target
ownership levels for executive equity holdings. During fiscal year 1995,
shareholders approved an amendment to the Annual Incentive Plan which permits
certain members of senior management to elect to receive all or a portion of
their annual incentive award in First Brands common stock instead of cash. Those
who elect stock instead of cash receive a premium of 25% in stock thereby
encouraging management to increase stock ownership. The stock acquired under the
Annual Incentive Plan is restricted in its transferability or sale for a period
of two years from the date of issuance.

Section 162(m) of the Internal Revenue Code, enacted in 1993, limits the
tax deduction that corporations may take with respect to the compensation of
certain executive officers, unless the compensation is 'performance based' as
defined in the Code. The Committee believes that all compensation received by
the executive officers is performance based and in any event the deductibility
limits in the Code have not been reached. There is no loss of deduction for
fiscal year 1998.

<PAGE>

RELATIONSHIP OF CORPORATE PERFORMANCE TO EXECUTIVE COMPENSATION

The Company has two types of executive compensation incentive plans, The
Annual Incentive Plan and the Long Term Incentive Plans (both previously
described), which reward executives based on the performance of the Company.

The Annual Incentive Plan provides compensation based on the attainment of
operating income objectives which are contained in the annual business plan. For
the named executives in the Summary Compensation Table, Company financial
performance relative to a peer group of companies is also considered in order to
validate incentive compensation in comparison with these companies. The annual
business plan is developed by Company management and approved by the Board of
Directors at the beginning of each fiscal year. The financial measures used to
validate incentive awards are approved by the Compensation Committee at the
beginning of each fiscal year.

The Long Term Incentive Plans use stock price appreciation as the incentive
to reward executives over the long term. Compensation gained as a result of this
program has a direct relationship to the gain achieved by investors in the
Company's stock.

1998 FISCAL YEAR COMPENSATION OF CHIEF EXECUTIVE OFFICER

Mr. Stephenson earned $465,000 in base salary during fiscal year 1998 and
received an annual incentive award of $180,000 for his overall performance for
the year. The Compensation Committee determined that these amounts were
justified when considering the company's financial performance for the fiscal
year as well as Mr. Stephenson's personal performance based upon return on
equity, sales growth, acquisition success, market share, operating income,
earnings per share growth and overall management effectiveness. The Compensation
Committee also considered Mr. Stephenson's compensation as compared to chief
executive officers of the peer group of consumer products companies that the
Company traditionally monitors. Mr. Stephenson's total cash compensation (base
salary and annual incentive) for fiscal year 1998 was slightly lower than the
preceding fiscal year.

COMPENSATION COMMITTEE

Ervin R. Shames, Chairman
James R. McManus
Robert G. Tobin

<PAGE>

SUMMARY COMPENSATION TABLE

Furnished below is a summary of the compensation paid and/or awarded to the
Chief Executive Officer and to each of the other four most highly compensated
executive officers of the Company for fiscal years 1996-1998.

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
NAME AND ------------------------------------ COMP.(2) ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OTHER($)(1) OPTIONS(#) COMPENSATION($)(3)
------------------- ---- --------- -------- ----------- --------- ------------------

<S> <C> <C> <C> <C> <C> <C>
William V. Stephenson ............. 1998 $465,000 $180,000 -- -- $36,217
Chairman and CEO 1997 440,000 210,000 -- 70,000 32,058
1996 379,167 300,000 -- 80,000 35,669

Thomas H. Rowland ................. 1998 258,500 90,000 -- -- 14,787
President and COO 1997 241,263 90,000 11,250 40,000 13,404
1996 195,030 120,000 22,500 48,000 15,724

Donald A. DeSantis ................ 1998 218,680 80,000 -- -- 14,019
Senior Vice President 1997 210,080 82,000 -- 25,000 12,155
and CFO 1996 199,530 110,000 -- 32,000 13,133

Einar M. Rod(4) ................... 1998 165,950 40,000 2,250 -- 9,779
Vice President, General Counsel 1997 158,150 32,000 2,000 15,000 8,764
1996 17,456 -- -- -- 524

Patrick J. O'Brien ................ 1998 155,000 45,000 5,625 -- 8,759
Vice President, 1997 146,500 51,000 6,375 25,000 7,102
President, Household Products 1996 137,600 60,000 11,250 32,000 8,076
</TABLE>

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

(1) The amount in this column represents the premium that these individuals
received by selecting First Brands stock rather than cash for a portion of
their award under the Annual Incentive Plan.

(2) There were no options granted under the 1994 Performance Stock Option and
Incentive Plan or the 1998 Plan during 1998 fiscal year for executive
officers and other employees.

(3) All Other Compensation includes the employer match under the Company's
savings plan and the compensation to each individual attributable to the
current dollar value of the premium payable by the Company under its
executive split dollar life insurance program. The employer match under the
savings plan and the life insurance compensation for all executive officers
totaled $47,087 and $93,087, respectively, for fiscal year 1998. Prior to
fiscal 1996, the Company-provided life insurance for the executive officers
was included in the Company's group insurance program.

(4) Mr. Rod joined the Company on May 20, 1996.

<PAGE>

OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES

The following table lists the shares acquired on exercise of options by the
executive officers named in the Summary Compensation Table during the fiscal
year 1998 and certain information as to options outstanding at the end of fiscal
year 1998.

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT FISCAL YEAR END FISCAL YEAR END(1)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------ ----------- -------- ----------- ------------- ----------- -------------

W.V. Stephenson(2)............. 4,000 $64,500 192,000 150,000 $1,989,006 $220,000
T.H. Rowland................... -- -- 166,000 88,000 $1,746,879 $132,498
D.A. DeSantis.................. -- -- 112,000 57,000 $1,235,128 $ 88,000
E.M. Rod....................... -- -- -- 15,000 -- $ 0
P.J. O'Brien................... -- -- 95,500 57,000 $1,069,425 $ 88,000
</TABLE>

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

(1) Values have been calculated based on the closing price of the Company's
common stock reported on the New York Stock Exchange Composite Tape on June
30, 1998, which was $25.2813 per share.

(2) Options were exercised to acquire additional Company common stock.

RETIREMENT PLAN

First Brands currently maintains a non-contributory defined benefit
retirement plan (the 'Retirement Plan') covering 78% of all U.S. employees
including those of subsidiaries. The officers listed in the foregoing Summary
Compensation Table are covered by the Retirement Plan. Outside the United
States, certain of First Brands' subsidiaries have retirement programs that are
generally administered by trustees or insurance companies.

Under the Retirement Plan, the monthly amount of an employee's retirement
benefit upon retirement at age 65 is the greater of (a) 1.2% of average monthly
compensation received during the three-year period preceding retirement, or 1.2%
of average monthly compensation received during the three best calendar years in
the final ten calendar years preceding retirement, if the latter average would
result in a higher pension benefit, multiplied by the number of years of
credited service plus $12; or (b) 1.5% of the average monthly compensation
computed as in (a) above, multiplied by the number of years of credited service,
less a percentage, based on service and not exceeding 50%, of the projected
primary Social Security benefit or such maximum percentage as is allowed under
the Internal Revenue Code. In January 1995, the Company announced a change in
this formula beginning January 2000, to a defined benefit based on years of
credited service and career average compensation. Effective January 1, 2000 the
formula for the retirement program is changed as follows: (a) a pension benefit
will be calculated for each individual as of December 31, 1999 using the present
formulas and, (b) 1.5% of eligible annual earnings for each year will be added
to the amount in (a) above, to determine the total benefit.

An employee who is (i) age 62 or over with ten or more years of credited
service or (ii) whose age and years of credited service add up to 85, may
voluntarily retire earlier than age 65 with a retirement benefit, unreduced
because of early retirement. Employees may retire as early as age 50 with 10
years of credited service but will receive an actuarially reduced pension
benefit.

The amounts contributed by First Brands to the Retirement Plan are
calculated on a group basis that is actuarially determined. No specific amount
is set aside by First Brands for any individual officer or employee under the
Retirement Plan. The amounts shown in the following table are the estimated
annual retirement benefits payable at age 65 for the respective average annual
remuneration levels and years of service credit indicated. Actual benefits will
not exceed limits permitted under the Internal Revenue Code and applicable
regulations. Amounts shown are computed based upon straight life annuity amounts
and are reduced by 1.5% of the employee's primary Social Security benefit for
each year of the employee's credited service up to a maximum deduction of 50% of
such Social Security benefit. Annual retirement benefits are based on average
earnings.

<PAGE>

For federal income tax purposes the amount of benefits that can be paid
from the qualified plan is restricted. First Brands maintains a nonqualified
plan ('Executive Retirement Plan') the effect of which is to award retirement
benefits to all employees on a uniform basis. The Executive Retirement Plan is
unfunded.

The Company also maintains a savings plan as part of its long term
retirement/savings program to which it contributes to the account of each
eligible employee who chooses to participate. Effective January 1995, the
Company contributes 50% of each employee's basic 401(k) contributions up to 6%
of regular earnings. Any regular employee of First Brands or its subsidiaries is
eligible to participate. In fiscal year 1996, the Company instituted a Profit
Sharing contribution based on the Company's operating performance. Profit
Sharing will be contributed in shares of First Brands common stock, allocated to
separate employee 401(k) accounts based on Company service credit.

As of June 30, 1998, the credited years of service (credited service is
combined from First Brands and Union Carbide Corporation) for the individuals
named in the Summary Compensation Table were as follows: William V. Stephenson,
34 years; Thomas H. Rowland, 24 years; Donald A. DeSantis, 12 years; Einar M.
Rod, 2 years; and Patrick J. O'Brien, 13 years.

<TABLE>
<CAPTION>
ESTIMATED ANNUAL RETIREMENT BENEFITS
AT AGE 65 FOR YEARS OF SERVICE CREDIT
AVERAGE ANNUAL REMUNERATION --------------------------------------------------------
USED FOR CALCULATING RETIREMENT BENEFITS 25 30 35 40 45
- ------------------------------------------- -------- -------- -------- -------- --------

$150,000................................... $ 56,250 $ 67,500 $ 78,750 $ 90,000 $101,250
$200,000................................... 75,000 90,000 105,000 120,000 135,000
$250,000................................... 93,750 112,500 131,250 150,000 168,750
$300,000................................... 112,500 135,000 157,500 180,000 202,500
$350,000................................... 131,250 157,500 183,750 210,000 236,250
$400,000................................... 150,000 180,000 210,000 240,000 270,000
$450,000................................... 168,750 202,500 236,250 270,000 303,750
$500,000................................... 187,500 225,000 262,500 300,000 337,500
$550,000................................... 206,250 247,500 288,750 330,000 371,250
$600,000................................... 225,000 270,000 315,000 360,000 405,000
$700,000................................... 262,500 315,000 367,500 420,000 472,500
$800,000................................... 300,000 360,000 420,000 480,000 540,000
</TABLE>

SEVERANCE AGREEMENTS

The Company has also adopted an employment severance agreement with certain
executive officers generally providing severance benefits if the employee is
terminated for reasons other than 'cause' within two years after a 'change in
control.' The severance benefits include cash payments equal to two year's
salary and bonus, except for William V. Stephenson, who would receive payments
equal to three years salary and bonus, and certain other employee and retirement
benefits. Provision for a tax gross-up payment is also included to cover excise
taxes, if any, on payments paid under these agreements.

<PAGE>

FIVE YEAR STOCK PERFORMANCE GRAPH

The following table compares total shareholder returns for the Company to
the Standard & Poor's 500 Stock Index ('S&P 500') and the Standard & Poor's
Midcap 400 Consumer Products Index ('S&P 400 CP')(1) for the five-year period
beginning June 30, 1993 through the fiscal year end of June 30, 1998 (the
'Performance Period'). Assuming $100 was invested on June 30, 1993 in the
Company's common stock and in each of the foregoing indices and the reinvestment
of dividends, if any, on a quarterly basis, the total return for the Company's
common stock was 56% during the Performance Period as compared with a total
return during the same period for the S&P 500, the S&P Midcap 400 CP and the S&P
400 & 500 HP of 169%, 11%, and 206%, respectively. The compound annual growth
rate for the Company's stock was 9.3% for the five-year period.

There can be no assurance that the Company's stock performance will
continue into the future with the same or similar trends depicted in the graph
below. The Company will not make or endorse any predictions as to future stock
performance.

FIRST BRANDS CORPORATION
Total Return Performance
TOTAL SHAREHOLDER RETURNS

[PERFORMANCE GRAPH]

COMPARISON SINCE JUNE 1993

6/93 6/94 6/95 6/96 6/97 6/98 CAGR(3)
------ ------ ------ ------ ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
FBC 100 102 141 169 163 156 9.3%
S&P 500 100 101 139 171 229 269 21.9%
S&P 400
CP(1) 100 71 81 85 103 111 2.1%
S&P 400 &
500 HP(2) 100 108 148 192 271 306 25.0%

</TABLE>

(See footnotes on page 15)

<PAGE>

STOCK PERFORMANCE GRAPH SINCE DECEMBER 1989
The following table compares total shareholder returns for the Company to
the Standard & Poor's 500 Stock Index ('S&P 500') and the Standard & Poor's
Midcap 400 Consumer Products Index ('S&P 400 CP')(1) for the eight and a half
year period beginning on December 29, 1989, the end of the first month following
the Company's initial public offering ('IPO') through the fiscal year end of
June 30, 1998. Assuming $100 was invested on December 29, 1989 in the Company's
common stock and in each of the foregoing indices and the reinvestment of
dividends, if any, on a quarterly basis, the total return for the Company's
common stock was 192% as compared with a total return during the same period for
the S&P 500, the S&P Midcap 400 CP and the S&P 400 & 500 HP, of 242%, 92%, and
427%, respectively. The compound annual growth rate for the Company's stock was
13.4% for the eight and a half year period.

FIRST BRANDS CORPORATION
Total Return Performance
TOTAL SHAREHOLDER RETURNS

[PERFORMANCE GRAPH]

COMPARISON SINCE DECEMBER 1989

12/89 6/90 6/91 6/92 6/93 6/94 6/95 6/96 6/97 6/98 CAGR(3)
------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FBC 100 109 139 157 187 191 263 316 304 292 13.4%
S&P 500 100 97 126 136 150 152 209 257 257 342 15.5%
S&P 400
CP(1) 100 106 168 175 173 123 140 147 178 192 8.0%
S&P 400 &
500 HP(2) 100 120 131 161 172 186 256 331 467 527 21.5%

</TABLE>

(footnotes on next page)

<PAGE>

(footnotes from previous page)

(1) The S&P Midcap 400 Consumer Products Index is comprised of the following
companies: Carter-Wallace, Inc., Church & Dwight, Inc., A.T. Cross, Dial
Corp., Enesco Group, Inc. (formerly Stanhome, Inc.), First Brands
Corporation, Gibson Greetings, Inc., Lancaster Colony Corporation, National
Presto, Inds., Inc., Perrigo Company, and Tambrands (acquired by Procter &
Gamble August 18, 1997). First Brands Corporation has not been eliminated
from this peer group for purposes of this presentation. This index will be
replaced by a combined S&P 400 and 500 Household Products Index included in
the above graph which the Company believes more accurately reflects its peer
group.

(2) The combined S&P Midcap 400 and 500 Household Products Index is comprised of
the following companies: Church & Dwight, Inc., Clorox Company,
Colgate-Palmolive Company, Dial Corporation, First Brands Corporation, Fort
James Corporation, Kimberly-Clark Corporation, and Procter & Gamble Company.
First Brands has not been eliminated from this peer group for purposes of
this presentation. This index will replace the S&P Midcap 400 Consumer
Products Index, noted above.

(3) Compound Annual Growth Rate.

<PAGE>

II. RATIFY APPOINTMENT OF INDEPENDENT AUDITORS

The Board of Directors has selected KPMG Peat Marwick LLP as the
independent auditors to audit the financial statements of the Company and its
consolidated subsidiaries for the fiscal year 1999. KPMG Peat Marwick LLP has
served First Brands in the capacity of independent auditors since the Company's
incorporation in 1986.

Representatives of KPMG Peat Marwick LLP will be present at the Annual
Meeting of Stockholders to answer any appropriate questions. They will have the
opportunity to make a statement if they so desire.

The Board of Directors recommends a vote FOR the appointment of KPMG Peat
Marwick LLP.

III. OTHER MATTERS

The Company knows of no other matters to come before the meeting. If any
other matters properly come before the meeting, the proxies solicited hereby
will be voted on such matter in accordance with the judgment of the persons
voting such proxies and will be determined by the vote of a majority of the
shares voting thereon at the meeting.

IV. STOCKHOLDER PROPOSALS

Stockholders wishing to submit proposals for inclusion in the Board of
Director's proxy material for the Annual Meeting of Stockholders tentatively
scheduled for October 22, 1999 should submit them in writing to the Secretary of
the Company, First Brands Corporation, 83 Wooster Heights Road, P.O. Box 1911,
Danbury, CT 06813-1911 no later than May 15, 1999.

<PAGE>

[Logo]

<PAGE>

APPENDIX 1

PROXY CARD

PROXY FIRST BRANDS CORPORATION
83 WOOSTER HEIGHTS ROAD
DANBURY, CT 06813-1911

[LOGO]

ANNUAL MEETING OF STOCKHOLDERS -- FRIDAY, OCTOBER 23, 1998

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints WILLIAM V. STEPHENSON and JOSEPH B. FUREY,
and each of them, with power of substitution, as proxies to represent the
undersigned at the Annual Meeting of Stockholders to be held at the Danbury
Hilton Hotel, 18 Old Ridgebury Road, Danbury, Connecticut on Friday, October 23,
1998 at 9:00 a.m., local time and at any adjournment thereof, and to vote the
shares of common stock the undersigned would be entitled to vote if personally
present, as indicated on the reverse side hereof.

THE SHARES REPRESENTED BY THE PROXY WILL BE VOTED AS DIRECTED. IF NO
CONTRARY INSTRUCTION IS GIVEN, THE SHARES WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES FOR DIRECTOR SET FORTH BELOW, FOR THE RATIFICATION OF KPMG PEAT MARWICK
LLP AS INDEPENDENT AUDITORS FOR FISCAL 1999 AND AT THE DISCRETION OF THE PROXY
UPON SUCH OTHER BUSINESS, IF ANY, AS MAY BE PROPERLY BROUGHT BEFORE THE MEETING.

PLEASE MARK BOXES [*] OR [x] IN BLUE OR BLACK INK.

<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS FOR all nominees listed below (except as WITHHOLD AUTHORITY to vote for all
indicated to the contrary below) [ ] nominees listed below [ ]

Robert F. Bernstock, Dennis Newman,
Ervin R. Shames
</TABLE>

(Continued and to be signed on the other side)

<PAGE>

INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.

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

2. Proposal to ratify the selection of KPMG Peat Marwick as independent auditors
for the fiscal year 1999.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

If no direction is made, this proxy will be voted for Proposals 1 and 2.

Please sign exactly as
name appears below.
When shares are held by
joint tenants, both
should sign. When
signing as attorney, as
executor, administrator,
trustee or guardian,
please give full title as
such. If a corporation,
please sign in full
corporate name by
President or other
authorized officer. If
a partnership, please
sign in partnership
name by authorized
person.

Dated:..........., 1998

.......................
Signature

.......................
Signature if held
jointly

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.