10-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

[	X	]		ANNUAL REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the fiscal year ended September 30, 1999
			OR
[		]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from ________________ to ________________

Commission file number 1-5110

BERGEN BRUNSWIG CORPORATION

(Exact name of registrant as specified in its charter)

New Jersey	22-1444512
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
4000 Metropolitan Drive, Orange, California	92868-3510
(Address of principal executive offices)	(Zip Code)
Registrant's telephone number, including area code	(714) 385-4000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Class A Common Stock - par value $1.50 per share	New York Stock Exchange
6 7/8% Exchangeable Subordinated Debentures due July 15, 2011	New York Stock Exchange
$150,000,000 7 3/8% Senior Notes due 2003	New York Stock Exchange
7.80% Trust Originated Preferred Securities SM ("TOPrS SM")	New York Stock Exchange

(Cover page continued)

Securities registered pursuant to Section 12(g) of the Act:

7% Convertible Subordinated Debentures due March 1, 2006 - Durr-Fillauer Medical, Inc.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any

amendment to this Form 10-K. [ ]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes 4 No__

At November 30, 1999, 134,218,013 shares of Class A Common Stock were outstanding. The aggregate market value of the Class A Common Stock held by nonaffiliates of the registrant on November 30, 1999 was $1,059,462,682.

Documents Incorporated by Reference

List hereunder the following documents if incorporated by reference and the part of the Form 10-K into which the document is incorporated:

Within 120 days after September 30, 1999, the Company will either file a definitive proxy statement for its 2000 annual meeting of shareowners which will be incorporated by reference in Part III of this Annual Report on Form 10-K or will file an amendment to this Annual Report to provide the information called for by such Part III.

TABLE OF CONTENTS
PART I
ITEM			PAGE
	Forward-looking Statements		I - 1
1.	Business		I - 1
2.	Properties		I - 7
3.	Legal Proceedings		I - 8
4A.	Executive Officers of the Registrant		I - 14
PART II
5.	Market for the Registrant's Common Equity and		II - 1
		Related Stockholder Matters
6.	Selected Financial Data		II - 2
7.	Management's Discussion and Analysis of Financial		II - 3
		Condition and Results of Operations
7a.	Quantitative and Qualitative Disclosures About Market Risk		II - 20
8.	Financial Statements and Supplementary Data		II - 21
9.	Changes in and Disagreements with Accountants		II - 57
		on Accounting and Financial Disclosure
PART III
10.	Directors of the Registrant		III - 1
11.	Executive Compensation		III - 1
12.	Security Ownership of Certain Beneficial Owners		III - 1
		and Management
13.	Certain Relationships and Related Transactions		III - 1
PART IV
14.	Exhibits, Financial Statement Schedules and Reports		IV - 1
		on Form 8-K
	Signatures		IV - 6

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Portions of this Annual Report on Form 10-K include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward- looking statements are subject to risks, uncertainties and other factors which could cause actual results to materially differ from those projected or implied. The most significant of such risks, uncertainties and other factors is described in Item 3 - Legal Proceedings and Exhibit 99(a) to this Annual Report.

PART I

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ITEM 1.	BUSINESS
	A.	General Development of Business

Bergen Brunswig Corporation, a New Jersey corporation formed in 1956, and its subsidiaries (collectively, the "Company") is a diversified drug and health care distribution organization. The Company is one of the nation's largest wholesalers of pharmaceuticals, medical-surgical supplies, and specialty healthcare products to the managed care and retail pharmacy markets, and also distributes pharmaceuticals to long-term care and seriously ill patients. The Company provides product distribution, logistics, pharmacy management programs, consulting services, and Internet fulfillment services designed to reduce costs and improve patient outcomes across the entire healthcare spectrum.

The Company has acquired a number of businesses during the past three fiscal years. Following is a summary of such acquisitions, which are more fully described under the caption "Business Acquisitions" in Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations and in Note 5 of Notes to Consolidated Financial Statements appearing in Part II of this Annual Report:

Acquisition Date	Acquired Entity	Segment
April 1999	PharMerica, Inc.	Pharmaceutical Services
February 1999	J.M. Blanco, Inc.	Pharmaceutical Distribution
January 1999	Stadtlander Operating Company, LLC	Pharmaceutical Services
December 1998	Medical Initiatives, Inc.	Pharmaceutical Distribution
September 1998	Ransdell Surgical, Inc.	Other Businesses
September 1998	Choice Systems, Inc.	Other Businesses
August 1998	The Lash Group, Inc.	Other Businesses
May 1998	Pacific Criticare, Inc.	Other Businesses
January 1998	Besse Medical Services, Inc.	Pharmaceutical Distribution

On August 23, 1997, the Company signed a definitive merger agreement with Cardinal Health, Inc. ("Cardinal"), a distributor of pharmaceuticals and provider of value-added pharmaceutical-related services, headquartered in Dublin, Ohio. The merger agreement called for the Company to become a wholly-owned subsidiary of Cardinal and for shareowners of the Company to receive Cardinal Common Shares in exchange for outstanding shares of the Company's Common Stock. On July 31, 1998, the United States District Court for the District of Columbia granted the request of the Federal Trade Commission for a preliminary injunction to halt the proposed merger. On August 7, 1998, the Company and Cardinal jointly terminated the merger agreement.

On October 14, 1999, the Company announced that it would not meet analysts' consensus earnings estimates for its fourth quarter and fiscal year ended September 30, 1999. On November 4, 1999, the Company reported fiscal 1999 earnings which were within the revised range. Lower than expected results at the Company's PharMerica, Inc., and Stadtlander Operating Company, LLC subsidiaries, along with a higher LIFO reserve provision for Bergen Brunswig Drug Company, were the principal causes of the earnings shortfall. In addition, the Company recorded an aggregate $53.7 million special provision for doubtful receivables at PharMerica and Stadtlander, primarily related to pre-acquisition receivables and the adverse effect of the Medicare Prospective Payment System on PharMerica's customer base. See Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations for further discussion.

B. Narrative Description of Business

The Company is organized based upon the products and services it provides to its customers. The Company's operating businesses has been aggregated into three reportable segments: Pharmaceutical Distribution, Pharmaceutical Services, and Other Businesses. See Note 13 of Notes to Consolidated Financial Statements appearing in Part II of this Annual Report.

Pharmaceutical Distribution

The Pharmaceutical Distribution segment includes Bergen Brunswig Drug Company, ASD Specialty Healthcare and a small repackaging entity.

Bergen Brunswig Drug Company ("BBDC") is one of the largest national distributors of products sold or used by institutional (hospital) and retail pharmacies. BBDC distributes a full line of products, including pharmaceuticals, proprietary medicines, cosmetics, toiletries, personal health products, sundries, and home healthcare supplies and equipment from 33 locations in 24 states and Puerto Rico. These products are sold to hospital pharmacies, managed care facilities, health maintenance organizations ("HMOs"), independent retail pharmacies, pharmacy chains, supermarkets, food-drug combination stores and other retailers located in all 50 states, the District of Columbia, Puerto Rico and Guam.

BBDC has been an innovator in the development and utilization of computer-based retail order entry systems and of electronic data interchange ("EDI") systems including computer-to-computer ordering systems with suppliers. During fiscal 1999, substantially all of BBDC's customer orders were received via electronic order entry systems. These systems, combined with daily delivery, are designed to improve customers' cash and inventory management, and profitability, by freeing them from the burden of maintaining large inventories. Although these systems require capital expenditures by the Company, benefits from these systems to BBDC are realized through increased productivity. BBDC is expanding its electronic interface with its suppliers and now electronically processes a substantial portion of its purchase orders, invoices and payments. BBDC has eight regional distribution centers ("RDCs") among its locations. RDCs help improve customer service levels because a wider product selection is more readily available. These facilities serviced 52% of BBDC's sales volume in fiscal 1999.

In June 1996, BBDC introduced its Generic Purchasing Program ("GPP"). Designed to reduce customers' generic pharmaceutical costs, GPP utilizes the products of a selected group of generic manufacturers and combines that benefit with substantial volume to leverage buying power for BBDC's customers.

BBDC's InterLinxTM Reporting module is an on-line system that gives customers access to their purchase history and allows them to use this information for analysis and custom reports. InterLinx delivers immediate access to two years of detailed purchasing data for individual and multi-site customers. InterLinx also provides daily updates of pricing and contract data.

BBDC's PlusCareTM Provider network offers a nationwide presence to managed care organizations on behalf of independent and small chain pharmacies, allowing the pharmacists to focus on patient care while BBDC negotiates and maintains contracts and oversees compliance issues.

BBDC also provides a wide variety of promotional, advertising, merchandising, and marketing assistance to independent community pharmacies. For example, the Good Neighbor Pharmacyâ program utilizes circular and media advertising to strengthen the consumer image of the independent pharmacy without sacrificing its local individuality. Other programs for the independent community pharmacy include in-store merchandising programs, private label products, shelf management systems, pharmacy computers and a fully-integrated point-of-sale system marketed under BBDC's trademark of OmniPhase TM.

Hospital and other institutional accounts are offered a wide variety of inventory management and information services by BBDC to better manage inventory investment and contain costs. AccuLine TM, introduced in June 1995, provides an on-line, real-time, hospital inventory management system in a Windows TM(a trademark of Microsoft â Corporation) environment and features local area network capability.

ASD Specialty Healthcare ("ASD") was established during fiscal 1994 to respond to the rapid growth in the alternate site business. ASD is a leading supplier of pharmaceuticals and other products and services to physicians in the oncology, plasma, nephrology, vaccine and other specialty healthcare markets.

BBDC and ASD have developed and implemented industry-leading Internet strategies. BBDC established a new website, myGNP.com, to strengthen branding opportunities and provide an Internet presence to its independent retail customers. BBDC operates an Internet fulfillment center for over-the-counter drugs, health and beauty aids, and other non-prescription products in Louisville, Kentucky. The fulfillment center currently has four e-commerce customers which are generating approximately 75,000 orders per month. ASD established the pharmaceutical industry's first Internet auction site, Pharmabid.com, through which physicians and other licensed healthcare providers can bid for biological plasma and other short-dated products at competitive market prices.

Pharmaceutical Services

The Pharmaceutical Services segment primarily includes PharMerica Inc. ("PharMerica") and Stadtlander Operating Company, LLC ("Stadtlander").

PharMerica is a leading provider of institutional pharmacy services to the elderly, chronically ill and disabled in long-term care and alternate site settings, including skilled nursing facilities, assisted living facilities, specialty hospitals, residential living communities and the home. PharMerica also provides mail order pharmacy services to workers' compensation patients and the catastrophically ill. Currently, PharMerica serves approximately 339,000 long-term care patients and 110,000 workers' compensation patients.

PharMerica's institutional pharmacy business involves the purchase of bulk quantities of prescription and nonprescription pharmaceuticals, principally from BBDC, and the distribution of those products to residents in long-term care facilities. Unlike hospitals, most long-term care facilities do not have onsite pharmacies to dispense prescription drugs, but depend instead on institutional pharmacies such as PharMerica to provide the necessary pharmacy products and services and to play an integral role in monitoring patient medication. PharMerica's pharmacies dispense pharmaceuticals in patient-specific packaging in accordance with physician orders. In addition, PharMerica provides infusion therapy services and Medicare Part B products, as well as formulary management and other pharmacy consulting services.

PharMerica's network of institutional pharmacies covers a geographic area that includes over 85% of the nation's long-term care beds. Each PharMerica pharmacy typically serves customers within a 150-mile radius.

In its mail order business, PharMerica's workers' compensation services include: home delivery of prescription drugs, medical supplies and equipment; an array of computer software solutions to reduce the payor's administrative costs; and an on-line retail prescription drug card service which allows patients to obtain prescription drugs from a national network of over 45,000 retail pharmacies.

Stadtlander is the nation's leading provider of disease-specific pharmaceutical care to people living with challenging health conditions such as HIV/AIDS, organ transplant, serious mental illness, and infertility. Stadtlander is also the nation's leading provider of pharmaceutical care to the privatized corrections market. Currently, Stadtlander serves approximately 45,000 patients and 240,000 prison inmates primarily within the privatized corrections market.

Stadtlander provides its distribution products and services from its principal facility in Pittsburgh, Pennsylvania and 20 regional pharmacies nationwide.

Other Businesses

The Other Businesses segment includes Bergen Brunswig Medical Company ("BBMC"), Integrated Commercialization Solutions and The Lash Group ("ICS/Lash"), and Choice Systems, Inc. ("Choice").

BBMC distributes a variety of medical and surgical products to individual hospitals and alternate site healthcare providers through distribution centers located in every region of the United States except the northeast. BBMC serves hospital customers and alternate site customers in 45 states and the District of Columbia. Alternate site customers include outpatient clinics, nursing homes, surgery centers, dialysis and oncology centers, emergency centers and laboratories.

ICS/Lash, through ICS, provides distribution, accounting, marketing, education and other outsourcing services for pharmaceutical manufacturers. Through The Lash Group, it provides consulting and management of reimbursement and patient-assistance programs.

Choice develops and markets inventory management systems and related software for hospitals and other healthcare providers.

1. Competition

BBDC, ASD and BBMC, which represent some of the nation's largest pharmaceutical and medical-surgical supplies distributors measured by sales, face intense competition from other national pharmaceutical and medical-surgical supplies distributors, as well as regional and local full-line and short-line distributors, direct selling manufacturers and specialty distributors. The principal competitive factors are service and price. Competition continues to drive down the gross profit markup percentage, thereby lowering distributors' gross profit margins.

The institutional pharmacy market is fragmented and competition varies significantly among local geographic markets. PharMerica's competitors include independent retail pharmacies, retail pharmacy chains, long-term care company-owned captive pharmacies and national institutional pharmacies. Management believes that the competitive factors most important in PharMerica's lines of business are quality and range of service offered, competitive prices, reputation with referral sources, ease of doing business with healthcare providers, and the ability to develop and maintain referral sources. One of PharMerica's present competitors is larger than PharMerica. In addition, there are relatively few barriers to entry in PharMerica's local markets. In its mail order pharmacy business, PharMerica primarily competes with local retail pharmacies and medical equipment supply companies, and competes primarily on the basis of the effectiveness of its cost containment services.

Stadtlander is the nation's largest entity providing specialized pharmaceutical services for home delivery and the privatized corrections market. Stadtlander competes with other specialty retail pharmacies and smaller specialty pharmaceutical distributors; in the privatized corrections market, it also competes with company-owned and government operated captive pharmacies.

2. Employees

As of November 30, 1999, the Company employed approximately 13,000 people. The Company considers its relationship with its employees and the unions representing certain of its employees to be satisfactory.

3. Government Regulation

Certain pharmaceutical products and medical supplies sold by the Company are subject to federal and state statutes and regulations governing the sale, marketing, packaging and distribution of prescription drugs, including controlled substances, and medical devices. Furthermore, the Company (particularly in its PharMerica and Stadtlander operations) and/or its customers are subject to extensive licensing requirements and comprehensive regulation governing various aspects of the healthcare delivery system, including the so called "fraud and abuse" laws. The fraud and abuse laws preclude (a) persons from soliciting, offering, receiving or paying any remuneration in order to induce the referral of a patient for treatment or for inducing the ordering or purchasing of items or services that are in any way paid for by Medicare or Medicaid and (b) physicians from making referrals to certain entities with which they have a financial relationship. The fraud and abuse laws and regulations are broad in scope and are subject to frequent modification and varied interpretation. Significant criminal, civil and administrative sanctions may be imposed for violation of these laws and regulations.

As part of various changes made in Medicare, in 1997 the United States Congress established the Prospective Payment System ("PPS") for Medicare patients in skilled nursing facilities under which such facilities are paid a federal daily rate for virtually all covered skilled nursing facility services. Under the PPS, PharMerica's skilled nursing facility customers are no longer able to pass through their costs for certain products and services provided by PharMerica. Instead, PharMerica's customers receive a federal daily rate to cover the costs of all eligible goods and services provided to Medicare patients, which may include certain pharmaceutical and other goods and services provided by PharMerica that were previously reimbursed separately under Medicare. Since the amount of skilled nursing facility Medicare reimbursement is limited by the PPS, facility customers now have an increased incentive to negotiate with PharMerica to minimize the costs of providing goods and services to patients covered under Medicare. PharMerica continues to bill skilled nursing facilities on a negotiated fee schedule. Implementation of PPS has had a material adverse effect on the business, financial condition and results of operations of PharMerica.

As a result of a wide variety of political, economic and regulatory influences, the healthcare delivery industry in the United States is under intensive scrutiny and subject to fundamental changes. A variety of new approaches have been proposed, including mandated basic healthcare benefits and controls on healthcare spending through limitations on the growth of private health insurance premiums and Medicare and Medicaid spending. The Company anticipates that Congress and state legislatures will continue to review and assess alternative healthcare delivery systems and payment methods and that public debate with respect to these issues will likely continue in the future. Because of uncertainty regarding the ultimate features of reform initiatives and their enactment and implementation, the Company cannot predict which, if any, of such reform proposals will be adopted, when they may be adopted, or what impact they may have on the Company.

4. Other

While the Company's operations may show quarterly fluctuations, the Company does not consider its business to be seasonal in nature.

Although the Company's computer service operations expend time and effort on the development and marketing of computer software used in support of services offered by the Company for its customers, which are described in part elsewhere herein, the Company has not, during the past three fiscal years, expended any material amounts on research and development of computer software for sale.

The Company relies heavily on computer technology throughout its businesses to effectively carry out its day-to-day operations. The Company has assessed its computer systems and has determined that they are "Year 2000" compliant. For a detailed discussion of the Company's Year 2000 compliance, see Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in Part II of this Annual Report.

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ITEM 2. PROPERTIES

Because of the nature of the Company's business, office and warehousing facilities are operated in widely dispersed locations in the United States. Some of the facilities are owned by the Company, but most are leased on a long-term basis. The Company considers its operating properties to be in satisfactory condition and well utilized with adequate capacity for growth.

As of November 30, 1999, the Pharmaceutical Distribution segment operations were located in 36 leased and 15 owned locations ranging in size from approximately 5,800 to 231,500 square feet and have a combined area of approximately 3,744,000 square feet. The lease expiration dates of the leased facilities range from fiscal 2000 to fiscal 2008.

As of November 30, 1999, the Pharmaceutical Services segment operations were located in 206 leased locations ranging in size from approximately 200 to 89,300 square feet and have a combined area of approximately 1,477,000 square feet. The lease expiration dates of the leased facilities range from fiscal 2000 through fiscal 2010.

As of November 30, 1999, the Other Businesses segment operations were located in 39 leased and 5 owned locations ranging in size from approximately 2,000 to 188,000 square feet and have a combined area of approximately 2,017,000 square feet. The lease expiration dates of the leased facilities range from fiscal 2000 to fiscal 2010.

The Company owns and leases an aggregate of approximately 295,000 square feet of general and executive offices in Orange, California. The leased facility is subject to a lease that expires in fiscal 2004. The owned facility was purchased in October 1999.

The combined area of the Company's leased and owned facilities was approximately 5,130,000 and 2,403,000 square feet, respectively, as of November 30, 1999.

For additional information regarding the Company's lease obligations, see Note 7 of Notes to Consolidated Financial Statements in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report.

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ITEM 3. LEGAL PROCEEDINGS

There have been no new material developments in the legal proceedings as previously reported in Part I, Item 3 of the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1998 filed with the Securities and Exchange Commission on December 29, 1998, except as otherwise set forth below.

Section 1.

Between August 3, 1993 and February 14, 1994, the Company, along with various other pharmaceutical industry-related companies, was named as a defendant in eight separate state antitrust actions in three courts in California. These lawsuits are more fully detailed in "Item 1 - Legal Proceedings" of Part II of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994 as filed with the Securities and Exchange Commission and is incorporated herein by reference. In April 1994, these California state actions were all coordinated as Pharmaceutical Cases I, II and III, and assigned to a single judge in San Francisco Superior Court. On August 22, 1994, a Consolidated Amended Complaint ("California Complaint"), which supersedes and amends the eight prior complaints, was filed in these actions.

The California Complaint alleges that the Company and 35 other pharmaceutical industry-related companies violated California's Cartwright Act, Unfair Practices Act, and the Business and Professions Code unfair competition statute. The California Complaint alleges that defendants jointly and separately engaged in secret rebating, price fixing and price discrimination between plaintiffs and plaintiffs' alleged competitors who sell pharmaceuticals to patients or retail customers. Plaintiffs seek, on behalf of themselves and a class of similarly situated California pharmacies, injunctive relief and treble damages in an amount to be determined at trial. The judge struck the class allegations from the Unfair Practices Act claims.

Between August 12, 1993 and November 29, 1993, the Company was also named in 11 separate Federal antitrust actions. All 11 actions were consolidated into one multidistrict action in the Northern District of Illinois entitled, In Re Brand-Name Prescription Drugs Antitrust Litigation, No. 94 C. 897 (MDL 997). On March 7, 1994, plaintiffs in these 11 actions filed a consolidated amended class action complaint ("Federal Complaint") which amended and superseded all previously filed Federal complaints against the Company. The Federal Complaint names as defendants the Company and 30 other pharmaceutical industry-related companies. The Federal Complaint alleges, on behalf of a nationwide class of retail pharmacies, that the Company conspired with other wholesalers and manufacturers to discriminatorily fix prices in violation of Section 1 of the Sherman Act. The Federal Complaint seeks injunctive relief and treble damages. On November 15, 1994, the Federal court certified the class defined in the Federal Complaint for the time period October 15, 1989 to the present. These lawsuits are more fully detailed in "Item 1 - Legal Proceedings" of Part II of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994 as filed with the Securities and Exchange Commission and is incorporated herein by reference.

On May 2, 1994, the Company and Durr Drug Company were named as defendants, along with 25 other pharmaceutical related-industry companies, in a state antitrust class action in the Circuit Court of Greene County, Alabama entitled Durrett v. UpJohn Company, et al., No. 94-029 ("Alabama Complaint"). The Alabama Complaint alleges on behalf of a class of Alabama retail pharmacies and a class of Alabama consumers that the defendants conspired to discriminatorily fix prices to plaintiffs at artificially high levels. The Alabama Complaint seeks injunctive relief and treble damages. On June 25, 1999, the Alabama Supreme Court held that plaintiffs' claims are not valid under the Alabama antitrust statute. On November 29, 1999 the trial court dismissed the entire action in accordance with the mandate of the Alabama Supreme Court. Similar actions were also filed against the Company and other wholesalers and manufacturers in Mississippi, Montgomery Drug v. UpJohn, et. al., No. 97-0103, and in Tennessee, Graves v. Abbott, et. al., No. 25,109-II. The various state actions have not yet been set for trial.

On October 21, 1994, the Company entered into a sharing agreement with five other wholesalers and 26 pharmaceutical manufacturers. Among other things, the agreement provides that: (a) if a judgment is entered against both the manufacturer and wholesaler defendants, the total exposure for joint and several liability of the Company is limited to $1.0 million; (b) if a settlement is entered into by, between, and among the manufacturer and wholesaler defendants, the Company has no monetary exposure for such settlement amount; (c) the six wholesaler defendants will be reimbursed by the 26 pharmaceutical defendants for related legal fees and expenses up to $9.0 million total (of which the Company will receive a proportionate share); and (d) the Company is to release certain claims which it might have had against the manufacturer defendants for the claims presented by the plaintiffs in these cases. The agreement covers the Federal court litigation, as well as the cases which have been filed in various state courts. In December 1994, plaintiffs in the Federal action had moved to set aside the agreement, but plaintiffs' motion was denied on April 25, 1995. In 1996, the class plaintiffs filed a motion for approval of a settlement with 12 of the manufacturer defendants, which would result in dismissal of claims against those manufacturers and a reduction of the potential claims against the remaining defendants, including those against the Company. The Court granted approval for the settlement. In 1998, an additional four of the manufacturer defendants settled. The effect of the settlements on the sharing agreement is that the Company's maximum potential loss would be $1.0 million, regardless of the outcome of the lawsuits, plus possible legal fee expenses in excess of the Company's proportionate share of the $9.0 million reimbursement of such fees or any additional amounts to be paid by the manufacturer defendants.

In September 1998, a jury trial of this action commenced in Federal Court. On November 30, 1998, the Court granted all remaining defendants a directed verdict, dismissing all class claims against the Company and other defendants. On July 13, 1999, the Court of Appeals for the Seventh Circuit affirmed the dismissal of the Company and the other wholesaler defendants from the class action litigation. Plaintiffs petition for rehearing on this issue was denied on August 9, 1999. On November 5, 1999 plaintiffs filed a petition for writ of certiorari in the United States Supreme Court. Opposition is due January 19, 2000.

In addition to the above-mentioned Federal class action and state court actions, the Company and other wholesale defendants have been added as defendants in a series of related antitrust lawsuits brought by certain independent pharmacies who have opted out of the class action cases and by certain chain drug and grocery stores. After a successful motion by the Company and other wholesalers, the damage period in these cases has been limited to October 1993 to the present. These lawsuits are also covered by the sharing agreement described above. Plaintiffs in these suits have requested remand to various federal courts nationwide for purposes of trial. A decision on the remand motion is pending, and no trial dates have been set.

In November 1995, in the U.S. District Court, Northern District of Illinois, Abbott Laboratories ("Abbott") filed a complaint seeking damages of approximately $4.0 million against the Company and various affiliates for credits allegedly due in connection with the purchase and subsequent sale of Abbott products by the Company. In October 1998, Abbott amended its complaint to allege spoliation of evidence and to request punitive damages in excess of $30 million. The Company has filed various counterclaims and has asked for damages according to proof at trial. On October 19, 1999, Abbott and the Company (along with Bergen Brunswig Drug Company, Durr-Fillauer Medical, Inc., and Durr Drug Company, all affiliates of the Company) executed a Mutual Release of Claims and Settlement Agreement which required in exchange of general releases the Company to pay an immaterial sum to Abbott but also Abbott and the Company have agreed to future and mutually beneficial opportunities.

A United States federal investigation of Stadtlander with respect to possible violations of the Medicare provisions of the Social Security Act is being conducted. The activities under investigation predated the ownership of Stadtlander by Counsel Corporation, the entity that sold Stadtlander to the Company. The Company has been advised that while owned by Counsel Corporation, Stadtlander cooperated fully with the authorities investigating this matter.

Stadtlander has also been named as a defendant in legal proceedings commenced in the U.S. District Court, Northern District of Texas, Dallas Division, asserting, among other things, that by entering into a transaction with a third-party, Stadtlander interfered with the plaintiff's relationship with that third-party. This proceeding is in a preliminary stage. In addition, Stadtlander is a 49% equity owner of a limited liability company formed for the purpose, among other things, of operating a specialty pharmacy business to provide services to patients diagnosed with a serious mental illness. This limited liability company is governed by an operating agreement that contains, among other things, a covenant prohibiting the members from participating in certain competing activities. In April 1999, the other member of the limited liability company brought suit in California Superior Court, San Diego County, seeking, among other things, to enjoin the PharMerica merger and to recover general, special and punitive damages from the Company. The court refused to enjoin the merger; the plaintiff's demand for damages has not yet been resolved and is in the discovery stages. Counsel Corporation has agreed to provide certain indemnification to the Company with respect to the proceedings referred to in this paragraph and the immediately preceding paragraph.

In November 1998 and February 1999, two putative securities class actions were filed against PharMerica and certain individuals in the United States District Court for the Middle District of Florida. The proposed classes consist of all persons who purchased or acquired stock of PharMerica between January 7, 1998 and July 24, 1998. The complaints seek monetary damages but do not specify an amount. In general, the complaints allege that the defendants made material omissions by withholding from the market information related to the costs associated with certain acquisitions. The complaints allege claims under Section 10(b) and 20(a) of the Securities Exchange Act of 1934. A motion to dismiss both actions was filed on March 2, 1999, and the motion is currently under review.

PharMerica is also subject to investigations, claims and suits arising out of its institutional pharmacy business, including matters relating to the repayment of monies paid to PharMerica under Medicare or Medicaid. Prior to the acquisition of PharMerica by the Company, the United States Department of Health and Human Services ("HHS"), during the course of a Medicare Audit of various nursing homes, requested PharMerica to produce records related to intravenous pharmaceuticals provided to particular nursing homes in 1997 and 1998. PharMerica cooperated with the audit and complied with the request. Subsequently, PharMerica learned that HHS auditors alleged that during the 1997-98 time frame, certain nursing homes, primarily operating in Texas, improperly billed Medicare for intravenous pharmaceuticals and related services. The government has been made aware that PharMerica did not bill the Medicare program for the goods and services it sold to nursing homes. The government has not revealed the extent of any investigation that may be ongoing against PharMerica or entities that, unlike PharMerica, billed Medicare, or any legal basis upon which to seek reimbursement from PharMerica for overpayments the government alleges the Medicare program made to customers of PharMerica.

On or about March 2, 1999, the Company was served with a Summons and Complaint filed by the Office of the State's Attorney General on behalf of the People of the State of California alleging that the Company and twenty-two other defendants engaged in the manufacture, distribution and/or selling of coal tar products to consumers within the State of California and that these activities constituted a violation of California's Safe Drinking Water and Toxic Enforcement Act of 1986 and Unfair Competition Act. In addition, on or about March 20, 1999, the Company was served with a Summons and First Amended Complaint filed by Perry Gottesfeld alleging that the Company and sixteen other defendants engaged in various activities that violated the Acts cited by the State's Attorney General in the Complaint referenced above. The Company, through its counsel, has been in negotiations with both these plaintiffs. Responsive pleadings were filed in April 1999 and the parties are conducting discovery.

On or about March 5, 1999, the Company was notified that it was a possible potentially responsible party ("PRP") in connection with the Butterworth Landfill Superfund Site located in Grand Rapids, Michigan (the "Butterworth Site") and that the U.S. Environmental Protection Agency ("EPA") had entered into a Consent Decree with five principal PRPs (not including the Company) to spend $9.6 million on immediate responsive activities at the Butterworth Site, including remedial investigation and feasibility studies. In addition and pursuant to Section 107 of the CERCLA, the U.S. Department of Interior has asserted a claim for damages caused to natural resources ("NRD Liability"). The present value of the expected remedial action at the Butterworth Site over the next thirty (30) years is in excess of $20 million. The Company was offered a settlement by the EPA whereby the Company would pay approximately $53,000 (the "Settlement Amount") in exchange for statutory contribution protection and a covenant not to sue in a Court-entered decree. The Company has tendered the Settlement Amount. The decree is expected to be entered in calendar year 2000. At that time all EPA claims and NRD Liability against the Company will be released and any future contribution or cost recovery actions by other PRPs against the Company will be barred.

In addition to the Butterworth Site Claim, the EPA made a demand that the Company pay (by March 12, 1999), approximately $168,000 to settle the Company's alleged liability for waste material disposed of at the Casmalia Disposal Site in Santa Barbara County, California (the "Casmalia Site"). The present value of the expected remedial action at the Casmalia Site is $399 million. The EPA designated the Company a de minimis waste generator and offered what it termed a de minimis settlement. The Company declined the EPA's offer and believes that it may be afforded an opportunity to reduce its costs of settlement. Of course, there is no assurance that the Company will be successful in reducing its cost in settling this matter or that the EPA will continue to be interested in settling with the Company for the amount previously offered.

Although the amount of liability at September 30, 1999 with respect to the referenced proceedings in Section 1 above cannot be ascertained, in the opinion of the management, any resulting liability will not have a material adverse effect on the Company's consolidated financial position, results of operations or cash flows.

Section 2.

On October 14, 1999, the Company and certain of its subsidiaries commenced an action in the Los Angeles County Superior Court of the State of California against Counsel Corporation, Stadt Holdings, Inc., and certain of their officers and directors (the "Counsel defendants") in connection with the Company's acquisition of Stadtlander Drug Co., Inc. and its subsidiaries ("Stadtlander") on January 21, 1999. In the Counsel action, the Company alleges that the defendants devised and perpetrated a joint venture scheme with the common purpose of selling Stadtlander at a grossly inflated price. The Company contends that, by means of fraudulent adjusted journal entries and related misrepresentations and omissions, the Counsel defendants provided inaccurate financial statements and other false and misleading information to the Company in order to fraudulently induce it to consummate the Stadtlander acquisition for an excessive sales price.

In its complaint, the Company asserts causes of action against the defendants under California's securities and unfair competition laws, as well as common law and statutory claims for fraud. The Company requests the imposition of a constructive trust, an accounting, restitution and disgorgement of the defendants' ill-gotten profits and other damages, as well as other relief permitted under law, in addition to pre-judgment and post-judgment interest, costs and attorneys' fees.

Certain of the defendants have made a motion to compel arbitration of the Company's claims against them. The Company has opposed the defendants' motion. The hearing on the motion is scheduled in January 2000. Apart from that motion, no other motions have been filed or served by any party to date. No discovery has been commenced by any party to date. No status conference has been noticed or conducted to date. No trial date has been set.

The Company believes its claims against the Counsel defendants have substantial merit, and intends to prosecute its claims vigorously against the Counsel defendants. However, due to the incipient stage of the litigation, its ongoing status, and the necessary uncertainties involved in all litigation, the Company does not believe it is feasible at this time to assess the likely outcome of the litigation, the timing of its resolution, or its ultimate impact, if any, on the Company's financial condition, results of operations and cash flows.

Following the Company's October 14, 1999 announcement that it would not meet analysts' consensus earnings estimates for its fourth quarter and fiscal year ended September 30, 1999, due to, in part, lower than expected results at Stadtlander and PharMerica, and following the Company's disclosures, in its complaint against the Counsel defendants, reported by the press on October 15, 1999, regarding the accounting irregularities involved in the Stadtlander acquisition, 10 purported shareholder class action lawsuits were commenced against the Company and certain of its officers and directors in federal court in California (the "Bergen securities cases").

The Bergen securities cases are purportedly brought on behalf of a class of the Company's shareholders who purchased or otherwise acquired Bergen's common stock from March 16, 1999 through October 14, 1999, and were allegedly damaged thereby. Some of the cases include two further sub-classes of persons who purchased or otherwise acquired the Company's common stock in connection with its acquisition of its wholly-owned subsidiary, PharMerica, Inc. ("PharMerica"), and of persons who were holders of record of PharMerica stock as of March 12, 1999, and were thereby entitled to vote, pursuant to the Company's Proxy Statement/Prospectus issued in connection with the PharMerica merger. The purported classes in a few of the cases may also consist of persons who purchased or otherwise acquired Bergen securities from September 9, 1998, through October 14, 1999.

The Bergen securities cases assert, among other things, various similar claims under sections 11, 12 and 15 of the Securities Act 1933 and sections 10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934, and Rules 10b-5 and 14a-9 thereunder. In general, the Bergen securities cases allege that the Company and certain of its officers and directors made material omissions and unspecified misrepresentations in their PharMerica Proxy Statement/Prospectus, and in other public statements prior to October 14, 1999 (the end of the purported class period), by failing to disclose accounting irregularities and other fraudulent manipulations of Stadtlander's books and records which, they allege, would likely have had an material impact on the value of the Company's stock.

In addition to the Bergen securities cases, two separate lawsuits alleging violations of certain federal securities have been commenced in federal court in California, and another lawsuit has been commenced in federal court in Delaware, that name as defendants, along with the Company and certain of its officers and directors, Bergen Capital Trust I (the "Trust"), a wholly-owned subsidiary of the Company, as well as various investment banks (the "Trust securities cases").

The Trust securities cases are purportedly brought on behalf of a class of persons who purchased shares of the Trust's Preferred Securities pursuant to the May 26, 1999 offering of such securities, including, in two of the cases, persons who thereafter acquired any such Preferred Securities on the open market prior to October 14, 1999.

The Trust securities cases assert, among other things, claims under sections 11, 12 and 15 of the Securities Act of 1933, including, in two of the cases, among other things, claims under sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. In general, the Trust securities cases contend that the Trust and the Company failed to fulfill a purported duty to disclose in the Company's 1999 Registration Statement, and in related offering materials with respect to the issuance of the Trust's Preferred Securities, that the financial data provided by the Company was supposedly unreliable because Stadtlander was suffering from accounting irregularities as a result of the fraud of the Counsel defendants.

The Plaintiffs in the Bergen securities cases and the Trust securities cases seek damages in an unspecified amount, and/or rescission, as well as pre-judgment and post-judgment interest, costs and attorneys' fees. The plaintiffs in the Bergen securities cases have jointly moved to consolidate their cases into a single action in the Southern Division of the United States District Court for the Central District of California, and for appointment of "lead plaintiffs" in the United States District Court for the District of Delaware, under the Private Securities Litigation Reform Act of 1995. At this juncture, based upon current information, the Company anticipates that these motions will be granted, and that it will not be required to respond to any of the actions until after the filing of an amended consolidated complaint. No discovery has been commenced by any party to date. No status conferences have been noticed or conducted to date in any of the actions. No trial dates have been set in any of the actions.

The Company intends to vigorously defend against the claims asserted in the various purported shareholder class action lawsuits.

The proceedings referenced in Section 2 are in their early stages and little or no discovery has been completed. The Company does not believe it is currently feasible to predict or determine the outcome or resolution of these proceedings, or to estimate the amounts of, or potential range of, loss with respect to these proceedings.

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ITEM 4A.	EXECUTIVE OFFICERS OF THE REGISTRANT
	Identification of Executive Officers.

	The	Executive	officers	of	the	Company	are	elected by,	and serve at the
pleasure of, the Board of Directors. Each executive officer holds office until the next election of officers which is generally held in December, January or February of each year. The current executive officers of the Company, and their respective principal occupations and employment during the last five years ended September 30, 1999, are listed alphabetically as follows:

	Linda M. Burkett,	49,	Executive Vice President, Chief Information Officer
(since September 1996); Executive Vice President and Chief Information Officer, Bergen Brunswig Drug Company (since 1995); Vice President, IR Support Services (1992-1995).

	Charles J. Carpenter,	50,	President, PharMerica, Inc. (since April 1999);
Executive Vice President of the Company (since 1996); Chief Procurement Officer (1996-April 1999); Executive Vice President, Supplier Relations and Operations, Bergen Brunswig Drug Company (1995-1996); Executive Vice President, Northeast Region (1994-1995).

	Neil F. Dimick,	50,	Executive Vice President, Chief Financial Officer (since
1992); President, Bergen Brunswig Specialty Company (since September 1996). Mr. Dimick is also a member of the Board of Directors.

	William J. Elliott,	50,	Executive Vice President of the Company and President,
Bergen Brunswig Medical Corporation (since October 1996). Mr. Elliott resigned effective January 16, 2000.

	Brent R. Martini,	40,	Executive Vice President of the Company and
President, Bergen Brunswig Drug Company (since September 1996); Executive Vice President, Bergen Brunswig Drug Company, West Region (1994-1996). Brent R. Martini is the son of Robert E. Martini. Brent R. Martini is also a member of the Board of Directors (since December 1999).

	Robert E. Martini,	67,	Chairman of the Board (since 1992); interim Chief
Executive Officer (since November 1999); a consultant to the Company (since January 1997); Chief Executive Officer (1990-January 1997). Mr. Martini is also a member of the Board of Directors.

	Andrew P. McVay,	39,	Vice President and Controller of Bergen Brunswig Drug
Company (since July 1997); Controller, West Region, Bergen Brunswig Drug Company (1994-July 1997).

	Milan A. Sawdei,	53,	Secretary (since July 1992); Executive Vice President
(since April 1992); Chief Legal Officer (since 1989).

	Carol E. Scherman,	44,	Executive Vice President, Human Resources (since
September 1996); Executive Vice President, Human Resources (since 1994), Bergen Brunswig Drug Company; Vice President, Human Resources and Associate Relations (1993-1994).

	Eric J. Schmitt,	49,	Vice President, Finance and Treasurer (since February
1994); Vice President, Financial Planning (1989-1994).

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PART II

ITEM 5.	MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
	STOCKHOLDER MATTERS

For certain information regarding shares of the Company's Class A Common Stock ("Common Stock"), including cash dividends per share, market prices per share, stock market information and number of shareowners, see "Selected Quarterly Results (unaudited)" as set forth in Part II, Item 8, "Financial Statements and Supplementary Data," of this Annual Report.

On February 9, 1994, the Board adopted a Shareowner Rights Plan (which was amended and restated on December 17, 1999; see Exhibit 4(c)) which provides for the issuance of one Preferred Share Purchase Right (the "Rights") for each outstanding share of Common Stock. The Rights are generally not exercisable until 10 days after a person or group (an "Acquiror") acquires 15% of the Common Stock or announces a tender offer which could result in a person or group owning 15% or more of the Common Stock (an "Acquisition"). Each Right, should it become exercisable, will entitle the owner to buy 1/100^th of a share of a new series of the Company's Series A Junior Preferred Stock at an exercise price of $80.00.

In the event of an Acquisition without the approval of the Board, each Right will entitle the owner, other than an Acquiror, to buy at the Rights' then-current exercise price a number of shares of Common Stock with a market value equal to twice the exercise price. In addition, if, after an Acquisition, the Company were to be acquired by merger, shareowners with unexercised Rights could purchase common stock of the Acquiror with a value of twice the exercise price of the Rights. The Board may redeem the Rights for $0.01 per Right at any time prior to an Acquisition. Unless earlier redeemed, the Rights will expire on February 18, 2004.

During the year ended September 30, 1999, the Company issued shares of its Common Stock without registration under the Securities Act of 1933 (the "1933 Act") on two occasions. On December 31, 1998, in connection with its acquisition of Medical Initiatives, Inc. ("MII"), the Company issued approximately 200,000 shares of its Common Stock to the former shareowners of MII. On January 21, 1999, in connection with the acquisition of Stadtlander, the Company issued approximately 5.7 million shares of its Common Stock to the former shareowner of Stadtlander. Such issuances were exempt from registration under Section 4(2) of the 1933 Act. In each of these instances, the privately issued shares have been registered under the 1933 Act for resale by the former shareowners of the acquired businesses.

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ITEM 6. SELECTED FINANCIAL DATA

Dollars in thousands, except for per share amounts
				September 30,
Years Ended:					1999 (f)		1998 (f)		1997		1996		1995
Net sales and other revenues (a):
	Excluding bulk shipments to
		customers' warehouses		$	17,244,905	$	13,720,017	$	11,659,127	$	9,941,633	$	8,442,254
	Bulk shipments to customers'
		warehouses			4,000,633		3,401,651		2,837,646		2,476,110		2,355,094
		Total net sales and other
			revenues		21,245,538		17,121,668		14,496,773		12,417,743		10,797,348
Net earnings					70,573	(b)	3,102	(c)	81,679	(e)	73,533		63,942
Earnings per share - diluted					0.59	(b)	0.03	(c)	0.81	(e)	0.73		0.64
Cash dividends declared
	per Class A Common share				0.225		0.315	(d)	0.216		0.192		0.190
At Years Ended:
Total assets				$	5,535,421	$	3,003,212	$	2,707,123	$	2,489,826	$	2,405,530
Long-term obligations, net of
	current portion				1,041,983		464,778		437,956		419,275		557,771
Company-obligated mandatorily
	redeemable preferred
	securities of subsidiary trust
	holding solely subordinated
	notes of the Company				300,000		-		-		-		-
Shareowners' equity					1,495,490		629,064		644,861		578,966		519,349
(a)		Reclassified to include bulk shipments to customers' warehouses. For further information, see Note 1 of Notes to Consolidated Financial Statements.
(b)		Includes special provision for doubtful receivables of $32.5 million, net of income tax benefit of $21.2 million. Net earnings and diluted earnings per share excluding the special charge were $103.1 million and $0.87, respectively. See Item 7 of this Annual Report.
(c)		Includes special charges for writedown of goodwill of $87.3 million, no income tax effect; merger expenses of $8.6 million, net of income tax benefit of $6.0 million; abandonment of capitalized software of $3.1 million, net of income tax benefit of $2.2 million; and restructuring expenses of $1.8 million, net of income tax benefit of $1.2 million. Net earnings and diluted earnings per share excluding the special charges were $103.9 million and $1.01, respectively. See Item 7 of this Annual Report.
(d)		Includes $0.075 per share declared September 24, 1998 and paid December 1, 1998. See Item 7 of this Annual Report.
(e)		Includes special charges for merger expenses of $3.4 million, net of income tax benefit of $2.4 million, relating to the termination of the proposed IVAX merger. Net earnings and diluted earnings per share excluding the special charges were $85.1 million and $.84, respectively. See Item 7 of this Annual Report.
(f)		See Item 7 of this Annual Report for information regarding business acquisitions during these fiscal years.

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ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
	CONDITION AND RESULTS OF OPERATIONS
	RESULTS OF OPERATIONS

The Company's revenues have increased significantly during the past three years due to internal growth and acquisitions. However, net earnings and diluted earnings per share trends were negatively affected by special items in each of these years. The following table summarizes the Company's revenue and earnings during this period:

Dollars in millions, except for per share amounts
		Years Ended September 30,							% Change
			1999		1998		1997		1999		1998
Net sales and other revenues		$	21,245.5	$	17,121.7	$	14,496.8		24	%	18	%
Earnings excluding special items		$	103.1	$	103.9	$	85.1		(1	)%	22	%
Special items			(32.5	)	(100.8	)	(3.4	)
	Net earnings	$	70.6	$	3.1	$	81.7
Diluted earnings per share:
Earnings excluding special items		$	0.87	$	1.01	$	0.84		(14	)%	20	%
Special items			(0.28	)	(0.98	)	(0.03	)
	Net earnings	$	0.59	$	0.03	$	0.81

Special items represent charges or writedowns which management believes are either one-time occurrences or otherwise not related to ongoing operations, and are described under the caption "Special Items" below. Such items have been shown separately in order to facilitate analysis of the Company's operating trends.

Fiscal 1999 earnings and diluted earnings per share, excluding special items, declined 1% and 14%, respectively, in comparison with fiscal 1998. The slight decline in net earnings, despite higher revenues, principally relates to higher interest expense associated with the additional debt incurred or assumed in connection with certain acquisitions. Lower earnings per share principally reflects the effect of the Company's issuance of additional shares of Common Stock in connection with certain acquisitions.

The Company's operating results include the results of acquired entities during the past three years. Such acquisitions, which are described in more detail under the caption "Business Acquisitions" herein, are summarized as follows:

Acquisition Date	Acquired Entity	Segment
April 1999	PharMerica, Inc.	Pharmaceutical Services
February 1999	J.M. Blanco, Inc.	Pharmaceutical Distribution
January 1999	Stadtlander Operating Company, LLC	Pharmaceutical Services
December 1998	Medical Initiatives, Inc.	Pharmaceutical Distribution
September 1998	Ransdell Surgical, Inc.	Other Businesses
September 1998	Choice Systems, Inc.	Other Businesses
August 1998	The Lash Group, Inc.	Other Businesses
May 1998	Pacific Criticare, Inc.	Other Businesses
January 1998	Besse Medical Services, Inc.	Pharmaceutical Distribution

As described below, of the acquired entities, PharMerica and Stadtlander have had the most significant impact on the Company's results of operations. Each of the transactions listed above is reflected in the Company's consolidated financial statements only from the respective acquisition date.

Operating Earnings

The Company reported increases in operating earnings, excluding special items, of 21% and 23% in fiscal 1999 and 1998, respectively. The following table provides a summarized statement of operations on a consolidated basis, including key line item growth rates and ratios. PharMerica and Stadtlander, due to the nature of their pharmaceutical service businesses, have significantly higher gross margins and operating expense ratios than the Company's principal pharmaceutical distribution businesses. Accordingly, certain ratios in the table have also been shown excluding PharMerica and Stadtlander in order to present a more meaningful comparison with historical results.

			Years Ended September 30,							% Change
Dollars in millions				1999		1998		1997		1999		1998
Revenues excluding bulk shipments			$	17,244.9	$	13,720.0	$	11,659.1		26	%	18	%
Bulk shipments				4,000.6		3,401.7		2,837.7		18		20
	Total net sales and other revenues		$	21,245.5	$	17,121.7	$	14,496.8		24		18
Gross profit			$	1,099.5	$	750.3	$	654.4		47		15
Operating expenses excluding
	special items			837.7		534.2		479.4		57		11
Operating earnings before
	special items			261.8		216.1		175.0		21		23
Special items:
	Special receivables provision			53.7		-		-		-		-
	Special charges			-		110.2		5.8		-		-
	Operating earnings		$	208.1	$	105.9	$	169.2		97	%	(37	)%
Percentage of revenues excluding
	bulk shipments:
	Gross profit			6.38	%	5.47	%	5.61	%
	Operating expenses, excluding
		special items		4.86	%	3.89	%	4.11	%
	Operating earnings before
		special items		1.52	%	1.58	%	1.50	%
	Operating earnings			1.21	%	0.77	%	1.45	%
Percentage of revenues excluding
	PharMerica and Stadtlander
	in fiscal 1999:
	Gross profit			5.08	%	5.47	%	5.61	%
	Operating expenses, excluding
		special items		3.54	%	3.89	%	4.11	%
	Operating earnings before
		special items		1.54	%	1.58	%	1.50	%
	Operating earnings			1.54	%	0.77	%	1.45	%

Revenues excluding bulk shipments increased 26% and 18% in fiscal 1999 and 1998, respectively. Of the fiscal 1999 increase, 21% represented internal growth while 5% represented the effect of acquired entities. Virtually all of the fiscal 1998 increase was attributable to internal growth, with only a minor portion attributable to acquired entities.

Along with other companies in its industry, the Company reports bulk shipments of pharmaceuticals in revenues and cost of sales. Bulk shipment transactions are arranged by the Company with its suppliers at the express direction of the customer, and involve either shipments from the supplier directly to customers' warehouse sites or shipments from the supplier to Company warehouses for immediate shipment to customers' warehouse sites. Bulk sales of pharmaceuticals do not impact the Company's inventory since the Company simply processes the orders that it receives from its suppliers directly to the customers' warehouses. The Company serves as an intermediary by paying the supplier and billing the customer for the goods. Due to the insignificant margins generated through bulk shipments, fluctuations in such revenues have only an immaterial impact on the Company's operating earnings.

Gross profit as a percentage of revenues excluding bulk shipments ("gross margin") was 5.08%, 5.47% and 5.61% in fiscal 1999, 1998 and 1997, respectively, excluding the effect of PharMerica and Stadtlander. Of the fiscal 1999 decrease of 39 basis points, approximately 15 basis points represent the effect of LIFO reserve provisions. The remaining 24 basis point reduction in 1999 and the 14 basis point reduction in fiscal 1998 primarily reflect lower margins in the Pharmaceutical Distribution segment. Such margins declined mainly due to intense price competition within the industry as well as to a change in the sales mix, with a greater proportion of revenues coming from high-volume, low-margin customers. The favorable effect of inventory investment buying profits partially offset the aforementioned factors. Gross margins were also slightly lower in the Other Businesses segment, primarily due to a higher medical-surgical sales mix of lower-margin shipments to the acute care market.

In all of the Company's wholesale distribution businesses, it is customary to pass on manufacturers' price increases to customers. Investment buying enables distributors such as the Company to benefit by purchasing goods in advance of anticipated manufacturers' price increases. Consequently, the rate or frequency of future price increases by manufacturers, or the lack thereof, influences the profitability of the Company.

Management anticipates further downward pressure on gross margins in the distribution businesses in fiscal 2000 because of continued price competition influenced by high-volume customers. Management expects that these pressures may be offset to some extent by an increased sales mix of more profitable products and services and continued reduction of operating expenses as a percentage of revenues. However, no assurance can be given that such improved sales mix or expense reduction can be achieved since many of the factors that impact such results (e.g. the effect of group purchasing agreements, competitive inroads, market conditions, etc.) are outside the Company's control.

Operating expenses (excluding special items) include distribution, selling, general and administrative expenses ("DSG&A") and the provision for doubtful receivables. Excluding PharMerica and Stadtlander, operating expenses as a percentage of revenues excluding bulk shipments were 3.54%, 3.89% and 4.11% in fiscal 1999, 1998 and 1997, respectively. The significant reductions were primarily attributable to continued operating efficiencies and the spreading of fixed costs over a larger revenue base. The Company's distribution infrastructure has been able to process increasing volume without a proportionate increase in operating expenses. Also, the aforementioned shift in the distribution businesses' mix towards high-volume customers reduced the operating expense ratio because these customers are less costly to service.

Segment Information

Substantially all of the Company's growth in operating earnings has been contributed by the Pharmaceutical Distribution segment. Following is a summary of revenue and operating earnings for the Company's segments:

Dollars in millions
				Revenue Excluding Bulk Shipments							Growth Rate
Years Ended September 30,					1999		1998		1997		1999		1998
Pharmaceutical Distribution				$	15,902.7	$	12,936.3	$	10,906.4		23	%	19	%
Pharmaceutical Services					866.6		0.9		-
Other Businesses					892.7		781.3		751.5		14		4
Corporate					0.7		1.5		1.2
Intersegment Eliminations					(417.8	)	-		-
	Total			$	17,244.9	$	13,720.0	$	11,659.1		26	%	18	%
				Operating Earnings							Growth Rate
Years Ended September 30,					1999		1998		1997		1999		1998
FIFO basis, excluding special items:
	Pharmaceutical Distribution			$	326.0	$	264.1	$	198.2		23	%	33	%
	Pharmaceutical Services				0.6		(0.3	)	-		-		-
	Other Businesses				6.2		6.0		12.8		3		(53	)
	Corporate				(52.5	)	(58.6	)	(43.7	)	-		-
	Total, FIFO basis excluding
		special items			280.3		211.2		167.3		33	%	26	%
LIFO (charges) credits					(18.5	)	4.9		7.7
Special items					(53.7	)	(110.2	)	(5.8	)
	Total, LIFO basis including
		special items		$	208.1	$	105.9	$	169.2		97	%	(37	)%
Operating earnings as a
	percentage of revenue
	excluding bulk shipments:
		Pharmaceutical Distribution			2.05	%	2.04	%	1.82	%
		Pharmaceutical Services			0.07	%	(33.33	)%	-	%
		Other Businesses			0.69	%	0.77	%	1.70	%
		Total, FIFO basis excluding
			special items		1.63	%	1.54	%	1.43	%
		Total, LIFO basis including
			special items		1.21	%	0.77	%	1.45	%

Pharmaceutical Distribution:

Revenues increased 23% and 19% in fiscal 1999 and 1998, respectively, substantially all of which represented internal growth (only 1% resulted from acquisitions). BBDC's revenue increased 21% and 16%, respectively, reflecting increased volume across all geographic regions and major customer categories. ASD's revenues increased 68% and 105%, respectively, representing continued growth in all of its specialty product markets. These increases were comprised of higher shipments to existing BBDC and ASD customers as well as to a significant number of new customers. National industry economic conditions were also favorable, with increases in prescription drug usage and higher pharmaceutical prices contributing to this segment's revenue growth.

Operating earnings have grown at a rate equal to or higher than revenues, with increases of 23% and 33% in fiscal 1999 and 1998, respectively. As a percentage of revenues, operating income was 2.05%, 2.04% and 1.82% in fiscal 1999, 1998 and 1997, respectively. During the past two years, this segment has been able to achieve operating expense efficiencies which have offset or exceeded the reductions in gross margins it has experienced (see "Operating Earnings" section above).

Pharmaceutical Services:

Substantially all of the revenue growth in fiscal 1999 represented sales by PharMerica ($475.3 million) and Stadtlander ($383.1 million) since their acquisition dates in late April 1999 and late January 1999, respectively. The only other activity in this segment was related to a small mail service entity. The Pharmaceutical Services segment operated at just above the breakeven level, excluding special items, in fiscal 1999, with PharMerica reporting a profit and Stadtlander reporting a loss.

PharMerica's operations have been adversely affected by negative industry trends resulting from dramatically lower reimbursement to nursing homes for Medicare patients under the Prospective Payment System ("PPS"). The adverse effects of PPS included (1) lower occupancy by Medicare-funded patients at nursing facilities serviced by PharMerica, (2) significantly diminished acuity levels among residents of these facilities, which reduced the overall utilization of drugs, and (3) increased customer pricing pressure, thereby reducing PharMerica's gross margins. While the Company did see some stabilization of these trends in the fourth quarter, management expects that they will continue to affect PharMerica throughout fiscal 2000. Management has taken steps designed to improve PharMerica's earnings, including (1) enabling PharMerica to participate in the Company's generic purchasing programs in order to reduce drug costs, (2) consolidation of pharmacies to streamline operations, (3) outsourcing of delivery services, (4) strengthening of billing and collections management and (5) conversion of PharMerica's long-term care pharmacies to a common proprietary AS400 computer system.

Stadtlander has shown revenue growth from its pre-acquisition period in all of its major markets. However, it reported an operating loss primarily due to unexpectedly-high bad debt provisions and lower-than-expected gross margins. Stadtlander has taken steps designed to improve receivables collection going forward; for example, Stadtlander has implemented new accounts receivable software, strengthened its billing controls, outsourced certain collection activities, and engaged The Lash Group to assist in obtaining reimbursement sources for indigent patients. Although no assurances can be given, management anticipates that days sales outstanding and bad debt losses will be lower by the end of fiscal 2000. In response to lower-than-expected gross margins, Stadtlander is taking several steps designed to improve earnings, including consolidation of branches to streamline operations, reengineering of business processes and seeking better contractual relationships in the marketplace through its relationships with payors and pharmaceutical companies.

For further information regarding Stadtlander and PharMerica, see "Special Items" below.

Other Businesses:

Revenue increased 14% and 4% in fiscal 1999 and 1998, respectively, principally related to a higher volume of medical-surgical shipments. In fiscal 1999, acquired entities provided 10% of the segment's increase while internal growth accounted for the remaining 4%. In fiscal 1998, the effect of acquired entities comprised only 1% of the increase, with internal growth contributing the remaining 3%.

Operating earnings increased 3% in fiscal 1999 after declining 53% in fiscal 1998. The increase in fiscal 1999 primarily reflects improved profitability of the BBMC medical-surgical business due to higher revenue, operating expense efficiencies resulting from a restructuring program, and lower intangibles amortization. Partially offsetting these favorable factors were operating losses at ICS and Choice, which are still considered to be in a start-up phase. The significant decline in operating earnings in fiscal 1998 primarily reflected an unexpected slowdown in revenues and gross margin at BBMC, prior to the implementation of the restructuring program.

Corporate:

Corporate expenses decreased $6.1 million in fiscal 1999 and increased $14.9 million in fiscal 1998. These fluctuations primarily reflect changes in incentive compensation under the Company's bonus plans.

LIFO (Charges) Credits:

The Company principally manages its operations on a FIFO (first-in, first-out) basis, in which inventories are valued at the most recent purchase costs. For external financial reporting purposes, however, the Company uses the LIFO (last-in, first-out) method, whereby cost of sales is calculated at the most recent purchase costs and inventory is valued at the earlier purchase costs. Due to a history of generally-rising prices, FIFO inventory is higher than LIFO inventory, and a LIFO reserve is maintained to adjust FIFO inventories to LIFO at year-end. The LIFO provision represents the non-cash earnings effect of adjusting the LIFO reserve during the year. The fiscal 1999 LIFO provision was unfavorably affected by the timing of manufacturers' price increases and the unavailability of certain inventory items to the Company.

Special Items:

Following is a summary of special items during the past three years and their effect on net earnings and earnings per share:

Dollars in millions, except per share amounts
			Years Ended September 30,
Segment		Description		1999			1998			1997
Pharmaceutical Services		Receivables provision	$	(53.7	)	$	-	$		-
Other Businesses		Goodwill writedown		-			(87.3	)		-
Other Businesses		Restructuring expenses		-			(3.0	)		-
Corporate		Abandoned capitalized software		-			(5.3	)		-
Corporate		Merger-related expenses		-			(14.6	)		(5.8	)
	Total special items			(53.7	)		(110.2	)		(5.8	)
Tax effect of special items				21.2			9.4			2.4
	Effect on net earnings		$	(32.5	)	$	(100.8	)	$	(3.4	)
	Effect on diluted earnings per share		$	(0.28	)	$	(0.98	)	$	(0.03	)

During fiscal 1999, the Company recorded a special receivables provision of $53.7 million consisting of additions to the allowance for doubtful accounts of $46.0 million and $7.7 million at PharMerica and Stadtlander, respectively, principally related to pre-acquisition receivables and the adverse effect of Medicare PPS on PharMerica's customer base.

During fiscal 1998, the Company recorded a non-cash charge of $87.3 million for the writedown of BBMC goodwill related to certain acquisitions made prior to September 1995, resulting from a realized impairment to the carrying value of BBMC's long-lived assets. The Company also recorded a $3.0 million charge for BBMC restructuring expenses, which represented severance costs associated with streamlining and refocusing the sales organization and costs associated with the consolidations of four divisions to improve efficiency and customer service. Other special charges included $5.3 million for the abandonment of capitalized software and $14.6 million related primarily to the proposed merger with Cardinal Health, Inc. ("Cardinal"), which was terminated on August 7, 1998.

During fiscal 1997, the Company reported a $5.8 million charge for expenses related to the proposed merger with IVAX Corporation, which was terminated on March 20, 1997.

All of the aforementioned special items have a current or deferred tax benefit except for the goodwill writedown.

Interest Expense and Distributions on Preferred Securities

The Company's financing expenses are comprised of two line items on the statements of consolidated earnings:

Dollars in millions
		Years Ended September 30,
			1999		1998		1997
Net interest expense (pre-tax)		$	74.1	$	40.0	$	30.8
Distributions on preferred securities of subsidiary
	trust ($8.1 pre-tax less $3.2 tax benefit)	$	4.9	$	-	$	-

Total financing expenses were $82.2 million in fiscal 1999, including net interest expense of $74.1 million and $8.1 million of pre-tax distributions on the Company's Preferred Securities, representing an increase of $42.2 million, or 106%, over the prior year. This increase was primarily due to higher borrowings under the Company's bank credit agreements, new borrowings under a commercial paper program, debt assumed in connection with acquisitions, and the issuance of the Preferred Securities.

The fiscal 1998 increase of $9.2 million, or 30%, over fiscal 1997 resulted from increased borrowings under the Company's bank credit agreements.

In fiscal 1999, a significant portion of the higher borrowings was related to the financing of the purchase price of acquired entities and the assumption of the debt of those entities. In both fiscal 1999 and 1998, borrowing increased to fund higher investments in inventory in order to (a) support the significant growth in the Company's revenues, and (b) to take advantage of increased investment buying opportunities.

Taxes on Income

Taxes on income, excluding the tax benefit on distributions of Company's Preferred Securities, were 43.7%, 95.3% and 41.0% of pre-tax earnings in fiscal 1999, 1998 and 1997, respectively. The unusually high fiscal 1998 rate reflects the nondeductible writedown of goodwill described under "Special Items" above; excluding the writedown, the effective tax rate would have been 41.0%. The 2.7% increase in the effective rate in fiscal 1999 is mainly attributable to the additional nondeductible goodwill amortization associated with PharMerica, J.M. Blanco and certain other acquired entities. All of the goodwill amortization of Stadtlander is tax-deductible.

Earnings per Share

Earnings per share fluctuations normally result primarily from changes in the Company's net earnings. However, in fiscal 1999, diluted earnings per share were impacted by a 16% increase in the weighted average number of common shares outstanding, to 119.1 million shares from 102.6 million shares in fiscal 1998. The increase was primarily related to the issuance of 24.7 million shares in connection with the acquisition of PharMerica in April 1999 and the issuance of 5.7 million shares in connection with the acquisition of Stadtlander in January 1999. There were 134.2 million shares of the Company's common stock outstanding at September 30, 1999.

LIQUIDITY AND CAPITAL RESOURCES

Following is a summary of the Company's capitalization at the end of the last three fiscal years. Except that debt is net of cash herein, these percentages are calculated in accordance with the covenants set forth in the Company's Credit Agreement and Credit Facility, in which certain non-cash charges are excluded from the calculation:

	September 30,
	1999	1998	1997
Debt, net of cash	43%	34%	36%
Equity, including the Preferred Securities	57%	57%	61%

The increase in the debt percentage is mainly due to an increase in borrowings, including those under bank credit agreements, discretionary bank lines and commercial paper agreements, as well as debt assumed in connection with acquisitions. These increases were partially offset by increases in equity resulting from the issuance of shares of the Company's common stock in connection with acquisitions, the issuance of the Preferred Securities, and the Company's net earnings.

The Company currently has $1.0 billion of available credit under committed revolving bank credit lines, consisting of a $400 million senior credit agreement (the "Credit Agreement") and a $600 million senior credit facility (the "Credit Facility"). The Credit Agreement and the Credit Facility rank on a parity with each other. The Credit Agreement with a group of domestic and foreign banks is effective through March 2001 and allows additional borrowings under discretionary lines outside the Credit Agreement. The Credit Facility with a group of banks was initiated in April 1999 and expires in April 2000. The Company expects to renew the Credit Facility for another 364-day period and will begin the related discussions with its bank group in January 2000.

Also in April 1999, the Company entered into a series of commercial paper agreements (the "Commercial Paper Agreements") with a group of commercial paper dealers which provides for the private placement of short-term commercial paper notes of the Company up to a maximum of $1.0 billion outstanding. The Commercial Paper Agreements allow maturities of up to 364 days from the date of issue and are backed by the Credit Agreement and Senior Credit Facility. The amount of credit available under the Credit Agreement and Credit Facility are reduced dollar-for-dollar by the amount outstanding under the Commercial Paper Agreements.

Outstanding borrowings under the aforementioned agreements at September 30, 1999 totaled $942.6 million, consisting of $249.7 million under the Credit Agreement and discretionary lines and $692.9 million under the Commercial Paper Agreements.

On May 26, 1999, the Company's Bergen Capital Trust (the "Trust") issued 12,000,000 shares of its Preferred Securities at $25 per security. The proceeds of such issuances were invested by the Trust in $300 million aggregate principal amount of the Company's Subordinated Notes. The Company used the net proceeds from this investment for general corporate purposes, principally retirement of a portion of its outstanding debt. The Subordinated Notes represent the sole assets of the Trust and bear interest at the rate of 7.80%, payable quarterly, and are redeemable by the Company beginning in May 2004 at 100% of the principal amount thereof. The obligations of the Trust related to the Preferred Securities are guaranteed by the Company.

The Company's 1996 Registration Statement, which became effective on March 27, 1996, allows the Company to sell senior and subordinated debt or equity securities to the public from time to time up to an aggregate maximum principal amount of $400 million.

See Notes 2 and 3 of the accompanying Notes to Consolidated Financial Statements for further information regarding the Credit Agreement, the Credit Facility, the Commercial Paper Agreements, the Preferred Securities and the 1996 Registration Statement.

In December 1999, the Company's Credit Agreement and Credit Facility were amended to, among other things, (a) allow the Company or any of its subsidiaries to sell, transfer or convey certain trade receivables which would result in aggregate proceeds not to exceed $400 million, and (b) modify certain financial covenants.

On December 17, 1999, the Company entered into an asset securitization program with a bank which provides additional borrowing capacity for the Company (the "Asset Securitization Program"). The initial funded amount is $200 million, which the Company is working to increase to $300 million in the second quarter of fiscal 2000. Through the Asset Securitization Program, the Company's Bergen Brunswig Drug Company subsidiary will sell, on an ongoing basis, accounts receivable generated by certain of its divisions to a special purpose subsidiary. That special purpose subsidiary will, in turn, sell such receivables to banking institutions.

On September 24, 1998, the Company declared a 2-for-1 stock split on the Company's Common Stock , which was paid on December 1, 1998 to shareowners of record on November 2, 1998. All share and per share amounts presented herein have been restated to reflect the effect of this stock split.

Cash dividends declared on Common Stock amounted to $.225, $.315 and $.216 per share in fiscal 1999, 1998 and 1997, respectively. The fiscal 1998 amount includes a $.075 per share quarterly dividend which was declared on September 24, 1998 but not paid until December 1, 1998 to shareholders of record on November 2, 1998. The $.075 dividend constituted the Company's fiscal 1999 first quarter dividend; the declaration was made earlier than usual to coincide with the announcement of the aforementioned 2-for-1 stock split. Had the timing of the declaration been made in the usual manner, dividends for fiscal 1999 and 1998 would have been $.300 and $.240, respectively. On November 4, 1999, the Company declared a regular quarterly cash dividend of $.075 per share, payable on December 1, 1999 to shareowners of record on November 16, 1999. Although the Company does not have a policy requiring the payment of any specified levels of dividends, the Company's historical dividends have averaged approximately 28% of net earnings before special items for the three-year period ended September 30, 1999.

The Company's cash flows during the past three years are summarized in the following table:

Dollars in millions
		Years Ended September 30,
			1999			1998			1997
Net earnings excluding non-cash charges		$	237.2		$	191.0		$	146.8
Increases in operating assets and liabilities			(519.4	)		(120.8	)		(72.4	)
	Cash flows from operations		(282.2	)		70.2			74.4
Property acquisitions			(57.1	)		(29.8	)		(23.8	)
Acquisition of businesses, less cash acquired			(248.4	)		(22.6	)		-
Proceeds of debt and trust preferred securities			1,062.4			30.0			20.0
Repayment of debt and other obligations			(409.7	)		(2.5	)		(4.0	)
Cash dividends			(36.0	)		(24.2	)		(21.7	)
Other - net			8.4			3.4			(11.8	)
	Net increase in cash and cash equivalents	$	37.4		$	24.5		$	33.1

During fiscal 1999, the Company borrowed significantly more funds than in prior years, primarily in order to finance the cash portion of the purchase price of the Stadtlander and J.M. Blanco acquisitions, to pay off debt assumed with those acquisitions and the PharMerica acquisition, and to fund working capital requirements to support the Company's growing operations. The large negative cash flow from operations in fiscal 1999 is primarily associated with the Pharmaceutical Distribution segment, which had higher receivables and inventory in connection with higher sales levels. In addition, the timing of the related payments for inventory purchases was such that there was a relatively small benefit from accounts payable.

The Company believes that internally-generated cash flows, funds available under the Credit Agreement, the Credit Facility, the Commercial Paper Agreements, the Asset Securitization Program, and funds potentially available in the private and public capital markets will be sufficient to meet anticipated cash and capital requirements. However, actual results could differ from this forward- looking statement as a result of unanticipated capital requirements or an inability to access the capital markets on acceptable terms when, and if, necessary. Such access to the capital markets may be more difficult or expensive in the future due to the downgrading of the Company's debt ratings in November and December 1999.

Working capital increased to $770.0 million at September 30, 1999 from $591.4 million at September 30, 1998. The increase primarily reflects higher receivables and inventory balances supporting significant revenue growth as well as acquired entities. The current ratio decreased slightly to 1.29 at September 30, 1999 from 1.31 at September 30, 1998. Trade receivables outstanding, net of customer credit balances, were 21 days during fiscal 1999 and 16 days during fiscal 1998; substantially all of the increase was due to PharMerica and Stadtlander which, due to the nature of their customers, have a significantly longer receivables collection cycle than the Company's distribution operations. The inventory turnover rate on FIFO basis was 7.3 times during fiscal 1999 and 7.2 times during fiscal 1998.

Property acquisitions relate principally to improvements at several new warehouse and office locations, warehouse and pharmacy equipment, and data processing equipment.

BUSINESS ACQUISITIONS

On April 26, 1999, the Company acquired PharMerica, one of the nation's largest providers of pharmaceutical products and pharmacy management services to long-term care and alternate site settings, headquartered in Tampa, Florida. The Company issued approximately 24.7 million shares of Common Stock valued at approximately $670 million, acquired net assets (excluding debt) at fair value of approximately $307 million, assumed debt of approximately $600 million and incurred costs of approximately $10 million. The Company recorded goodwill of approximately $973 million in the transaction.

On February 10, 1999, the Company acquired J.M. Blanco, Puerto Rico's largest pharmaceutical distributor, headquartered in Guaynabo, Puerto Rico, for a cash purchase price of approximately $30 million. The Company acquired net assets (excluding debt) at fair value of approximately $24 million, assumed debt of approximately $22 million and incurred costs of approximately $1 million. The Company recorded goodwill of approximately $29 million in the transaction.

On January 21, 1999, the Company acquired Stadtlander, a national leader in disease-specific pharmaceutical care delivery for transplant, HIV, infertility and serious mental illness patient populations and a leading provider of pharmaceutical care to the privatized corrections market, headquartered in Pittsburgh, Pennsylvania. The Company paid approximately $195 million in cash and issued approximately 5.7 million shares of Common Stock, previously held as Treasury shares, valued at approximately $140 million. The Company acquired net assets (excluding debt) at fair value of approximately $40 million, assumed debt of approximately $100 million and incurred costs of approximately $10 million. The Company recorded goodwill of approximately $405 million in the transaction.

On December 31, 1998, the Company acquired Medical Initiatives, Inc. ("MII"), a pre-filler of pharmaceuticals for oncology centers, located in Tampa, Florida. The Company issued approximately 200,000 shares of Common Stock, previously held as Treasury shares, valued at approximately $6.0 million, acquired net assets at fair value of approximately $0.1 million and incurred costs of $0.2 million. The Company recorded goodwill of approximately $6.1 million in the transaction.

Each of the aforementioned acquisitions was accounted for as a purchase for financial reporting purposes. The Company is in disagreement with the seller and the seller's independent auditors regarding the valuation of the net assets of Stadtlander. See Part I, Item 3 entitled "Legal Proceedings."

On September 30, 1998, the Company acquired Ransdell Surgical, Inc. ("Ransdell"), a privately-held medical-surgical supply distributor, and its affiliate, Choice Systems, Inc. ("Choice"), a developer of supply channel management software for the healthcare industry, headquartered in Louisville, Kentucky. These acquisitions were accounted for as poolings of interests for financial reporting purposes. The Company issued approximately 716,000 shares of its Common Stock to the Ransdell and Choice shareowners.

On August 31, 1998, the Company acquired The Lash Group, Inc. ("Lash"), a privately-held healthcare reimbursement consulting firm headquartered in Washington, D.C. This acquisition was accounted for as a pooling of interests for financial reporting purposes and the Company issued approximately 980,000 shares of its Common Stock to the Lash shareowners.

The impact of the Ransdell, Choice and Lash acquisitions, on a historical basis, is not significant. Accordingly, prior period historical financial statements were not restated for these acquisitions. The above acquired entities' financial results are included in the consolidated financial results of the Company since their respective acquisition dates. The aggregate merger expenses incurred related to these acquisitions were not material.

On May 12, 1998, the Company completed the acquisition of Pacific Criticare, Inc. ("Pacific Criticare"), a privately-held distributor of medical-surgical products located in Waipahu, Hawaii for a cash purchase price of $4.0 million. The Company acquired assets at fair value of approximately $2.1 million, assumed liabilities of approximately $1.7 million and incurred costs of $.3 million. The Company recorded goodwill of approximately $3.9 million in the transaction. This acquisition was accounted for as a purchase for financial reporting purposes.

On January 2, 1998, the Company completed the acquisition of substantially all of the net assets of Besse Medical Services ("Besse"), Inc., a privately-held distributor of injectables, diagnostics and medical supplies located in Cincinnati, Ohio, for a cash purchase price of $22.2 million. The Company acquired assets at fair value of approximately $11.5 million, assumed liabilities of approximately $6.7 million and incurred costs of $.4 million. The Company recorded goodwill of approximately $17.8 million in the transaction. This acquisition was accounted for as a purchase for financial reporting purposes.

TERMINATED MERGER

On August 23, 1997, the Company signed a definitive merger agreement with Cardinal, a distributor of pharmaceuticals and a provider of value-added pharmaceutical-related services, headquartered in Dublin, Ohio. The merger agreement called for the Company to become a wholly-owned subsidiary of Cardinal and for shareowners of the Company to receive Cardinal Common Shares in exchange for shares of the Company's Common Stock. On July 31, 1998, the United States District Court for the District of Columbia granted the Federal Trade Commission's request for a preliminary injunction to halt the proposed merger. On August 7, 1998, the Company and Cardinal jointly terminated the merger agreement. As mentioned under "Special Charges" above, the Company recorded approximately $14 million in pre-tax charges during fiscal 1998 relating to legal fees and other expenses incurred in connection with the terminated merger, net of a $7 million reimbursement received from Cardinal.

YEAR 2000 READINESS DISCLOSURE

The Year 2000 problem results from computer programs and devices which do not differentiate between the year 1900 and the year 2000 because they were written using two digits rather than four to define the applicable year; accordingly, computer systems that have date-sensitive calculations may not properly recognize the year 2000. This situation may cause systems to process critical financial and operational information incorrectly or not at all, which would result in significant disruptions of the Company's business activities.

Since the Company relies heavily on computer technology throughout its businesses to effectively carry out its day-to-day operations, it has made resolution of the Year 2000 problem a major corporate initiative. In October 1996, the Company established a central office to direct its company wide Year 2000 efforts for all of its businesses, including BBDC, BBMC, ASD and other subsidiaries. A steering committee comprised of several executive officers provides top-level oversight for the program. Both internal and external resources have been used to identify, correct and test the Company's systems for Year 2000 compliance.

The Company's Year 2000 program addressed both information technology ("IT") and non-IT systems. The Company's business applications reside on mainframe, midrange and desktop computer systems. The Company's IT infrastructure is comprised of hardware, internally-developed software, and software purchased from external vendors. The Company's non-IT systems include equipment which uses date-sensitive embedded technology. Principal non-IT systems include telecommunications equipment, automated warehouse equipment, and hand-held order entry devices which the Company has provided to its customers.

The Company has divided its Year 2000 program by business unit and functional area into numerous individual projects in order to provide detailed management for each at-risk system. The Company's approach has been to address each Year 2000 project in the following phases: inventory, assessment, planning, renovation, testing and internal certification. For BBDC, all systems have now been tested and internally certified as Year 2000 compliant. In addition, BBDC performed comprehensive enterprise integration testing of all major IT systems, including order fulfillment, procurement, financial services and accounting.

BBMC and ASD are comprised of a number of entities acquired during the last several years. Although some of the computer systems within these entities were Year 2000 complaint, certain significant computer systems were not Year 2000 compliant. Certain of the non-compliant systems were remediated for Year 2000 compliance while the remainder were replaced with Year 2000 compliant systems. All of BBMC's and ASD's systems have now been tested and internally certified as Year 2000 compliant.

PharMerica, which was acquired on April 26, 1999, had also centralized its Year 2000 readiness efforts under an executive steering committee and a project management team prior to the acquisition, similar to the approach used by the Company. All dispensing, financial and other systems have now been internally certified as Year 2000 compliant.

Stadtlander, which was acquired on January 21, 1999, has also completed its Year 2000 remediation efforts and all of its systems have been internally certified as Year 2000 compliant. Of particular significance is its new billing and receivables software system, which was installed in November 1999 and has significantly improved functionality over the previous system, which was not Year 2000 compliant.

The Company also recognizes that it would be at risk if its suppliers, customers, banks, utilities, transportation companies and other business partners fail to properly remediate their Year 2000 systems and software. Accordingly, the Company has communicated with such entities through questionnaires and other means in order to assess the status of their remediation efforts. The Company has met with major business partners to discuss progress and contingencies, conduct on-site assessments, and test critical electronic interfaces. Although the Company is not aware of any significant Year 2000 problems with any of these third parties, there can be no assurances that their systems or software will be remediated in a timely manner, or that a remediation failure would not have a material adverse effect on the Company's financial position, results of operations, or cash flows.

The Company is also subject to risk should government or private payors and insurers fail to become Year 2000 compliant and therefore be unable to make full or timely reimbursement to the Company's customers. Such a situation could have a material adverse affect on the Company's cash flows by reducing the ability of customers to pay for products purchased from the Company. In particular, any Medicaid or Medicare failures would have a significant impact on PharMerica and Stadtlander, which directly or indirectly derive a significant portion of their revenues from these state and federal government payors.

The Company has charged the cost of its Year 2000 program to expense as incurred, except for purchases of computer hardware and other equipment, which have been capitalized as property and depreciated over the equipment's estimated useful lives in accordance with the Company's normal accounting policies. Through September 30, 1999, the Company's cumulative Year 2000 costs amounted to approximately $18.0 million (including $5.0 million of capital expenditures). The Company's remaining costs are expected to be approximately $1.6 million (including $0.4 million of capital expenditures). The aforementioned amounts exclude (1) the costs associated with new systems installed primarily to integrate operations and achieve additional information technology functionality and (2) the costs associated with the remediation efforts of PharMerica and Stadtlander. From the respective acquisition dates through September 30, 1999, the aggregate Year 2000 costs of PharMerica and Stadtlander amounted to approximately $3.2 million (including $1.2 million of capital expenditures). The remaining costs of PharMerica and Stadtlander are expected to be approximately $1.1 million (including $0.3 million of capital expenditures).

The Year 2000 remediation effort has not had a material impact on the Company's daily operations or the development of its information technology systems. Although the aforementioned cost estimates reflect management's best judgment using current information and assumptions about the future, actual costs could vary significantly from the Company's estimates due to technological difficulties, the noncompliance of IT vendors or other third parties, and by entities that communicate with the Company, and other factors.

While the Company is not presently aware of any significant exposure due to its systems and software not having been properly remediated, there can be no assurances that all Year 2000 remediation processes will be successful or that the contingency plans described below will sufficiently mitigate the risk of a Year 2000 compliance problem. If Year 2000 remediation efforts by the Company or third parties are unsuccessful, there could be a significant disruption of the Company's business operations, which could have a material adverse effect on the Company's financial position, results of operations, or cash flows.

The Company has identified major potential failure points and the related adverse consequences associated with them. For such risks, the Company has developed contingency plans for conducting its business until the problems can be corrected. For example, such plans include alternative electronic and manual means of receiving, processing and shipping customer orders, purchasing inventory from suppliers, and sending and receiving cash payments.

The foregoing discussion concerning the Year 2000 problem contains forward-looking statements that involve risks and uncertainties (referred to above) that could cause actual results to differ materially from such statements. Although the Company believes that minimal business disruption will occur as a result of Year 2000 issues, there is no assurance that all Year 2000 problems will be successfully remediated by the Company or third parties and that any such failures will not have a material adverse impact on the Company's financial position, results of operations or cash flows.

NEW ACCOUNTING PRONOUNCEMENTS

In fiscal 2001, the Company plans to adopt a new accounting pronouncement issued by The Financial Accounting Standards Board. This pronouncement is not expected to have a significant impact on the Company's reported financial position or results of operations. See Note 1 of the accompanying Notes to Consolidated Financial Statements for further information.

[ COVER ] | [ TABLE OF CONTENTS ]

ITEM 7a.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
	MARKET RISK

The Company's most significant "market risk" exposure is the effect of changing interest rates. The Company manages its interest expense by using a combination of fixed and variable-rate debt. At September 30, 1999, the Company's debt consisted of approximately $595.3 million of fixed-rate debt with a weighted average interest rate of 7.88% and $942.6 million of variable-rate debt (consisting of borrowings under the bank Credit Agreement and discretionary lines and Commercial Paper Agreements) with a weighted average interest rate of 5.79%. The amount of the variable-rate debt fluctuates during the year based on the Company's cash requirements; the amount borrowed at September 30, 1999 represented the maximum borrowings at any quarter end during fiscal 1999. If interest rates on such variable debt were to increase by 58 basis points (one-tenth of the rate at September 30, 1999), the net impact on the Company's pre-tax earnings would be approximately $5.0 million.

The Company also believes that its interest rate exposure may be somewhat mitigated due to the favorable effect which inflation may have on the Company, specifically, manufacturers' price inflation which may accelerate concurrent with a general increase in interest rates, to the extent the Company can take advantage of such inflation in purchasing and selling inventory.

[ COVER ] | [ TABLE OF CONTENTS ]

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

a. Supplementary Data

SELECTED QUARTERLY RESULTS (unaudited) Dollars in thousands, except for per share amounts
				Year Ended September 30, 1999
					First		Second		Third		Fourth		Fiscal
					Quarter		Quarter		Quarter		Quarter		Year
Net sales and other revenues:
	Excluding bulk shipments to
		customers' warehouses		$	3,960,106	$	4,301,945	$	4,454,888	$	4,527,966	$	17,244,905
	Bulk shipments to
		customers' warehouses			1,060,212		706,516		1,048,430		1,185,475		4,000,633
		Total net sales and
			other revenues		5,020,318		5,008,461		5,503,318		5,713,441		21,245,538
Gross profit					198,628		253,637		326,489		320,773		1,099,527
Net earnings (loss)					27,883		38,442		32,785		(28,537	)(a)	70,573
Earnings (loss) per share -
	diluted (b)				0.27		0.35		0.26		(0.21	)(a)	0.59
Cash dividends declared per
	Class A Common share				-	(e)	0.075		0.075		0.075		0.225
Market prices per Class A
	Common share			$	35-21 1/16	$	37 3/4 -19 15/16	$	25 5/8-14 3/8	$	17 1/4-9 7/8	$	37 3/4 -9 7/8
				Year Ended September 30, 1998
					First		Second		Third		Fourth		Fiscal
					Quarter		Quarter		Quarter		Quarter		Year
Net sales and other revenues:
	Excluding bulk shipments to
		customers' warehouses:		$	3,168,431	$	3,372,236	$	3,513,184	$	3,666,166	$	13,720,017
	Bulk shipments to
		customers' warehouses			727,744		748,947		946,420		978,540		3,401,651
		Total net sales and
			other revenues		3,896,175		4,121,183		4,459,604		4,644,706		17,121,668
Gross profit					170,671		190,800		188,983		199,811		750,265
Net earnings (loss)					21,337		18,808	(c)	27,180		(64,223	) (d)	3,102
Earnings (loss) per share -
	diluted (b)				0.21		0.18	(c)	0.26		(0.63	) (d)	0.03
Cash dividends declared per
	Class A Common share				0.060		0.060		0.060		0.135	(e)	0.315
Market prices per Class A
	Common share			$	23 1/16-18 13/16	$	26 1/8-19	$	25-20 1/16	$	31 1/8 -16 13/16	$	31 1/8 -16 13/16
(a)		Includes special provision for doubtful receivables of $32.5 million, net of income tax benefit of $21.2 million.
(b)		Sum of quarterly EPS does not equal the EPS for the year. For the fourth quarters of both fiscal 1999 and 1998, diluted EPS was the same as basic EPS; due to the Company's net losses in those quarters, the effect of stock options was anti-dilutive and therefore excluded from the EPS calculations.
(c)		Includes provision for merger expenses of $9.8 million, no income tax effect.
(d)		Includes provisions for writedown of goodwill of $87.3 million, no income tax effect, merger expenses of $(1.2) million, net of income tax benefit of $6.0 million, abandonment of capitalized software of $3.1 million, net of income tax benefit of $2.2 million, and restructuring expenses of $1.8 million, net of income tax benefit of $1.2 million.
(e)		The fiscal 1999 first quarter dividend was declared on September 24, 1998 and paid on December 1, 1998. It was recorded on the declaration date in the fourth quarter of fiscal 1998. See Management's Discussion and Analysis of Financial Condition and Results of Operations.
Bergen Brunswig Corporation Class A Common Stock is listed on the New York Stock Exchange. There were approximately 4,200 Class A Common Stock shareowners of record on September 30, 1999.

7

	b.		Financial Statements
STATEMENTS OF CONSOLIDATED EARNINGS
Dollars in thousands, except for per share amounts
Years Ended September 30,					1999		1998		1997
Consolidated Earnings:
	Net sales and other revenues:
		Excluding bulk shipments to customers' warehouses		$	17,244,905	$	13,720,017	$	11,659,127
		Bulk shipments to customers' warehouses			4,000,633		3,401,651		2,837,646
			Total net sales and other revenues		21,245,538		17,121,668		14,496,773
	Costs and expenses
		Cost of sales			20,146,011		16,371,403		13,842,342
		Distribution, selling, general and
			administrative expenses		805,593		522,185		467,500
		Provision for doubtful receivables			85,881		11,934		11,899
		Special charges			-		110,247		5,800
			Total costs and expenses		21,037,485		17,015,769		14,327,541
	Operating earnings				208,053		105,899		169,232
	Net interest expense				74,143		39,996		30,793
	Earnings before taxes on income and distributions
		on preferred securities of subsidiary trust			133,910		65,903		138,439
	Taxes on income				58,461		62,801		56,760
	Earnings before distributions on preferred
		securities of subsidiary trust			75,449		3,102		81,679
	Distributions on preferred securities of subsidiary
		trust, net of income tax benefit of $3,184			(4,876	)	-		-
	Net earnings			$	70,573	$	3,102	$	81,679
Earnings per share:
	Basic			$	0.60	$	0.03	$	0.81
	Diluted			$	0.59	$	0.03	$	0.81
Weighted average number of shares outstanding:
	Basic				117,835		101,118		100,413
	Diluted				119,095		102,620		101,429
See accompanying Notes to Consolidated Financial Statements.

CONSOLIDATED BALANCE SHEETS
Dollars in thousands
September 30,					1999		1998
ASSETS
	Current assets:
		Cash and cash equivalents		$	116,356	$	79,004
		Accounts and notes receivable, less allowance for
			doubtful receivables: 1999, $135,655; 1998, $30,363		1,478,990		920,247
		Inventories			1,813,716		1,458,290
		Income taxes receivable			40,178		38,371
		Prepaid expenses			18,668		4,876
			Total current assets		3,467,908		2,500,788
	Property - at cost:
		Land			11,265		12,427
		Building and leasehold improvements			129,818		88,055
		Equipment and fixtures			263,635		186,077
			Total property		404,718		286,559
		Less accumulated depreciation and amortization			164,273		141,745
			Property - net		240,445		144,814
	Other assets:
		Goodwill-net			1,642,424		253,568
		Other investments			11,177		8,851
		Noncurrent receivables			24,092		19,176
		Deferred income taxes			15,504		7,352
		Deferred charges and other assets			133,871		68,663
			Total other assets		1,827,068		357,610
			Total assets	$	5,535,421	$	3,003,212
See accompanying Notes to Consolidated Financial Statements.

CONSOLIDATED BALANCE SHEETS
Dollars in thousands
September 30,						1999		1998
LIABILITIES AND SHAREOWNERS' EQUITY
	Current liabilities:
		Accounts payable			$	1,693,690	$	1,579,332
		Accrued liabilities				229,432		113,331
		Customer credit balances				172,106		137,832
		Deferred income taxes				56,797		72,846
		Current portion of long-term debt				544,557		-
		Current portion of other long-term obligations				1,366		6,029
			Total current liabilities			2,697,948		1,909,370
	Long-term debt, net of current portion					993,344		448,323
	Other long-term obligations, net of current portion					48,639		16,455
			Total long-term obligations			1,041,983		464,778
	Company-obligated mandatorily redeemable preferred securities of
	subsidiary trust holding solely subordinated notes of the Company					300,000		-
	Commitments and contingencies (Notes 7 and 10)					-		-
	Shareowners' equity:
		Capital stock:
			Preferred - Authorized: 3,000,000 shares; issued: none			-		-
			Class A Common - Authorized: 300,000,000 shares; issued:
				1999, 137,316,182 shares; 1998, 111,835,142 shares		205,974		167,753
		Paid-in capital				818,564		80,231
		Accumulated other comprehensive income (loss)				235		(132	)
		Retained earnings				495,930		453,654
			Total			1,520,703		701,506
		Treasury shares, at cost: 1999, 3,110,671 shares;
			1998, 8,952,812 shares			(25,213	)	(72,442	)
			Total shareowners' equity			1,495,490		629,064
			Total liabilities and shareowners' equity		$	5,535,421	$	3,003,212
See accompanying Notes to Consolidated Financial Statements.

STATEMENTS OF CONSOLIDATED SHAREOWNERS' EQUITY
Dollars and shares in thousands
													Total
		Class A Common			Paid-in	Retained		Treasury Shares					Shareowners'
		Shares	Amount		Capital	Earnings		Shares		Amount		Other		Equity
Balance, September 30, 1996		111,042	$166,563	$	67,371	$432,580		(10,886	)	($87,911	)	$363	$	578,966
Net earnings		-	-		-	81,679		-		-		-		81,679
Exercise of stock options		688	1,032		5,086	-		(22	)	(332	)	-		5,786
Cash dividends declared,
	$0.216 per share	-	-		-	(21,694	)	-		-		-		(21,694	)
Change in net unrealized gain
	on investments, net of
	income tax	-	-		-	-		-		-		46		46
Acquisition of Treasury shares		-	-		-	-		-		(36	)	-		(36	)
Other		10	16		98	-		(2	)	-		-		114
Balance, September 30, 1997		111,740	167,611		72,555	492,565		(10,910	)	(88,279	)	409		644,861
Net earnings		-	-		-	3,102		-		-		-		3,102
Exercise of stock options		95	142		2,087	-		261		2,110		-		4,339
Cash dividends declared,
	$0.315 per share	-	-		-	(31,939	)	-		-		-		(31,939	)
Change in net unrealized gain
	on investments, net of
	income tax	-	-		-	-		-		-		(541	)	(541	)
Acquisition of businesses		-	-		5,589	(10,074	)	1,696		13,727		-		9,242
Balance, September 30, 1998		111,835	167,753		80,231	453,654		(8,953	)	(72,442	)	(132	)	629,064
Net earnings		-	-		-	70,573		-		-		-		70,573
Exercise of stock options and
	issuance of restricted
	shares	791	1,185		9,689	-		-		-		-		467
Employee stock purchase plan		32	48		419	-		-		-		-		467
Cash dividends declared,
	$0.225 per share	-	-		-	(28,325	)	-		-		-		(28,325	)
Change in net unrealized loss
	on investments, net of
	income tax	-	-		-	-		-		-		367		367
Acquisition of businesses		24,658	36,988		728,225	28		5,842		47,229		-		812,470
Balance, September 30, 1999		137,316	$205,974	$	818,564	$495,930		(3,111	)	($25,213	)	$235	$	1,495,490
See accompanying Notes to Consolidated Financial Statements.

STATEMENTS OF CONSOLIDATED CASH FLOWS
Dollars in thousands
Years Ended September 30,						1999		1998		1997
Operating Activities
Net earnings					$	70,573	$	3,102	$	81,679
Adjustments to reconcile net earnings to net cash flows
	from operating activities:
		Provision for doubtful receivables				85,881		11,934		11,899
		Depreciation and amortization of property				36,349		23,995		26,919
		Loss (gain) on dispositions of property				1,333		1,214		(382	)
		Amortization of intangible assets				29,682		13,470		13,837
		Writedown of goodwill				-		87,271		-
		Abandonment of capitalized software				-		5,307		-
		Deferred compensation				2,552		2,809		2,266
		Deferred income taxes				10,840		41,955		10,577
		Effects of changes, net of acquisitions:
			Receivables			(272,470	)	(153,505	)	(103,814	)
			Inventories			(273,421	)	(139,209	)	(88,384	)
			Income taxes receivable/payable			8,889		(31,663	)	7,287
			Prepaid expenses and other assets			(51,070	)	(11,886	)	(8,043	)
			Accounts payable			2,987		231,282		86,903
			Accrued liabilities			31,373		23,207		(9,935	)
			Customer credit balances			34,274		(39,050	)	43,582
				Net cash flows from operating activities		(282,228	)	70,233		74,391
Investing Activities
Property acquisitions						(57,130	)	(29,783	)	(23,806	)
Acquisition of businesses, less cash acquired						(248,405	)	(22,578	)	-
Repurchase of notes receivable with recourse						-		-		(15,884	)
Other						5,136		(976	)	(1,813	)
			Net cash flows from investing activities			(300,399	)	(53,337	)	(41,503	)
Financing Activities
Net revolving bank loan activity						20,000		30,000		20,000
Net commercial paper activity						752,608		-		-
Proceeds from issuance of trust preferred securities,
	net of issuance costs					289,825		-		-
Redemption of senior subordinated notes						(16,881	)	-		-
Repayment of other obligations, principally debt
	of acquired entities					(392,812	)	(2,502	)	(3,972	)
Distributions paid on trust preferred securities						(8,060	)	-		-
Shareowners' equity transactions:
	Exercise of stock options					10,874		4,339		5,786
	Cash dividends paid on Common Stock					(36,042	)	(24,223	)	(21,694	)
	Other					467		-		78
			Net cash flows from financing activities			619,979		7,614		198
Net increase in cash and cash equivalents						37,352		24,510		33,086
Cash and cash equivalents at beginning of year						79,004		54,494		21,408
Cash and cash equivalents at end of year					$	116,356	$	79,004	$	54,494
Supplemental Cash Flow Disclosures
Cash paid for
	Interest				$	67,714	$	37,823	$	32,061
	Income taxes, net of refunds				$	60,637	$	61,731	$	50,715
See accompanying Notes to Consolidated Financial Statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended September 30, 1999, 1998, and 1997

1.	Summary of Significant Accounting Policies
	Basis of Presentation

The consolidated financial statements include the accounts of Bergen Brunswig Corporation and its subsidiaries (the "Company"), after elimination of the effect of intercompany transactions and balances. Certain reclassifications have been made in the consolidated financial statements and notes to conform to 1999 presentations.

The preparation of the Company's consolidated financial statements in conformity with generally accepted accounting principles necessarily 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 balance sheet dates and the reported amounts of revenue and expense during the reporting periods. Actual results could differ from these estimates and assumptions.

Cash Equivalents and Investments

The Company considers all highly-liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.

The Company has classified its investments in debt and equity securities as "available for sale" securities and has reported such investments at fair value, with unrealized gains and losses excluded from earnings, and reported as a separate component of shareowners' equity. Realized gains and losses on investments are determined by the specific identification method and are included in net earnings. Such realized gains and losses for the years ended September 30, 1999, 1998 and 1997 were not material.

Inventories

Inventories for certain subsidiaries of the Company's Pharmaceutical Distribution and Other Businesses segments (approximately 91% of the Company's inventories at September 30, 1999) are valued at the lower of cost or market, determined on the last-in, first-out (LIFO) method. If the Company had used the first-in, first-out (FIFO) method of inventory valuation, which approximates current replacement cost, inventories would have been higher than reported by $150.9 million and $132.3 million at September 30, 1999 and 1998, respectively.

Property

Depreciation and amortization of property are computed principally on a straight-line basis over estimated useful lives or lease terms, if shorter. Generally, the estimated useful lives are 15 to 40 years for buildings and leasehold improvements, and 3 to 10 years for equipment and fixtures.

Intangible Assets

Goodwill, defined as the excess of cost over net assets of acquired companies (net of accumulated amortization of $91.9 million at September 30, 1999 and $67.2 million at September 30, 1998), is amortized on a straight-line basis principally over 40 years. The Company assesses the recoverability of goodwill using a fair value approach, based on discounted future operating cash flows. At least annually, management reviews intangible assets for possible impairment based on several criteria, including, but not limited to, sales trends, discounted operating cash flows and other operating factors. See Note 11 for a charge the Company recorded in fiscal 1998 related to impairment of intangible assets.

Noncurrent Receivables

Noncurrent receivables include notes receivable from employees and officers due at the Company's discretion in the amount of $5.5 million and $4.8 million at September 30, 1999 and 1998, respectively.

Impairment of Long-Lived Assets

The Company assesses the impairment of long-lived assets used in operations when indicators of impairment are present and the undiscounted future cash flows are not sufficient to recover the assets' carrying amounts. An impairment loss is measured by comparing the fair value of an asset to its carrying amount.

Revenue Recognition

The Company records revenues when product is shipped or services are provided to its customers. Along with other companies in its industry, the Company reports as revenues the gross dollar amount of bulk shipments to customers' warehouses and the related costs in cost of sales. Bulk shipment transactions are arranged by the Company with its suppliers at the express direction of the customer, and involve either shipments from the supplier directly to customers' warehouse sites or shipments from the supplier to Company warehouses for immediate shipment to customers' warehouse sites. Gross profit earned by the Company on bulk shipments was not material in any year presented. During each of the fiscal years ended September 30, 1999, 1998 and 1997, the Company's Pharmaceutical Distribution segment made bulk shipments to one customer's warehouses which comprised approximately 15%, 14% and 14%, respectively, of the Company's consolidated total net sales and other revenues in those years.

Accounting Pronouncements

Effective October 1, 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive Income", which establishes standards for the reporting and display of comprehensive income and its components in financial statements. This statement defines comprehensive income as all changes in equity during a period from non-owner sources. The Company has no reported material differences between net earnings and comprehensive income. Therefore, statements of comprehensive income have not been presented.

Effective October 1, 1998, the Company adopted the American Institute of Certified Public Accountants' Statement of Position 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use." This statement provides guidance for the capitalization and amortization of costs incurred in connection with software to be used internally by the Company. Adoption of the statement has not had a significant impact on the Company's consolidated financial position, results of operations or cash flows.

During fiscal 1999, the Company adopted SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information" ("SFAS 131") which requires companies to define and report financial and descriptive information on an annual and quarterly basis about their operating segments. See Note 13.

During fiscal 1999, the Company adopted SFAS No. 132, "Employers' Disclosures about Pension and Other Postretirement Benefits" ("SFAS 132") which standardizes the disclosure requirements for pensions and other postretirement benefits plans. This new statement does not change the measurement or recognition of plan expense. See Note 9.

Adoption of SFAS No. 131 and 132 has not had a significant impact on the Company's consolidated financial position, results of operations or cash flows.

In 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133") which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives), and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities -- Deferral of the Effective Date of FASB Statement No. 133" which defers the effective date until the Company's 2001 fiscal year. Management is in the process of evaluating the adoption of this standard, but does not believe it will have a material effect on the Company's consolidated financial position, results of operations or cash flows, and any effect will generally be limited to the form and content of its disclosures.

2. Long-Term Debt

Long-term debt at September 30, 1999 and 1998 consisted of the following:

Dollars in thousands			1999		1998
7 3/8% senior notes due 2003		$	149,633	$	149,522
7 1/4% senior notes due 2005			99,802		99,767
8 3/8% senior subordinated notes due 2008			308,119		-
Commercial paper averaging 5.72% at September 30, 1999			692,891		-
Revolving credit facilities due 2001 averaging 6.00%
	and 6.02%, respectively		249,717		170,000
7% convertible subordinated debentures due 2006			20,609		20,609
6 7/8% exchangeable subordinated debentures due 2011			8,425		8,425
10% unsecured promissory note due 2003			4,500		-
Other			4,205		-
	Total		1,537,901		448,323
Less current portion			544,557		-
	Total	$	993,344	$	448,323

On April 23, 1999, the Company entered into an unsecured credit agreement (the "Credit Facility") with a group of banks. The Credit Facility allows borrowings of up to $600 million under a 364-day unsecured revolving line of credit to be used for general corporate purposes, including retirement of outstanding debt of the Company or any of its subsidiaries and entities which the Company may acquire in the future. The Credit Facility also allows borrowings under discretionary credit lines ("discretionary lines"), as available, outside of the Credit Facility. The Credit Facility has loan covenants which are identical to those of the Company's credit agreement (the "Credit Agreement"). There were no borrowings outstanding at September 30, 1999 under the Senior Credit Facility.

The Company's unsecured Credit Agreement, which is effective through March 2001, allows borrowings of up to $400 million and also allows borrowings under discretionary lines outside of the Credit Agreement. On April 23, 1999, the Credit Agreement was amended to, among other things, allow borrowing under the Credit Facility. Outstanding borrowings under the Credit Agreement and discretionary lines were $250 million and $170 million at September 30, 1999 and 1998, respectively. The Credit Agreement has loan covenants which require the Company to maintain certain financial statement ratios. The Company is in compliance with all required ratios at September 30, 1999. The amount of credit available to the Company under the Credit Agreement and the Credit Facility is reduced dollar for dollar by the amount of outstanding Notes under the Commercial Paper Agreements (see below). The Company pays annual facility fees to maintain the Credit Agreement and Credit Facility.

On April 14, 1999, the Company entered into a series of unsecured commercial paper dealer agreements (the "Commercial Paper Agreements") with a group of commercial paper dealers which provides for the private placement of short-term commercial paper notes of the Company (the "Notes"), as available, up to a maximum of $1 billion outstanding. Outstanding Notes under the Commercial Paper Agreements were approximately $693 million at September 30, 1999. The Commercial Paper Agreements allow maturities of up to 364 days from the date of issue and are backed by the Credit Agreement and Credit Facility. The Notes may not be redeemed prior to maturity nor are they subject to voluntary prepayment.

An aggregate of $400 million of outstanding borrowings at September 30, 1999 (including $250 million outstanding under the Credit Agreement and discretionary lines and $150 million outstanding Notes under the Commercial Paper Agreements) have been classified as long-term debt based on the Company's ability and intent to finance them on a long-term basis under the Credit Agreement.

The maximum outstanding borrowings at any quarter end under the Credit Agreement and Credit Facility including discretionary lines and Commercial Paper Agreements for the years ended September 30, 1999 and 1998 were $943 million and $368 million, respectively.

On June 25, 1999, PharMerica, a wholly-owned subsidiary of the Company, completed an offer to purchase its unsecured 8 3/8% Senior Subordinated Notes due 2008 (the "8 3/8% Senior Notes"). Holders tendered an aggregate principal amount of $16.9 million in response to PharMerica's offer to purchase the 8 3/8% Senior Notes at a cash price equal to $1,010 per $1,000 principal amount, plus interest. The offer was required as a result of the acquisition of PharMerica by the Company on April 26, 1999 according to the terms of the indenture under which the 8 3/8% Senior Notes were issued.

In connection with the acquisition of PharMerica, the Company assumed a 10% unsecured promissory note due August 2003 which is payable to the former owner of National Institutional Pharmacy Services, Inc. ("NIPSI"), which was acquired by PharMerica in August 1998.

On May 23, 1995, the Company sold $100 million aggregate principal amount of unsecured
7 1/4% Senior Notes due June 1, 2005 (the "7 % Notes"). On January 14, 1993, the Company sold $150 million aggregate principal amount of unsecured 7 3/8% Senior Notes due January 15, 2003 (the "7 3/8 % Notes"). The 7 1/4 % Notes and 7 3/8 % Notes are not redeemable prior to maturity and are not entitled to any sinking fund. Interest on the 7 1/4 % Notes is payable semi-annually on June 1 and December 1 of each year. Interest on the 7 3/8% Notes is payable semi-annually on January 15 and July 15 of each year. The carrying value of the 7 1/4% Notes and 7 3/8% Notes represents gross proceeds plus amortization of the original issue discount ratably over the life of each issue.

The Company also filed a shelf registration statement with the SEC which became effective on March 27, 1996 (the "1996 Registration Statement"). The 1996 Registration Statement allows the Company to sell senior and subordinated debt or equity securities to the public from time to time up to an aggregate maximum principal amount of $400 million. The Company intends to use the net proceeds from any sale of such securities for general corporate purposes, which may include, without limitation, the repayment of indebtedness of the Company or of any of its subsidiaries, and entities which the Company may acquire in the future. Any offering of such securities shall be made only by means of a prospectus.

In July 1986, the Company issued $43.0 million of unsecured 6 7/8% Exchangeable Subordinated Debentures due July 2011 (the "6 7/8% Debentures") and during March 1990, $32.1 million principal amount of the 6 7/8% Debentures was tendered and purchased pursuant to an offer from the Company. Since March 1990, the Company has redeemed an additional $2.5 million aggregate principal amount plus accrued interest. The remaining unredeemed 6 7/8% Debentures receive interest on January 15 and July 15 of each year.

In connection with the acquisition of Durr-Fillauer Medical Inc. and subsidiaries ("Durr") in September 1992, the Company assumed $69.0 million of Durr's unsecured 7% Convertible Subordinated Debentures due March 1, 2006 (the "7% Debentures"). Since September 1992, the Company has redeemed $48.4 million aggregate principal amount plus accrued interest. The remaining unredeemed 7% Debentures receive interest on March 1 and September 1 of each year.

Scheduled future principal payments of long-term debt are $544.6 million in fiscal 2000, $401.4 million in fiscal 2001, $.7 million in fiscal 2002, $4.6 million in fiscal 2003, $149.6 million in 2004, and $437.0 million thereafter.

3. Preferred Securities of Trust

During the year ended September 30, 1999, the Company formed Bergen Capital I (the "Trust") which was established to sell preferred securities to the public; sell common securities to the Company; use the proceeds from these sales to buy an equal amount of subordinated debt securities of the Company; and distribute the cash payments it receives on the subordinated debt securities it owns to the holders of its preferred and common securities. In turn, the Company will pay principal, premium (if any) and interest on its subordinated debt securities; and will guarantee certain payments relating to the preferred securities.

On May 26, 1999, the Trust, a wholly-owned subsidiary of the Company, issued 12,000,000 shares of 7.80% Trust Originated Preferred Securities (SM) (TOPrS(SM)) (the "Preferred Securities") at $25 per security. The proceeds of such issuances were invested by the Trust in $300 million aggregate principal amount of the Company's 7.80% Subordinated Deferrable Interest Notes due June 30, 2039 (the "Subordinated Notes"). The Company used the net proceeds from the Trust for general corporate purposes, principally retirement of a portion of its outstanding debt. The Subordinated Notes represent the sole assets of the Trust and bear interest at the annual rate of 7.80%, payable quarterly, and are redeemable by the Company beginning in May 2004 at 100% of the principal amount thereof. The obligations of the Trust related to the Preferred Securities are fully and unconditionally guaranteed by the Company.

Holders of the Preferred Securities are entitled to cumulative cash distributions at an annual rate of 7.80% of the liquidation amount of $25 per security beginning June 30, 1999. The Preferred Securities will be redeemable upon any repayment of the Subordinated Notes at 100% of the liquidation amount beginning in May 2004.

The Company, under certain conditions, may cause the Trust to defer the payment of distributions for successive periods of up to 20 consecutive quarters. During such periods, accrued distributions on the Preferred Securities will compound quarterly at an annual rate of 7.80%. Also, during such periods, the Company may not declare or pay distributions on its capital stock; may not redeem, purchase or make a liquidation payment on any of its capital stock; and may not make interest, principal or premium payments on, or repurchase or redeem, any of its debt securities that rank equal with or junior to the Subordinated Notes.

The Subordinated Notes and the related Trust investment in the Subordinated Notes have been eliminated in consolidation and the Preferred Securities are reflected as outstanding in the accompanying consolidated financial statements.

4. Capital Stock, Paid-in Capital and Stock Options

The authorized capital stock of the Company consists of 300,000,000 shares of Class A Common Stock, par value $1.50 per share (the "Common Stock"); and 3,000,000 shares of Preferred Stock without nominal or par value (the "Preferred Stock").

The Board of Directors (the "Board") is authorized to divide the Preferred Stock into one or more series and to determine the relative rights, preferences and limitations of the shares of any such series. In addition, the Board may give the Preferred Stock (or any series) special, limited, multiple or no voting rights.

Subject to the preferences and other rights of the Preferred Stock, the Common Stock may receive stock or cash dividends as declared by the Board and each share of Common Stock is entitled to one vote per share at every meeting of shareowners. In the event of any liquidation, dissolution or winding up of the affairs of the Company, the holders of the Preferred Stock may be entitled to a liquidation preference as compared with the rights of owners of the Common Stock.

On February 9, 1994, the Board adopted a Shareowner Rights Plan (which was amended on December 17, 1999; see Exhibit 4(c) to this Annual Report) which provides for the issuance of one Preferred Share Purchase Right (the "Rights") for each outstanding share of Common Stock. The Rights are generally not exercisable until 10 days after a person or group ("Acquiror") acquires 15% of the Common Stock or announces a tender offer which could result in a person or group owning 15% or more of the Common Stock (an "Acquisition"). Each Right, should it become exercisable, will entitle the owner to buy 1/100^th of a share of a new series of the Company's Series A Junior Preferred Stock at an exercise price of $80.00.

In the event of an Acquisition without the approval of the Board, each Right will entitle the owner, other than an Acquiror, to buy at the Rights' then-current exercise price a number of shares of Common Stock with a market value equal to twice the exercise price. In addition, if, after an Acquisition, the Company were to be acquired by merger, shareowners with unexercised Rights could purchase common stock of the Acquiror with a value of twice the exercise price of the Rights. The Board may redeem the Rights for $0.01 per Right at any time prior to an Acquisition. Unless earlier redeemed, the Rights will expire on February 18, 2004.

On September 24, 1998, the Company declared a 2-for-1 stock split on the Company's Common Stock which was paid on December 1, 1998 to shareowners of record on November 2, 1998. Share and per share amounts included in the accompanying consolidated financial statements and notes are based on the increased number of shares giving retroactive effect to the stock split.

During fiscal 1999, the Company's shareowners approved the following stock-related compensation plans:

l	the 1999 Employee Stock Purchase Plan ("ESPP")
l	the 1999 Management Stock Accumulation Plan ("MSAP")
l	the 1999 Non-Employee Directors' Stock Plan ("NDSP")
l	the 1999 Deferred Compensation Plan ("DCP")
l	the 1999 Management Stock Incentive Plan ("MSIP")

The ESPP, under which 500,000 shares of Common Stock can be sold to employees, is a payroll-deduction based plan under which eligible participants may elect semiannually to withhold up to 25% of base salary to purchase shares of the Company's Common Stock at a price equal to 85% of the fair market value of the stock on the start date of a purchase period or on the purchase date, whichever is lower. A participant is granted a purchase right on the start date of each purchase period in which he or she participates. The purchase right provides the Participant with the right to purchase shares of Common Stock on the purchase date. Each purchase period has a duration of six months and runs from the first business day in January to the last business day in June and from the first business day in July to the last business day in December. The purchase date is defined as the last business day of each purchase period.

Unless terminated sooner by the Board, the ESPP will terminate upon the earliest of (i) January 1, 2009; (ii) the date on which all shares available for issuance under the ESPP have been sold pursuant to the purchase rights exercised under the ESPP; or (iii) the date on which all purchase rights are exercised in connection with certain other transactions as defined in the ESPP. During fiscal 1999, 31,801 shares of Common Stock were sold under the ESPP at $14.662 per share, and, at September 30, 1999, 468,199 shares remained available for sale.

The MSAP allows the Company to grant interest-bearing loans to eligible key executives, in order to facilitate their purchase of Common Stock. Loans can be granted for terms of between one and five years, up to an aggregate of $1.0 million per eligible employee, in an amount not in excess of three times the eligible employee's salary in effect on the date the loan is issued; provided that the eligible employee agrees to use the proceeds of such loan, as fully as possible, to purchase Common Stock on the open market. Common Stock purchased with the proceeds of any loan serves as collateral securing repayment of the loan.

During the term of each loan, the Company may award credits to participants based on the attainment of certain specified corporate performance goals selected by the Company and established at the commencement of the loan term. The dollar equivalent of any credits earned and accumulated by a participant are applied to the repayment of the loan at the loan expiration date. To the extent that a participant's accumulated credits are insufficient to repay the loan in full, the participant remains responsible for full repayment which must occur no later than 90 days after the loan's expiration date. MSAP remains in effect for as long as there is a loan outstanding. No loan may be issued under the MSAP after September 30, 2004. There were no loans outstanding under the MSAP at September 30, 1999.

The NDSP, under which 750,000 shares of Common Stock can be issued to non-employee directors of the Board, requires each non-employee director to receive an award of restricted shares in an amount equivalent to 25% of his or her annual fees in lieu of cash compensation. The number of restricted shares awarded to each non-employee director is determined by dividing 25% of such annual fees by the fair market value of a share of Common Stock on the date of the award. Each award of restricted shares fully vests and becomes nonforfeitable as of the first anniversary following the award.

Additionally, prior to the commencement of each fiscal year, each non-employee director may elect to receive in unrestricted shares an additional specified percentage of his or her director fees for such year greater than the required 25% described above, in lieu of cash compensation for such portion. The number of shares so awarded are determined by dividing the portion of such director fees to be paid in such shares by the fair market value of a share of Common Stock on the first business day of the Company's fiscal year to which such fees relate. Such shares are immediately vested upon grant and are not to be forfeitable to the Company.

In addition to the awards described above, the NDSP provides that each non-employee director receives awards of stock options to purchase shares of Common Stock. Upon election to the Board, each non-employee director receives an initial award of an option to purchase 20,000 shares of Common Stock. Each non-employee director who was a member of the Board on the adoption date of the NDSP was also awarded an option to purchase 20,000 shares of Common Stock. Subsequent to the initial award, each non-employee director receives an annual award of an option to purchase 6,000 shares of Common Stock. Options awarded pursuant to the NDSP generally vest and become exercisable in equal installments as of each of the first three Annual Shareowners' meetings following the date of grant. During 1999, non-employee directors were awarded 3,318 restricted shares of Common Stock at $24.91 per share and were awarded options to purchase 180,000 shares of Common Stock at $21.38 per share. At September 30, 1999, 566,682 shares remained available for issuance. Unless terminated earlier by the Board, the NDSP will terminate on April 22, 2009.

The DCP, an unfunded plan, under which an aggregate of 2,000,000 shares of Common Stock are authorized for issuance, allows eligible officers, directors and key management employees, to defer a portion of his or her annual compensation in the form of cash or stock credits. Stock credits, including dividend equivalents, are equal to the full and fractional number of shares of Common Stock that could be purchased with the participant's compensation allocated to stock credits based on the average of closing prices of Common Stock during each month, plus, at the Board's discretion, up to one-half of a share of Common Stock for each full share credited. Stock credit distributions are made in shares of Common Stock. No shares of Common Stock have been issued under the DCP at September 30, 1999.

The MSIP, under which 10,000,000 shares of Common Stock could be issued to eligible individuals who are officers, key employees or consultants of the Company, authorizes certain stock awards, stock options, stock appreciation rights and conditional performance share awards. Stock options awarded under the MSIP entitle the participant to acquire a specified number of shares of Common Stock at an exercise price determined by the Company's Compensation / Stock Option Committee. Such options expire no later than ten years from the date of grant. At September 30, 1999, there were 1,570,898 option shares outstanding, including 1,189,969 shares converted from options under PharMerica's stock option plans, and 8,429,102 shares available for grant under the MSIP. No other stock awards were outstanding at September 30, 1999.

At September 30, 1999, there were outstanding options to purchase 6,485,179 shares of Common Stock under the amended and restated 1989 stock incentive and 1983 stock option plans at prices per share not less than the fair market value on the dates the options were granted. No additional options may be granted under these plans.

Stock appreciation rights may be offered to some or all of the employees who hold or receive options granted under the stock option plans. No stock appreciation rights were outstanding as of September 30, 1999, 1998, or 1997.

The Company has adopted the disclosure-only provisions of SFAS No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"). No compensation cost has been recognized for the Company's NDSP or stock option plans. Had compensation cost for the Company's NDSP, MSIP and 1989 stock incentive plan been determined based on the fair value at the grant date for grants in fiscal 1999, 1998 and 1997 consistent with the provisions of SFAS 123, the Company's net earnings and diluted earnings per share would have been reduced to the pro forma amounts indicated below:

		1999		1998		1997
	(in thousands, except per share amounts)
Net earnings - as reported	$	70,573	$	3,102	$	81,679
Net earnings - pro forma	$	63,790	$	576	$	80,474
Diluted earnings per share - as reported	$	0.59	$	0.03	$	0.81
Diluted earnings per share - pro forma	$	0.54	$	0.01	$	0.79

The fair value of options granted under the NDSP, MSIP and the 1989 stock incentive plan during fiscal 1999, 1998 and 1997 were used to calculate the pro forma net earnings and diluted earnings per share above, on the various grant dates, using a binomial option-pricing model with the following weighted average assumptions:

	1999		1998		1997
Dividend yield	2.0	%	2.0	%	2.0	%
Expected volatility	60.3	%	46.9	%	36.6	%
Risk-free interest rate	5.6	%	4.9	%	5.9	%
Expected life	4 years		4 years		4 years
Fair value of grants	$12.00		$8.65		$4.14

Changes in the number of shares represented by outstanding options under the Company's stock-related compensation plans during the years ended September 30, 1999, 1998 and 1997 are summarized as follows:

		1999			1998					1997
			Weighted			Weighted					Weighted
			Average			Average					Average
			Exercise			Exercise					Exercise
		Shares	Price		Shares	Price				Shares	Price
Outstanding at beginning of year		7,065,460	$	15.21	4,467,584		$		9.13	4,723,566	$	8.01
Options granted ($11.55 to
	$24.91 per share)	859,060		19.57	3,105,716			23.06		787,506		12.86
Options converted from
	PharMerica plans ($12.29 to $43.78
	$43.78 per share)	1,534,646		31.96	-			-		-		-
Options exercised ($2.97 to
	$24.91 per share)	(786,269	)	8.54	(355,546	)		7.97		(688,342	)	6.34
Options canceled ($2.97 to
	$43.78 per share)	(437,259	)	31.18	(152,294	)		13.65		(355,146	)	8.50
Outstanding at end of year (1999,
	$5.72 to $43.78 per share)	8,235,638	$	18.56	7,065,460	$		15.21		4,467,584	$	9.13
Exercisable at end of year		4,462,949	$	16.80	2,772,161	$		8.26		2,581,592	$	8.13
Available for grant at end of year		9,128,875			327,488					427,006

The following table summarizes information concerning outstanding and exercisable options at September 30, 1999:

					Options Outstanding						Options Exercisable
						Weighted		Weighted					Weighted
						Average		Average					Average
					Number	Remaining		Exercise			Number		Exercise
Range of exercise prices					Outstanding	Life		Price			Exercisable		Price
$	5.72	-	$	7.93	962,501	3.63	$		6.51	962,501		$		6.51
$	8.05	-	$	9.77	1,191,292	5.30			9.25	932,724				9.15
$	10.36	-	$	13.00	1,154,611	7.00			12.27	668,757				12.07
$	14.57	-	$	21.00	683,938	9.15			17.69	188,377				17.90
$	21.06	-	$	21.82	1,430,760	8.46			21.17	290,650				21.13
$	24.91				1,841,288	8.99			24.91	613,946				24.91
$	25.93	-	$	43.78	971,248	8.14			34.13	805,994				33.99
					8,235,638	7.37	$		18.56	4,462,949		$		16.80

At September 30, 1999, an aggregate of 21,473,338 shares of Class A Common Stock were reserved for the exercise of stock options and for issuance under the ESPP, NDSP, DCP and the elective retirement savings plan (see Note 9).

5. Business Acquisitions

Fiscal 1999:

On April 26, 1999, the Company acquired PharMerica, one of the nation's largest providers of pharmaceutical products and pharmacy management services to long-term care and alternate site settings, headquartered in Tampa, Florida. The Company issued approximately 24.7 million shares of Common Stock valued at approximately $670 million, acquired net assets (excluding debt) at fair value of approximately $307 million, assumed debt of approximately $600 million and incurred costs of approximately $10 million. The Company recorded goodwill of approximately $973 million in the transaction.

On January 21, 1999, the Company acquired Stadtlander, a national leader in disease-specific pharmaceutical care delivery for transplant, HIV, infertility and serious mental illness patient populations and a leading provider of pharmaceutical care to the privatized corrections market, headquartered in Pittsburgh, Pennsylvania. The Company paid approximately $195 million in cash and issued approximately 5.7 million shares of Common Stock, previously held as Treasury shares, valued at approximately $140 million. The Company acquired net assets (excluding debt) at fair value of approximately $40 million, assumed debt of approximately $100 million and incurred costs of approximately $10 million. The Company recorded goodwill of approximately $405 million in the transaction.

If the acquisitions of PharMerica and Stadtlander had occurred as of the beginning of the fiscal years ended September 30, 1999 and 1998, unaudited pro forma net sales and other revenues, net earnings (loss) and diluted earnings (loss) per share would have been as follows:

	Fiscal Year Ended September 30,
Dollars in millions, except per share amounts	1999		1998
Net sales and other revenues	$	21,656.8	$	18,019.3
Net earnings (loss)	$	74.6	$	(15.9	)
Diluted earnings (loss) per share	$	0.55	$	(0.12	)

The pro forma operating results above include the results of operations for PharMerica and Stadtlander for the twelve months ended September 30, 1999 and 1998 with increased goodwill amortization along with other relevant adjustments to reflect fair value of the acquired assets. Pro forma operating results above include the special after-tax charges of $32.5 million and $100.8 million recorded by the Company during the fiscal years ended September 30, 1999 and 1998, respectively, as discussed in Note 11. Pro forma operating results for the fiscal year ended September 30, 1998 also include special after-tax charges recorded by PharMerica for restructuring expenses of $9.4 million, impairment losses of $3.1 million and a loss on disposition of a business of $4.5 million. Additionally, the pro forma operating results include pro forma interest expense on the assumed acquisition borrowings to finance the cash portion of the Stadtlander transaction and the effect of decreased interest expense attributable to PharMerica becoming a co-borrower under the Company's credit facilities. Pro forma adjustments to provision for taxes on income reflect, primarily, the increased non-deductible goodwill amortization. Pro forma issuance of the Company's Common Stock is reflected in the weighted average number of shares outstanding for the computations of pro forma diluted earnings per share.

The results of operations reflected in the pro forma information above are not necessarily indicative of the results which would have been reported, or would be reported in the future, if the PharMerica and Stadtlander acquisitions had been effected at the beginning of the respective fiscal years.

On February 10, 1999, the Company acquired J.M. Blanco, Puerto Rico's largest pharmaceutical distributor, headquartered in Guaynabo, Puerto Rico, for a cash purchase price of approximately $30 million. The Company acquired net assets (excluding debt) at fair value of approximately $24 million, assumed debt of approximately $22 million and incurred costs of approximately $1 million. The Company recorded goodwill of approximately $29 million in the transaction.

On December 31, 1998, the Company acquired MII, a pre-filler of pharmaceuticals for oncology centers, located in Tampa, Florida. The Company issued approximately 200,000 shares of Common Stock, previously held as Treasury shares, valued at approximately $6.0 million, acquired net assets at fair value of approximately $0.1 million and incurred costs of $0.2 million. The Company recorded goodwill of approximately $6.1 million in the transaction.

Had the acquisitions of J.M. Blanco and MII occurred at the beginning of fiscal 1998, the pro forma inclusion of their operating results would not have had a significant effect on the reported consolidated net sales and other revenues and net earnings in either fiscal 1998 or 1999.

Each of the aforementioned acquisitions was accounted for as a purchase for financial reporting purposes. The Company is in disagreement with the seller and the seller's independent auditors regarding the valuation of the net assets of Stadtlander. Any amounts realized from the seller would be recorded as an adjustment to the purchase price.

Fiscal 1998:

On September 30, 1998, the Company acquired Ransdell, a privately-held medical-surgical supply distributor, and its affiliate, Choice Systems, Inc. ("Choice"), a developer of supply channel management software for the healthcare industry, headquartered in Louisville, Kentucky. These acquisitions were accounted for as poolings of interests for financial reporting purposes. The Company issued approximately 716,000 shares of its Common Stock to the Ransdell and Choice shareowners.

On August 31, 1998, the Company acquired Lash, a privately-held healthcare reimbursement consulting firm headquartered in Washington, D.C. This acquisition was accounted for as a pooling of interests for financial reporting purposes and the Company issued approximately 980,000 shares of its Common Stock to the Lash shareowners.

The impact of the Ransdell, Choice and Lash acquisitions, on a historical basis, is not significant. Accordingly, prior period historical financial statements were not restated for these acquisitions. The above acquired entities' financial results are included in the consolidated financial results of the Company since their respective acquisition dates. The aggregate merger expenses incurred related to these acquisitions were not material.

On May 12, 1998, the Company completed the acquisition of Pacific Criticare, a privately-held distributor of medical-surgical products located in Waipahu, Hawaii for a cash purchase price of $4.0 million. The Company acquired net assets at fair value of approximately $0.4 million net and incurred costs of $.3 million. The Company recorded goodwill of approximately $3.9 million in the transaction.

On January 2, 1998, the Company completed the acquisition of substantially all of the net assets of Besse, a privately-held distributor of injectables, diagnostics and medical supplies located in Cincinnati, Ohio, for a cash purchase price of $22.2 million. The Company acquired net assets at fair value of approximately $4.8 million and incurred costs of $0.4 million. The Company recorded goodwill of approximately $17.8 million in the transaction.

Had the acquisitions of Pacific Criticare and Besse occurred at the beginning of fiscal 1997, the pro-forma inclusion of their operating results would not have had a significant effect on the Company's reported consolidated net sales and other revenues and net earnings in either fiscal 1997 or 1998.

6. Earnings Per Share

The following table sets forth the computation of basic and diluted Earnings Per Share ("EPS") for the fiscal years ended September 30, 1999, 1998 and 1997, respectively.

In thousands, except EPS				1999		1998		1997
Numerator for both basic and
	diluted EPS - net earnings		$	70,573	$	3,102	$	81,679
Denominator:
	Denominator for basic EPS - weighted average
		shares of Class A Common Stock outstanding		117,835		101,118		100,413
	Effects of dilutive employees' stock options
		(dilutive potential common shares)		1,260		1,502		1,016
	Denominator for diluted EPS - adjusted weighted
		average shares and assumed conversions		119,095		102,620		101,429
Earnings per share:
	Basic		$	0.60	$	0.03	$	0.81
	Diluted		$	0.59	$	0.03	$	0.81

7. Leases

The Company conducts most of its operations from leased warehouse and office facilities and uses certain data processing, transportation, and other equipment under lease agreements expiring at various dates through fiscal 2008, excluding renewal options. Future minimum rental commitments at September 30, 1999, under operating leases having noncancelable lease terms in excess of one year, aggregated $100.7 million, with rental payments during the five succeeding fiscal years of $30.8 million, $24.9 million, $17.3 million, $10.5 million and $6.5 million, respectively. Future minimum rentals to be received under noncancelable subleases at September 30, 1999 were not material. Net rental expense for the years ended September 30, 1999, 1998, and 1997, was $37.7 million, $26.2 million and $22.3 million, respectively. Sublease income was not material in any of these years.

8. Taxes on Income

The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are established for temporary differences between the financial reporting bases and the tax bases of the Company's assets and liabilities at tax rates expected to be in effect when such assets or liabilities are realized or settled.

Total taxes on income (excluding the tax benefit related to the Company's distributions on preferred securities of subsidiary trust) for the years ended September 30, 1999, 1998, and 1997 are summarized as follows:

Dollars in thousands		1999			1998		1997
Currently payable
	Federal	$	39,875	$	15,714	$	38,964
	State		7,276		5,132		7,219
	Puerto Rico		470		-		-
Deferred (principally Federal)			10,840		41,955		10,577
	Total	$	58,461	$	62,801	$	56,760

Taxes on income vary from the statutory Federal income tax rate applied to earnings before taxes on income as the result of the following:

Dollars in thousands			1999		1998		1997
Statutory Federal income tax rate applied
	to earnings before taxes on income	$	46,868	$	23,066	$	48,454
Increase (decrease) in taxes resulting from:
	Amortization of goodwill		4,628		3,319		3,262
	State income taxes - net of Federal benefits		5,861		6,385		5,578
	Governmental investment income		-		(45	)	(184	)
	Goodwill writedown		-		30,545		-
	Other		1,104		(469	)	(350	)
Total taxes on income		$	58,461	$	62,801	$	56,760

The Company has not provided for withholding taxes on the earnings of its Puerto Rican subsidiary because it is currently anticipated that these earnings will be permanently reinvested.

The tax effects of significant items comprising the Company's net deferred tax liability as of September 30, 1999 and 1998 are as follows:

Dollars in thousands				1999		1998
Deferred tax liabilities:
	Inventory basis difference due to LIFO
		methods and uniform capitalization	$	118,096	$	114,552
	Accelerated depreciation			11,742		7,368
	Employee benefits			(944	)	2,481
	Mark to market receivables			5,023		7,535
	Goodwill amortization			3,732		-
	Other			6,551		2,868
		Total		144,200		134,804
Deferred tax assets:
	Reserves for doubtful receivables			48,112		17,695
	Acquisition and restructuring expenses not
		currently deductible		10,500		2,736
	Vacation pay not currently deductible			5,948		3,018
	Accrued liabilities not currently deductible			23,281		17,188
	AMT credit carryforward			-		22,400
	Net operating loss carryforwards			16,110		15,050
	Deferred income			8,083		-
		Total		112,034		78,087
Valuation allowance for deferred income tax assets				(9,127	)	(8,777	)
Deferred income tax assets				102,907		69,310
Net deferred tax liability			$	41,293	$	65,494

Deferred taxes result from temporary differences in the recognition of revenues and expenses for tax and financial reporting purposes.

The Company has approximately $44.0 million of net operating loss carryforwards related to an acquisition that can be used to reduce future taxable income. These net operating losses can only be used to offset income of the acquired entity, and, if not utilized, will begin expiring in fiscal 2009. The Company has provided a valuation allowance on a portion of the deferred tax asset related to the pre-acquisition net operating losses at September 30, 1999 due to the uncertainty regarding realization.

9. Retirement and Savings Plans

The Company provides for retirement benefits through an elective retirement savings plan and supplemental retirement plans.

The Company has an elective retirement savings plan generally available to all employees with 30 days of service. Under the terms of the plan, the Company guarantees a contribution of $1.00 for each $1.00 invested by the participant up to the participant's investment of 3% of salary, and $0.50 for each additional $1.00 invested by the participant up to the participant's investment of an additional 2% of salary, subject to plan and regulatory limitations. The Company may also make additional cash or stock contributions to the plan at its discretion. All participants vest immediately in the Company's contributions from the first day of participation in the plan. The Company made contributions of $6.6 million, $4.5 million, and $3.8 million to the plan in fiscal 1999, 1998 and 1997, respectively.

The supplemental retirement plans provide benefits for certain officers and key employees. The Company has a Supplemental Executive Retirement Plan ("SERP") for officers and key employees. Effective in fiscal 1999, the SERP was amended to provide certain additional benefits to participants. SERP is a "target" benefit plan, with the annual lifetime benefit based upon a percentage of salary during the final five years of pay at age 62, offset by several other sources of income including benefits payable under a prior supplemental retirement plan.

The following tables provide a reconciliation of the changes in the supplemental retirement plans:

Dollars in thousands				1999		1998
Change in benefit obligations
	Projected benefit obligation at beginning of year		$	24,475	$	21,524
	Service cost			1,313		916
	Interest cost			1,480		1,482
	Disbursements			(5,701	)	(916	)
	Actuarial (gains) losses			(4,667	)	1,469
	Plan amendments			5,681		-
		Projected benefit obligation end of year	$	22,581	$	24,475
Change in plan assets
	Fair value of plan assets at beginning of year		$	2,919	$	2,906
	Actual return on plan assets			131		156
	Disbursements			(92	)	(92	)
	Administrative expenses			(30	)	(51	)
		Fair value of plan assets at end of year	$	2,928	$	2,919
Unfunded Status
	Unfunded status at end of year		$	19,653	$	21,556
	Unrecognized net obligation at transition			(2,786	)	(3,049	)
	Unrecognized prior service cost			(7,312	)	(1,882	)
	Unrecognized net actuarial losses			(3,656	)	(8,885	)
		Net liability recognized	$	5,899	$	7,740

The following table provides the amounts recognized in the Company's consolidated balance sheets at September 30, 1999 and 1998:

Dollars in thousands			1999		1998
Accrued benefit cost		$	5,899	$	7,740
Additional minimum cost			6,478		7,451
Intangible asset			(3,336	)	(3,660	)
Other			(3,142	)	(3,791	)
	Net liability recognized	$	5,899	$	7,740

The assumed rates used to measure the benefit obligations and the expected earnings on plan assets for the supplemental retirement plans for fiscal 1999, 1998 and 1997 were as follows:

Weighted average assumptions as of September 30,	1999		1998		1997
Discount rate	7.75	%	6.75	%	7.75	%
Rate of salary increase	4.00	%	5.50	%	5.50	%

The following table provides the components of net periodic pension costs for the supplemental retirement plans for fiscal 1999, 1998 and 1997:

Dollars in thousands				1999		1998		1997
Service cost			$	1,313	$	916	$	598
Interest cost				1,480		1,482		1,379
Amortization of:
	Transition obligation			303		303		303
	Prior service cost			251		251		378
	Net actuarial losses			420		322		178
		Total	$	3,767	$	3,274	$	2,836

The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for supplemental retirement plans with accumulated benefit obligations in excess of plan assets were $22.6 million, $15.3 million and $2.9 million, respectively, as of September 30, 1999; and $24.5 million, $17.2 million and $2.9 million, respectively, as of September 30, 1998.

At September 30, 1999 and 1998, the Company owned life insurance in the aggregate amounts of $51.5 million and $48.8 million, respectively, covering substantially all of the participants in the supplemental retirement plans. The Company intends to keep this life insurance in force until the demise of the participants.

Contributions are also made to multi-employer defined benefit plans administered by labor unions for certain union employees. Approximately $0.6 million, $0.4 million and $0.4 million were charged to pension expense and contributed to these plans in the years ended September 30, 1999, 1998 and 1997, respectively.

10. Contingencies

Section 1.

The Company has been named as a defendant, along with several pharmaceutical industry-related companies, in several state antitrust actions in California and Alabama and a Federal multidistrict antitrust action. The California State action purports to be a coordinated class action under California's Cartwright Act, Unfair Practices Act and Business and Professions Code. The Alabama State complaint purports to be a class action under Alabama antitrust law. The Federal class action complaint alleges that the Company and numerous manufacturers and other wholesalers violated the Sherman Act. In November 1994, the Federal court certified the class defined in the Federal class action complaint from October 15, 1989 to the present. Plaintiffs seek injunctive relief and treble damages in an amount to be determined at trial.

In October 1994, the Company entered into a sharing agreement with five other wholesalers and 26 pharmaceutical manufacturers. Among other things, the agreement provides that: (a) if a judgment is entered into against both the manufacturer and wholesaler defendants, the total exposure for joint and several liability of the Company is limited to $1.0 million; (b) if a settlement is entered into by, between, and among the manufacturer and wholesaler defendants, the Company has no monetary exposure for such settlement amount; (c) the six wholesaler defendants will be reimbursed by the 26 pharmaceutical defendants for related legal fees and expenses up to $9.0 million total (of which the Company will receive a proportionate share); and (d) the Company is to release certain claims which it might have had against the manufacturer defendants for the claims presented by the plaintiffs in these cases. The agreement covers the Federal court litigation, as well as the cases which have been filed in various state courts. In December 1994, plaintiffs in the Federal action had moved to set aside the agreement, but plaintiffs' motion was denied on April 25, 1995. In 1996, the class plaintiffs filed a motion for approval of a settlement with 12 of the manufacturer defendants, which would result in dismissal of claims against those manufacturers and a reduction of the potential claims against the remaining defendants, including those against the Company. The Court granted approval for the settlement. In 1998, an additional four of the manufacturer defendants settled. The effect of the settlements on the sharing agreement is that the Company's maximum potential loss would be $1.0 million, regardless of the outcome of the lawsuits, plus possible legal fee expenses in excess of the Company's proportionate share of the $9.0 million reimbursement of such fees or any additional amounts to be paid by the manufacturer defendants.

In September 1998, a jury trial of this action commenced in Federal Court. On November 30, 1998, the Court granted all remaining defendants a directed verdict, dismissing all class claims against the Company and other defendants. On July 13, 1999, the Court of Appeals for the Seventh Circuit affirmed the dismissal of the Company and the other wholesaler defendants from the class action litigation. Plaintiffs petition for rehearing on this issue was denied on August 9, 1999. On November 5, 1999 plaintiffs filed a petition for writ of certiorari in the United States Supreme Court. Opposition is due January 19, 2000.

In addition to the above-mentioned Federal class action and state court actions, the Company and other wholesale defendants have been added as defendants in a series of related antitrust lawsuits brought by certain independent pharmacies who have opted out of the class action cases and by certain chain drug and grocery stores. After a successful motion by the Company and other wholesalers, the damage period in these cases has been limited to October 1993 to the present. These lawsuits are also covered by the sharing agreement described above. Plaintiffs in these suits have requested remand to various federal courts nationwide for purposes of trial. A decision on the remand motion is pending, and no trial dates have been set.

A United States federal investigation of Stadtlander with respect to possible violations of the Medicare provisions of the Social Security Act is being conducted. The activities under investigation predated the ownership of Stadtlander by Counsel Corporation, the entity that sold Stadtlander to the Company. The Company has been advised that while owned by Counsel Corporation, Stadtlander cooperated fully with the authorities investigating this matter.

Stadtlander has also been named as a defendant in legal proceedings commenced in the U.S. District Court, Northern District of Texas, Dallas Division, asserting, among other things, that by entering into a transaction with a third-party, Stadtlander interfered with the plaintiff's relationship with that third-party. This proceeding is in a preliminary stage. In addition, Stadtlander is a 49% equity owner of a limited liability company formed for the purpose, among other things, of operating a specialty pharmacy business to provide services to patients diagnosed with a serious mental illness. This limited liability company is governed by an operating agreement that contains, among other things, a covenant prohibiting the members from participating in certain competing activities. In April 1999, the other member of the limited liability company brought suit in California Superior Court, San Diego County, seeking, among other things, to enjoin the PharMerica merger and to recover general, special and punitive damages from the Company. The court refused to enjoin the merger; the plaintiff's demand for damages has not yet been resolved and is in the discovery stages. Counsel Corporation has agreed to provide certain indemnification to the Company with respect to the proceedings referred to in this paragraph and the immediately preceding paragraph.

In November 1998 and February 1999, two putative securities class actions were filed against PharMerica and certain individuals in the United States District Court for the Middle District of Florida. The proposed classes consist of all persons who purchased or acquired stock of PharMerica between January 7, 1998 and July 24, 1998. The complaints seek monetary damages but do not specify an amount. In general, the complaints allege that the defendants made material omissions by withholding from the market information related to the costs associated with certain acquisitions. The complaints allege claims under Section 10(b) and 20(a) of the Securities Exchange Act of 1934. A motion to dismiss both actions was filed on March 2, 1999, and the motion is currently under review.

PharMerica is also subject to investigations, claims and suits arising out of its institutional pharmacy business, including matters relating to the repayment of monies paid to PharMerica under Medicare or Medicaid. Prior to the acquisition of PharMerica by the Company, the United States Department of Health and Human Services ("HHS"), during the course of a Medicare Audit of various nursing homes, requested PharMerica to produce records related to intravenous pharmaceuticals provided to particular nursing homes in 1997 and 1998. PharMerica cooperated with the audit and complied with the request. Subsequently, PharMerica learned that HHS auditors alleged that during the 1997-98 time frame, certain nursing homes, primarily operating in Texas, improperly billed Medicare for intravenous pharmaceuticals and related services. The government has been made aware that PharMerica did not bill the Medicare program for the goods and services it sold to nursing homes. The government has not revealed the extent of any investigation that may be ongoing against PharMerica or entities that, unlike PharMerica, billed Medicare, or any legal basis upon which to seek reimbursement from PharMerica for overpayments the government alleges the Medicare program made to customers of PharMerica.

Although the amount of liability at September 30, 1999 with respect to the proceedings referenced in Section 1 above cannot be ascertained, in the opinion of the management, any resulting liability will not have a material adverse effect on the Company's consolidated financial position, results of operations or cash flows.

Section 2.

On October 14, 1999, the Company and certain of its subsidiaries commenced an action in the Los Angeles County Superior Court of the State of California against Counsel Corporation, Stadt Holdings, Inc., and certain of their officers and directors (the "Counsel defendants") in connection with the Company's acquisition of Stadtlander Drug Co., Inc. and its subsidiaries ("Stadtlander") on January 21, 1999. In the Counsel action, the Company alleges that the defendants devised and perpetrated a joint venture scheme with the common purpose of selling Stadtlander at a grossly inflated price. The Company contends that, by means of fraudulent adjusted journal entries and related misrepresentations and omissions, the Counsel defendants provided inaccurate financial statements and other false and misleading information to the Company in order to fraudulently induce it to consummate the Stadtlander acquisition for an excessive sales price.

In its complaint, the Company asserts causes of action against the defendants under California's securities and unfair competition laws, as well as common law and statutory claims for fraud. The Company requests the imposition of a constructive trust, an accounting, restitution and disgorgement of the defendants' ill-gotten profits and other damages, as well as other relief permitted under law, in addition to pre-judgment and post-judgment interest, costs and attorneys' fees.

Certain of the defendants have made a motion to compel arbitration of the Company's claims against them. The Company has opposed the defendants' motion. The hearing on the motion is scheduled in January 2000. Apart from that motion, no other motions have been filed or served by any party to date. No discovery has been commenced by any party to date. No status conference has been noticed or conducted to date. No trial date has been set.

The Company believes its claims against the Counsel defendants have substantial merit, and intends to prosecute its claims vigorously against the Counsel defendants. However, due to the incipient stage of the litigation, its ongoing status, and the necessary uncertainties involved in all litigation, the Company does not believe it is feasible at this time to assess the likely outcome of the litigation, the timing of its resolution, or its ultimate impact, if any, on the Company's financial condition, results of operations and cash flows.

Following the Company's October 14, 1999 announcement that it would not meet analysts' consensus earnings estimates for its fourth quarter and fiscal year ended September 30, 1999, due to, in part, lower than expected results at Stadtlander and PharMerica, and following the Company's disclosures, in its complaint against the Counsel defendants, reported by the press on October 15, 1999, regarding the accounting irregularities involved in the Stadtlander acquisition, 10 purported shareholder class action lawsuits were commenced against the Company and certain of its officers and directors in federal court in California (the "Bergen securities cases").

The Bergen securities cases are purportedly brought on behalf of a class of the Company's shareholders who purchased or otherwise acquired Bergen's common stock from March 16, 1999 through October 14, 1999, and were allegedly damaged thereby. Some of the cases include two further sub-classes of persons who purchased or otherwise acquired the Company's common stock in connection with its acquisition of its wholly-owned subsidiary, PharMerica, Inc. ("PharMerica"), and of persons who were holders of record of PharMerica stock as of March 12, 1999, and were thereby entitled to vote, pursuant to the Company's Proxy Statement/Prospectus issued in connection with the PharMerica merger. The purported classes in a few of the cases may also consist of persons who purchased or otherwise acquired Bergen securities from September 9, 1998, through October 14, 1999.

The Bergen securities cases assert, among other things, various similar claims under sections 11, 12 and 15 of the Securities Act of 1933 and sections 10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934, and Rules 10b-5 and 14a-9 thereunder. In general, the Bergen securities cases allege that the Company and certain of its officers and directors made material omissions and unspecified misrepresentations in their PharMerica Proxy Statement/Prospectus, and in other public statements prior to October 14, 1999 (the end of the purported class period), by failing to disclose accounting irregularities and other fraudulent manipulations of Stadtlander's books and records which, they allege, would likely have had an material impact on the value of the Company's stock.

In addition to the Bergen securities cases, two separate lawsuits alleging violations of certain federal securities have been commenced in federal court in California, and another lawsuit has been commenced in federal court in Delaware, that name as defendants, along with the Company and certain of its officers and directors, Bergen Capital Trust I (the "Trust"), a wholly-owned subsidiary of the Company, as well as various investment banks (the "Trust securities cases").

The Trust securities cases are purportedly brought on behalf of a class of persons who purchased shares of the Trust's Preferred Securities pursuant to the May 26, 1999 offering of such securities, including, in two of the cases, persons who thereafter acquired any such Preferred Securities on the open market prior to October 14, 1999.

The Trust securities cases assert, among other things, claims under sections 11, 12 and 15 of the Securities Act of 1933, including, in two of the cases, among other things, claims under sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. In general, the Trust securities cases contend that the Trust and the Company failed to fulfill a purported duty to disclose in the Company's 1999 Registration Statement, and in related offering materials with respect to the issuance of the Trust's Preferred Securities, that the financial data provided by the Company was supposedly unreliable because Stadtlander was suffering from accounting irregularities as a result of the fraud of the Counsel defendants.

The Plaintiffs in the Bergen securities cases and the Trust securities cases seek damages in an unspecified amount, and/or rescission, as well as pre-judgment and post-judgment interest, costs and attorneys' fees. The plaintiffs in the Bergen securities cases have jointly moved to consolidate their cases into a single action in the Southern Division of the United States District Court for the Central District of California, and for appointment of "lead plaintiffs" in the United States District Court for the District of Delaware, under the Private Securities Litigation Reform Act of 1995. At this juncture, based upon current information, the Company anticipates that these motions will be granted, and that it will not be required to respond to any of the actions until after the filing of an amended consolidated complaint. No discovery has been commenced by any party to date. No status conferences have been noticed or conducted to date in any of the actions. No trial dates have been set in any of the actions.

The Company intends to vigorously defend against the claims asserted in the various purported shareholder class action lawsuits.

The proceedings referenced in Section 2 are in their early stages and little or no discovery has been completed. The Company does not believe it is currently feasible to predict or determine the outcome or resolution of these proceedings, or to estimate the amounts of, or potential range of, loss, if any, with respect to these proceedings.

11. Special Items

During fiscal 1999, the Company recorded a special non-cash pre-tax provision of $53.7 million for doubtful receivables at its PharMerica ($46.0 million) and Stadtlander ($7.7 million) subsidiaries, principally relating to pre-acquisition receivables and the adverse effect of Medicare PPS on PharMerica's customer base. These amounts are included in the provision for doubtful receivables in the statements of consolidated earnings.

During fiscal 1998, the Company recorded a special non-cash pre-tax charge of $87.3 million for writedown of BBMC goodwill related to certain acquisitions made prior to September 1995, resulting from a realized impairment to the carrying value of BBMC's long-lived assets. In addition to the goodwill writedown, the Company recorded a pre-tax charge of $3.0 million for BBMC restructuring expenses which represent severance costs associated with streamlining and refocusing the sales organization and costs associated with the consolidation of four divisions to improve efficiency and customer service. Other special charges recorded during fiscal 1998 include a non-cash pre-tax charge of $5.3 million related to the abandonment of capitalized software as a result of technology improvements; and a pre-tax charge of $14.6 million related primarily to the terminated merger with Cardinal Health, Inc.

During fiscal 1997, the Company recorded a pre-tax charge of $5.8 million for expenses related to the proposed merger with IVAX Corporation which was terminated on March 20, 1997.

Following is a summary of the special items recorded by the Company in the last three fiscal years:

		Years Ended September 30,
In thousands			1999			1998			1997
Doubtful receivables		$	(53,700	)	$	-		$	-
Goodwill writedown			-			(87,271	)		-
Restructuring expenses			-			(3,034	)		-
Abandoned capitalized software			-			(5,307	)		-
Merger-related expenses			-			(14,635	)		(5,800	)
	Total special items		(53,700	)		(110,247	)		(5,800	)
Tax effect of special items			21,211			9,421			2,378
	Effect on net earnings	$	(32,489	)	$	(100,826	)	$	(3,422	)

12. Disclosures About Fair Value of Financial Instruments

The recorded amounts of the Company's cash and cash equivalents, accounts and notes receivable, noncurrent receivables, accounts payable, commercial paper and the revolving bank loan payable, the 6 7/8 % Debentures and the 7% Debentures at September 30, 1999 approximate fair value. The fair values of the Company's 7 3/8% Notes, 7 1/4% Notes, 8 3/8% Notes and 7.80% Preferred Securities are estimated as follows, based on the market prices of these instruments as of September 30, 1999:

Dollars in thousands	Recorded Amount		Fair Value
7 3/8 % Notes	$	149,633	$	139,708
7 1/4 % Notes		99,802		86,718
8 3/8 % Notes		308,119		218,764
7.80% Preferred Securities		300,000		168,000

13. Business Segment Information

The Company is organized based upon the products and services it provides to its customers. The Company's operating segments have been aggregated into three reportable segments: Pharmaceutical Distribution, Pharmaceutical Services, and Other Businesses.

The Pharmaceutical Distribution segment includes BBDC, ASD and a repackaging facility. This segment sells pharmaceuticals, over-the-counter medicines, health and beauty aids, and other health-related products to hospitals, managed care facilities, retail pharmacies, and food/drug combination stores. In addition, specialty pharmaceutical products are sold to physicians, clinics and other providers in the nephrology, oncology, plasma and vaccines sectors. This segment also provides promotional, inventory management and information services to its customers.

The Pharmaceutical Services segment includes PharMerica, Stadtlander, and Medi-Mail. This segment provides institutional pharmacy products and services to patients in long-term care and alternate site settings, including skilled nursing facilities, assisted living facilities, residential living communities, and corrections facilities. It also provides mail order and on-line pharmacy services to injured workers who are receiving workers' compensation benefits, homebound catastrophically-ill patients, and other consumers.

The Other Businesses segment principally consists of BBMC, which distributes medical and surgical products to hospitals and alternate site facilities. This segment also includes three smaller entities: ICS, which provides commercial outsourcing to healthcare product manufacturers; Lash, which provides healthcare reimbursement consulting services; and Choice, which provides software to healthcare providers.

All of the Company's operations are located in the United States or the Commonwealth of Puerto Rico.

The following tables present segment information for the past three fiscal years (dollars in thousands):

		Net Sales and Other Revenues
Years Ended September 30,			1999			1998		1997
Pharmaceutical Distribution		$	15,902,735		$	12,936,277	$	10,906,380
Pharmaceutical Services			866,556			904		-
Other Businesses			892,748			781,277		751,496
Corporate			692			1,559		1,251
Intersegment Eliminations			(417,826	)		-		-
	Revenue excluding bulk shipments		17,244,905			13,720,017		11,659,127
Bulk shipments of pharmaceuticals
	to customers' warehouses		4,000,633			3,401,651		2,837,646
Total net sales and other revenues		$	21,245,538		$	17,121,668	$	14,496,773

Management evaluates segment performance based on revenues excluding bulk shipments to customers' warehouses. For further information regarding the nature of bulk shipments, see Note 1.

			Operating Earnings
			LIFO, Including Special Items
Years Ended September 30,				1999			1998			1997
Pharmaceutical Distribution			$	307,813		$	269,405		$	206,293
Pharmaceutical Services				(53,122	)		(253	)		-
Other Businesses				5,892			(84,667	)		12,431
Corporate				(52,530	)		(78,586	)		(49,492	)
	Total operating earnings, LIFO
		basis including special items		208,053			105,899			169,232
Interest expense				(74,143	)		(39,996	)		(30,793	)
	Earnings before taxes on income
		and distributions on preferred
		securities of subsidiary trust	$	133,910		$	65,903		$	138,439

			Operating Earnings
			FIFO, Excluding Special Items
Years Ended September 30,				1999			1998			1997
Pharmaceutical Distribution			$	325,976		$	264,105		$	198,243
Pharmaceutical Services				578			(253	)		-
Other Businesses				6,257			5,999			12,811
Corporate				(52,530	)		(58,644	)		(43,692	)
	Total operating earnings, FIFO
		basis excluding special items		280,281			211,207			167,362
LIFO (charges) credits				(18,528	)		4,939			7,670
Special items				(53,700	)		(110,247	)		(5,800	)
	Total operating earnings, LIFO
		basis including special items	$	208,053		$	105,899		$	169,232

Segment operating profit is evaluated on both a FIFO and LIFO basis, and both including and excluding special items. Accordingly, two presentations are shown in the tables above. Certain corporate office expenses of a direct operational nature are charged to the segments, but general corporate overhead is not allocated. Also, interest expense is not allocated to the segments.

The Pharmaceutical Distribution segment incurred a LIFO charge of $18,163 in fiscal 1999 and LIFO credits of $5,300 and $8,050 in fiscal 1998 and 1997, respectively. Other Businesses incurred LIFO charges of $365, $361 and $380 in fiscal 1999, 1998 and 1997, respectively.

The Pharmaceutical Services segment incurred a special for doubtful receivables provision of $53,700 in fiscal 1999, principally related to pre-acquisition receivables of PharMerica and Stadtlander and the adverse effect of Medicare PPS on PharMerica's customer base. Other Businesses incurred special charges of $87,271 for the writedown of goodwill and $3,034 for restructuring expenses in fiscal 1998. Corporate incurred a special charge of $5,307 for the abandonment of capitalized software in fiscal 1998 and special charges of $14,635 and $5,800 for merger-related expenses in fiscal 1998 and 1997, respectively.

		Identifiable Assets
Years Ended September 30,			1999		1998		1997
Pharmaceutical Distribution		$	3,106,896	$	2,511,424	$	2,154,861
Pharmaceutical Services			1,905,805		1,103		-
Other Businesses			355,082		323,447		378,106
Corporate			167,638		167,238		174,156
	Total assets	$	5,535,421	$	3,003,212	$	2,707,123

Segment assets consist principally of accounts receivable, inventory, property, goodwill and other intangibles, and certain prepaid expenses and other assets. Corporate assets consist principally of cash, income taxes receivable, deferred taxes, and certain other assets.

		Depreciation & Amortization
Years Ended September 30,			1999		1998		1997
Pharmaceutical Distribution		$	28,695	$	28,959	$	32,126
Pharmaceutical Services			29,027		6		-
Other Businesses			5,410		5,503		5,801
Corporate			2,899		2,997		2,829
	Total depreciation and amortization	$	66,031	$	37,465	$	40,756

Depreciation and amortization includes depreciation and amortization of property and intangible assets, as shown on the accompanying statements of consolidated cash flows.

		Property Acquisitions
Years Ended September 30,			1999		1998		1997
Pharmaceutical Distribution		$	22,974	$	14,750	$	15,165
Pharmaceutical Services			23,786		-		-
Other Businesses			5,722		12,757		6,951
Corporate			4,648		2,276		1,690
	Total property acquisitions	$	57,130	$	29,783	$	23,806

Corporate property acquisitions in fiscal 1999 include leasehold improvements, equipment and furniture purchased in connection with a relocation of certain personnel to a new facility in Orange, California.

14. Subsequent Events

In December 1999, the Company's Credit Agreement and Credit Facility were amended to, among other things, (a) allow the Company or any of its subsidiaries to sell, transfer or convey certain trade receivables which would result in aggregate proceeds not to exceed $400 million, and (b) modify certain financial covenants.

On December 17, 1999, the Company entered into an asset securitization program with a bank which provides additional borrowing capacity for the Company (the "Asset Securitization Program"). The initial funded amount is $200 million, which the Company is working to increase to $300 million in the second quarter of fiscal 2000. Through the Asset Securitization Program, the Company's Bergen Brunswig Drug Company subsidiary will sell, on an ongoing basis, accounts receivable generated by certain of its divisions to a special purpose subsidiary. That special purpose subsidiary will, in turn, sell such receivables to banking institutions.

INDEPENDENT AUDITORS' REPORT

To the Directors and Shareowners of
Bergen Brunswig Corporation:

We have audited the accompanying consolidated balance sheets of Bergen Brunswig Corporation and subsidiaries as of September 30, 1999 and 1998, and the related statements of consolidated earnings, shareowners' equity, and cash flows for each of the three years in the period ended September 30, 1999. These consolidated 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 in accordance with generally accepted auditing standards. Those standards 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Bergen Brunswig Corporation and subsidiaries as of September 30, 1999 and 1998, and the results of their operations and their cash flows for each of the three years in the period ended September 30, 1999, in conformity with generally accepted accounting principles.

/s/ Deloitte & Touche LLP

Costa Mesa, California

November 3, 1999 (except for Note 14 as to which the date is December 17, 1999)

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ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
	ACCOUNTING AND FINANCIAL DISCLOSURE
	None.

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PART III

ITEM 10. DIRECTORS OF THE REGISTRANT

The registrant incorporates by reference herein information to be set forth in its definitive proxy statement for its 2000 annual meeting of shareowners that is responsive to the information required with respect to this Item. If such proxy statement is not mailed to shareowners and filed with the Securities and Exchange Commission within 120 days after the end of the registrant's most recently completed fiscal year, the registrant will provide such information by means of an amendment to this Annual Report on Form 10-K.

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ITEM 11. EXECUTIVE COMPENSATION

The registrant incorporates by reference herein information to be set forth in its definitive proxy statement for its 2000 annual meeting of shareowners that is responsive to the information required with respect to this Item. If such proxy statement is not mailed to shareowners and filed with the Securities and Exchange Commission within 120 days after the end of the registrant's most recently completed fiscal year, the registrant will provide such information by means of an amendment to this Annual Report on Form 10-K.

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ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
	MANAGEMENT

The registrant incorporates by reference herein information to be set forth in its definitive proxy statement for its 2000 annual meeting of shareowners that is responsive to the information required with respect to this Item. If such proxy statement is not mailed to shareowners and filed with the Securities and Exchange Commission within 120 days after the end of the registrant's most recently completed fiscal year, the registrant will provide such information by means of an amendment to this Annual Report on Form 10-K.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The registrant incorporates by reference herein information to be set forth in its definitive proxy statement for its 2000 annual meeting of shareowners that is responsive to the information required with respect to this Item. If such proxy statement is not mailed to shareowners and filed with the Securities and Exchange Commission within 120 days after the end of the registrant's most recently completed fiscal year, the registrant will provide such information by means of an amendment to this Annual Report on Form 10-K.

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PART IV

ITEM 14.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
	FORM 8-K

(a)	Documents filed as part of this report:
	1.	Financial Statements
			The following Consolidated Financial Statements of
		Bergen Brunswig Corporation and Subsidiaries are included in Part II, Item 8:
			Statements of Consolidated Earnings for the Years
				Ended September 30, 1999, 1998 and 1997
			Consolidated Balance Sheets, September 30, 1999
				and 1998
			Statements of Consolidated Shareowners' Equity for
				the Years Ended September 30, 1999, 1998 and 1997
			Statements of Consolidated Cash Flows for the Years
				Ended September 30, 1999, 1998 and 1997
			Notes to Consolidated Financial Statements
			Independent Auditors' Report
	Financial statements and schedules not listed are omitted because of the absence of the conditions under which they are required or because all material information is included in the consolidated financial statements or notes thereto.

ITEM 14.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
	FORM 8-K (Continued)

3.	Exhibits
	*2		Agreement and Plan of Merger dated as of January 11, 1999 by and among Bergen Brunswig Corporation, Peacock Merger Corp. and PharMerica, Inc. is set forth as Annex A to the Company's Registration Statement on Form S-4 (file no. 333-74445) dated as of March 16, 1999.
	*3	(a)	Certificate of Amendment to the Restated Certificate of Incorporation dated May 7, 1999, and the Restated Certificate of Incorporation, as amended, is set forth as Exhibit 3 in the Company's Quarterly Report of Form 10-Q for the quarter ended March 31, 1999.
	3	(b)	The By-laws as amended and restated, dated November 13, 1998, as amended November 2, 1999.
	*4	(a)	The Indenture for Senior Debt Securities and Indenture for Subordinated Debt Securities, both dated as of May 14, 1999, between the Company and Chase Manhattan Bank and Trust Company, National Association, as Trustee are set forth as Exhibits 4.5 and 4.6 to the Company's Registration Statement on Form S-3/A dated May 14, 1999 (file no. 333-74349)
	*4	(b)	The Senior Indenture for $400,000,000 of Debt Securities dated as of December 1, 1992 between the Company and Chemical Trust Company of California as Trustee is set forth as Exhibit 4.1 to the Company's Registration Statement on Form S-3 dated December 1, 1992 (file no. 33-55136).
			The Company agrees to furnish to the Securities and Exchange Commission, upon request, a copy of each instrument with respect to other issues of long-term debt of the Company, the authorized principal amount of which does not exceed 10% of the total assets of the Company on a consolidated basis.
	4	(c)	Amended and Restated Rights Agreement, dated as of December 17, 1999, between Bergen Brunswig Corporation and Chase Mellon Shareholder Services, Inc., as Rights Agent, including all exhibits thereto.
	*10	(a)	Bergen Brunswig Corporation 1999 Non-Employee Directors' Stock Plan.
	*10	(b)	Bergen Brunswig Corporation 1999 Management Stock Incentive Plan.
	*10	(c)	Bergen Brunswig Corporation 1999 Deferred Compensation Plan

ITEM 14.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
	FORM 8-K (Continued)

3.	Exhibits (Continued)
	*10	(d)	Bergen Brunswig Corporation 1999 Management Stock Accumulation Plan.
	*10	(e)	Bergen Brunswig Corporation 1999 Employee Stock Purchase Plan
			Exhibits 10(a), 10(b), 10(c), 10(d) and 10(e) are set forth as Annexes E, F, G, H and I respectively, to the Company's Registration Statement on Form S-4 (file no. 333-7445) dated as of March 16, 1999.
	*10	(f)	Amended and Restated Credit Agreement dated as of September 30, 1994, as amended by the First Amendment dated as of February 27, 1995, the Second Amendment dated as of March 15, 1996, the Third Amendment dated as of October 23, 1998 and the Fourth Amendment (including Joinder Agreement with PharMerica, Inc.) dated as of April 23, 1999, among Bergen Brunswig Drug Company, Bergen Brunswig Corporation and Bank of America National Trust and Savings Association.
	*10	(g)	Credit Agreement (including Joinder Agreement with PharMerica, Inc.) dated as of April 23, 1999, among Bergen Brunswig Drug Company, Bergen Brunswig Corporation, Bank of America National Trust and Savings Association.
	*10	(h)	Commercial Paper Dealer Agreement 4(2) Program dated as of April 19, 1999 and Private Placement Memorandum dated May 1999 between Bergen Brunswig Corporation and Chase Securities, Inc.
			Exhibits 10(f), 10(g) and 10(h) are set forth as Exhibits 10(e), 10(f) and 10(g), respectively, to the Company's Quarterly Report of Form 10-Q for the quarter ended March 31, 1999.
	*10	(i)	Bergen Brunswig Corporation Deferred Compensation Plan.
	*10	(j)	Director Indemnification Agreement and Amendment to Director Indemnification Agreement.
	*10	(k)	Bergen Brunswig Corporation Bonus Plan as adopted September 1, 1977 and amended October 19, 1990.
	*10	(l)	Amended and Restated 1989 Stock Incentive Plan of Bergen Brunswig Corporation and Subsidiary Companies.

ITEM 14.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
	FORM 8-K (Continued)

3.	Exhibits (Continued)
	*10	(m)	Retired Officers' Medical Plan
			Exhibit 10(k), 10(l) and 10(m) are set forth as Exhibits 10(e), 10(g) and 10(o) in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1997.
	*10	(n)	Bergen Brunswig Corporation Stock Option Plans, other than the Amended and Restated 1989 Stock Incentive Plan and the 1999 Management Stock Incentive Plan.
	*10	(o)	Form of Amended and Restated Capital Accumulation Plan is set forth as Exhibit 10.2 in the Company's Registration Statement on Form S-3 and Amendment No. 1 thereto relating to a shelf offering of $400 million in securities filed February 1, 1996 and March 19, 1996, respectively (file no. 333-631).
	*10	(p)	Amended and Restated Supplemental Executive Retirement Plan dated September 24, 1998.
	*10	(q)	Amendment No. 1 to the Amended and Restated Capital Accumulation Plan is set forth as Exhibit 10(m) in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1996.
	*10	(r)	Amended and Restated Executive Loan Program dated March 3, 1995 is forth as Exhibit 10(g) in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1995.
	*10	(s)	Employment Agreement and Schedule.
	*10	(t)	Severance Agreement and Schedule
			Exhibits 10(s) and 10(t) above are set forth as Exhibit 10(q) and 10(r) in the Company's Annual Report of Form 10-K for the fiscal year ended September 30, 1994.
	*10	(u)	Stock Purchase Agreement, dated as of November 8, 1998, by and among Stadtlander Drug Co., Counsel Corporation, Stadt Holdings Inc., and the Company is set forth as Exhibit 2.1 to the Company's Report on Schedule 13D, dated November 18, 1998, filed with respect to PharMerica, Inc.
	*10	(v)	Indenture dated March 13, 1998 related to PharMerica's 8 3/8% Senior Subordinated Notes is set forth as Exhibit 4.9 to PharMerica's Registration Statement on Form S-4 filed May 15, 1998.

ITEM 14.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
	FORM 8-K (Continued)

	3.	Exhibits (Continued)
		21		List of subsidiaries of Bergen Brunswig Corporation.
		23		Independent Auditors' Consent.
		24		Power of Attorney is set forth on the Signature pages in Part IV of this Annual Report.
		27		Financial Data Schedule for the year ended September 30, 1999.
		99	(a)	Statement Regarding Forward-Looking Information.
		*99	(b)	Split Dollar Life Insurance Plan with Robert E. Martini is set forth as Exhibit 99(b) in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1997.
		*99	(c)	Item 1 - Legal Proceedings of Part II of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994, are incorporated herein by reference in Part I, Item 3 of this Annual Report.
*	Document has heretofore been filed with the Securities and Exchange Commission and is incorporated herein by reference and made a part hereof.
**	Incorporated herein by reference to the exhibits filed as part of the Company's Registration Statement on Form S-3 (Registration No. 33-5530) and Amendment Nos. 1 and 2 thereto relating to an offering of $43,000,000 principal amount of 6 7/8% Exchangeable Subordinated Debentures due 2011, filed with the Securities and Exchange Commission on May 8, July 1, and July 8, 1986, respectively.
(b)	Reports on Form 8-K:
	On July 13, 1999, a Current Report on Form 8-K, dated 7, 1999, was filed, reporting under Items 5 and 7, that the Company had issued a press release announcing preliminary third quarter results.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	BERGEN BRUNSWIG CORPORATION
December 29, 1999	By /s/	Robert E. Martini
		Robert E. Martini
		Chairman of the Board and
		Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears below, hereby constitutes and appoints Robert E. Martini and Milan A. Sawdei and each of them singly, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including pre-effective amendments and post-effective amendments) to this Annual Report on Form 10-K, and to file the same with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

SIGNATURE		TITLE	DATE
/s/	Robert E. Martini	Chairman of the Board	December 29, 1999
	Robert E. Martini	and Chief Executive Officer
/s/	Neil F. Dimick	Executive Vice President,	December 29, 1999
	Neil F. Dimick	Chief Financial Officer
		and Director (Principal
		Financial Officer and
		Principal Accounting Officer)

SIGNATURE		TITLE	DATE
/s/	Jose E. Blanco, Sr.	Director	December 29, 1999
	Jose E. Blanco, Sr.
/s/	Rodney H. Brady	Director	December 29, 1999
	Rodney H. Brady
/s/	Charles C. Edwards, M.D.	Director	December 29, 1999
	Charles C. Edwards, M.D.
/s/	Charles J. Lee	Director	December 29, 1999
	Charles J. Lee
/s/	George R. Liddle	Director	December 29, 1999
	George R. Liddle
/s/	Brent R. Martini	Director	December 29, 1999
	Brent R. Martini
/s/	James R. Mellor	Director	December 29, 1999
	James R. Mellor
/s/	George E. Reinhardt, Jr.	Director	December 29, 1999
	George E. Reinhardt, Jr.
		Director	December 29, 1999
	Donald R. Roden
/s/	Francis G. Rodgers	Director	December 29, 1999
	Francis G. Rodgers

INDEX TO EXHIBITS
EXHIBIT NO.		PAGE NO.
*2	Agreement and Plan of Merger dated as of January 11, 1999 by and among Bergen Brunswig Corporation, Peacock Merger Corp. and PharMerica, Inc. is set forth as Annex A to the Company's Registration Statement on Form S-4 (file no. 333-74445) dated as of March 16, 1999.
*3(a)	Certificate of Amendment to the Restated Certificate of Incorporation dated May 7, 1999, and the Restated Certificate of Incorporation, as amended, is set forth as Exhibit 3 in the Company's Quarterly Report of Form 10-Q for the quarter ended March 31, 1999.
3(b)	The By-laws as amended and restated, dated November 13, 1998 as amended November 2, 1999.	90
*4(a)	The Indenture for Senior Debt Securities and Indenture for Subordinated Debt Securities, both dated as of May 14, 1999, between the Company and Chase Manhattan Bank and Trust Company, National Association, as Trustee are set forth as Exhibits 4.5 and 4.6 to the Company's Registration Statement on Form S-3/A dated May 14, 1999 (file no. 333-74349)
*4(b)	The Senior Indenture for $400,000,000 of Debt Securities dated as of December 1, 1992 between the Company and Chemical Trust Company of California as Trustee is set forth as Exhibit 4.1 to the Company's Registration Statement on Form S-3 dated December 1, 1992 (file no. 33-55136).
	The Company agrees to furnish to the Securities and Exchange Commission, upon request, a copy of each instrument with respect to other issues of long-term debt of the Company, the authorized principal amount of which does not exceed 10% of the total assets of the Company on a consolidated basis.
4(c)	Amended and Restated Rights Agreement, dated as of December 17, 1999, between Bergen Brunswig Corporation and Chase Mellon Shareowners Services, Inc., Rights Agent, including all exhibits thereto.	111
*10(a)	Bergen Brunswig Corporation 1999 Non-Employee Directors' Stock Plan.
*10(b)	Bergen Brunswig Corporation 1999 Management Stock Incentive Plan.

*10(c)	Bergen Brunswig Corporation 1999 Deferred Compensation Plan.
*10(d)	Bergen Brunswig Corporation 1999 Management Stock Accumulation Plan.
*10(e)	Bergen Brunswig Corporation 1999 Employee Stock Purchase Plan
	Exhibits 10(a), 10(b), 10(c), 10(d) and 10(e) are set forth as Annexes E, F, G, H and I respectively, to the Company's Registration Statement on Form S-4 (file no. 333-7445) dated as of March 16, 1999.
*10(f)	Amended and Restated Credit Agreement dated as of September 30, 1994, as amended by the First Amendment dated as of February 27, 1995, the Second Amendment dated as of March 15, 1996, the Third Amendment dated as of October 23, 1998 and the Fourth Amendment (including Joinder Agreement with PharMerica, Inc.) dated as of April 23, 1999, among Bergen Brunswig Drug Company, Bergen Brunswig Corporation and Bank of America National Trust and Savings Association.
*10(g)	Credit Agreement (including Joinder Agreement with PharMerica, Inc.) dated as of April 23, 1999, among Bergen Brunswig Drug Company, Bergen Brunswig Corporation, Bank of America National Trust and Savings Association.
*10(h)	Commercial Paper Dealer Agreement 4(2) Program dated as of April 19, 1999 and Private Placement Memorandum dated May 1999 between Bergen Brunswig Corporation and Chase Securities, Inc.
	Exhibits 10(f), 10(g) and 10(h) are set forth as Exhibits 10(e), 10(f) and 10(g), respectively, to the Company's Quarterly Report of Form 10-Q for the quarter ended March 31, 1999.
**10(i)	Bergen Brunswig Corporation Deferred Compensation Plan.
**10(j)	Director Indemnification Agreement and Amendment to Director Indemnification Agreement.
*10(k)	Bergen Brunswig Corporation Bonus Plan as adopted September 1, 1977 and amended October 19, 1990.
*10(l)	Amended and Restated 1989 Stock Incentive Plan of Bergen Brunswig Corporation and Subsidiary Companies.
*10(m)	Retired Officers' Medical Plan.
	Exhibits 10(k), 10(l) and 10(m) are set forth as Exhibits 10(e), 10(g) and 10(o) in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1997.
**10(n)	Bergen Brunswig Corporation Stock Option Plans, other than the Amended and Restated 1989 Stock Incentive Plan and the 1999 Management Stock Incentive Plan.
*10(o)	Form of Amended and Restated Capital Accumulation Plan is set forth as Exhibit 10.2 in the Company's Registration Statement on Form S-3 and Amendment No.1 thereto relating to a shelf offering of $400 million in securities filed February 1, 1996 and March 19, 1996, respectively (file no. 333-631).
*10(p)	Amended and Restated Supplemental Executive Retirement Plan dated September 24, 1998.
*10(q)	Amendment No. 1 to the Amended and Restated Capital Accumulation Plan is set forth as Exhibit 10(m) in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1996.
*10(r)	Amended and Restated Executive Loan Program dated March 3, 1995 is set forth as Exhibit 10(g) in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1995.
*10(s)	Employment Agreement and Schedule.
*10(t)	Severance Agreement and Schedule.
	Exhibits 10(s) and 10(t) above are set forth as Exhibit 10(q) and 10(r) in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1994.
*10(u)	Stock Purchase Agreement, dated as of November 8, 1998, by and among Stadtlander Drug Co., Inc., Counsel Corporation, Stadt Holdings Inc. and the Company is set forth as Exhibit 2.1 to the Company's Report on Schedule 13D, dated November 18, 1998, filed with respect to PharMerica, Inc.
*10(v)	Indenture dated March 13, 1998 related to PharMerica's 8 3/8% Senior Subordinated Notes is set forth as Exhibit 4.9 to PharMerica's Registration Statement on Form S-4 filed May 15, 1998.
21	List of subsidiaries of Bergen Brunswig Corporation.	150
23	Independent Auditors' Consent	151
24	Power of Attorney is set forth on the Signature pages in Part IV of this Annual Report.
27	Financial Data Schedule for the year ended September 30, 1999.	152
99(a)	Statement Regarding Forward-Looking Information.	153
*99(b)	Split Dollar Life Insurance Plan with Robert E. Martini is set forth as Exhibit 99(b) in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1997.
*99(c)	Item 1 - Legal Proceedings of Part II of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994, are incorporated herein by reference in Part I, Item 3 of this Annual Report.
*	Document has heretofore been filed with the Securities and Exchange Commission and is incorporated herein by reference and made a part hereof.
**	Incorporated herein by reference to the exhibits filed as part of the Company's Registration Statement on Form S-3 (Registration No. 33-5530) and Amendment Nos. 1 and 2 thereto relating to an offering of $43,000,000 principal amount of 6 7/8% Exchangeable Subordinated Debentures due 2011, filed with the Securities and Exchange Commission on May 8, July 1, and July 8, 1986, respectively.

EX-3.B

EX-4.C

Exhibit 4(c)

BERGEN BRUNSWIG CORPORATION

and

CHASEMELLON SHAREHOLDER SERVICES, INC.

(as successor to Chemical Trust Company of California)

Rights Agent

Amended and Restated

Rights Agreement

Dated as of December 17, 1999

Table of Contents
Section		Page
1.	Certain Definitions
2.	Appointment of Rights Agent
3.	Issue of Rights Certificates
4.	Form of Rights Certificates
5.	Countersignature and Registration
6.	Transfer, Split up, Combination and Exchange of Rights Certificates: Mutilated, Destroyed, Lost or Stolen Rights Certificates
7.	Exercise of Rights; Purchase Price; Expiration Date of Rights
8.	Cancellation and Destruction of Rights Certificates
9.	Reservation and Availability of Capital Stock
10.	Preferred Stock Record Date
11.	Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights
12.	Certificate of Adjusted Purchase Price or Number of Shares
13.	Consolidation, Merger or Sale or Transfer of Assets or Earning Power
14.	Fractional Rights and Fractional Shares
15.	Rights of Action
16.	Agreement of Rights Holders
17.	Rights Certificate Holder Not Deemed a Stockholder
18.	Concerning the Rights Agent
19.	Merger of Consolidation or Change of Name of Rights Agent
20.	Duties of Rights Agent
21.	Change of Rights Agent
22.	Issuance of New Rights Certificates
23.	Redemption and Termination
24.	Exchange
25.	Notice of Certain Events
26.	Notices
27.	Supplements and Amendments
28.	Successors
29.	Determinations and Actions by the Board of Directors, etc.
30.	Benefits of this Agreement
31.	Severability
32.	Governing Law
33.	Counterparts
34.	Descriptive Headings
Exhibit A	-- Form of Rights Certificate

AMENDED AND RESTATED

RIGHTS AGREEMENT

AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of December 17, 1999 (the "Agreement"), between Bergen Brunswig Corporation, a New Jersey Corporation (the "Company"), and ChaseMellon Shareholder Services, Inc. (as successor to Chemical Trust Company of California), a California banking corporation (the "Rights Agent").

W I T N E S S E T H

WHEREAS, the Company and the Rights Agent entered into a certain Rights Agreement, dated as of February 8, 1994, as amended by a certain First Amendment dated as of November 10, 1996, and by a certain Second Amendment dated August 21, 1997 (as amended, the "Original Rights Agreement"); and

WHEREAS, on February 8, 1994 (the "Rights Dividend Declaration Date"), pursuant to the Original Rights Agreement, the Board of Directors of the Company authorized and declared a dividend distribution of one Right for each share of Class A Common Stock, par value $1.50 per share, of the Company (the "Class A Common Stock") and 9.5285 Rights for each share of Class B Common Stock, par value $1.50 per share, of the Company (the "Class B Common Stock") outstanding at the close of business on February 18, 1994 (the "Record Date"), and has authorized the issuance of one Right for each share of Class A Common Stock, and 9.5285 Rights for each share of Class B Common Stock (as such numbers may hereinafter be adjusted pursuant to the provisions of Section 11(p) hereof), of the Company issued between the Record Date (whether originally issued or delivered from the Company's treasury) and the Distribution Date, each Right initially representing the right to purchase one one-hundredth of a share of Series A Junior Participating Preferred Stock of the Company having the rights, powers and preferences set forth in the Company's Restated Certificate of Incorporation, upon the terms and subject to the conditions hereinafter set forth (the "Rights");

WHEREAS, the Company desires to make certain substantive and technical amendments to the Original Rights Agreement, including without limitation elimination of references to the Class B Common Stock which is no longer outstanding, in order to improve the efficiency of its operation and enhance its effects with respect to the Company's shareowners; and

WHEREAS, the Original Rights Agreement provides that it may be amended or supplemented pursuant to Section 27 thereof if the Company so directs the Rights Agent and if the Company provides to the Rights Agent a certain certification specified therein; and

WHEREAS, the Company has so directed the Rights Agent to agree to amend and restate the Original Rights Agreement on the terms and conditions set forth herein and has provided the Rights Agent with the requisite certification pursuant to Section 27 of the Original Rights Agreement; and

NOW THEREFORE, in consideration of the foregoing premises and the mutual agreements herein set forth, the parties hereby agree that the Original Rights Agreement is hereby amended in its entirety as follows:

Section 1. Certain Definitions. For purposes of this Agreement, the following terms have the meanings indicated:

(a) "Acquiring Person" shall mean any Person who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of 15% or more of the shares of Common Stock of the Company then outstanding, but shall not include (i) the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan or (ii) any Person, together with all Affiliates and Associates of such Person, who or which would otherwise be an Acquiring Person by reason of (x) being the Beneficial Owner of shares of Common Stock of the Company, the beneficial ownership of which was acquired by such person (or a predecessor of such Person) pursuant to a transaction or series of related transactions approved by the Board of Directors before such Person (or a predecessor of such Person) otherwise became an Acquiring Person or (y) any other action or transaction which the Board of Directors determines should not, consistent with the purposes of this Agreement, cause such Person (or a predecessor of such Person) to be deemed an Acquiring Person, which determination is made by the Board of Directors prior to such Person (or a predecessor of such Person) otherwise becoming an Acquiring Person.

(b) "Affiliate" and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended and in effect on the date of this Agreement (the "Exchange Act").

(c) A Person shall be deemed the "Beneficial Owner" of, and shall be deemed to "beneficially own," any securities:

(i) which such Person or any of such Person's Affiliates or Associates, directly or indirectly, has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights exchange rights, rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed the "Beneficial Owner" of, or to "beneficially own," (A) securities tendered pursuant to a tender or exchange offer made by such Person or any of such Person s Affiliates or Associates until such tendered securities are accepted for purchase or exchange, or (B) securities issuable upon exercise of Rights at any time prior to the occurrence of a Triggering Event, or (C) securities issuable upon exercise of Rights from and after the occurrence of a Triggering Event which Rights were acquired by such Person or any of such Person's Affiliates or Associates prior to the Distribution Date or pursuant to Section 3(a) or Section 22 hereof (the "Original Rights") or pursuant to Section 11(i) hereof in connection with an adjustment made with respect to any Original Rights;

(ii) which such Person or any of such Person's Affiliates or Associates, directly or indirectly, has the right to vote or dispose of or has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange Act), including pursuant to any agreement, arrangement or understanding, whether or not in writing; provided, however, that a Person shall not be deemed the "Beneficial Owner" of, or to "beneficially own," any security under this subparagraph (ii) as a result of an agreement, arrangement or understanding to vote such security if such agreement, arrangement or understanding: (A) arises solely form a revocable proxy given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable provisions of the General Rules and Regulations under the Exchange Act, and (B) is not also then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report); or

(iii) which are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person (or any of such Person's Affiliates or Associates) has any agreement, arrangement or understanding (whether or not in writing), for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in the proviso to subparagraph (ii) of this paragraph (c)) or disposing of any voting securities of the Company; provided, however, that nothing in this paragraph (c) shall cause a person engaged in business as an underwriter of securities to be the "Beneficial Owner" of, or to "beneficially own," any securities acquired through such person's participation in good faith in a firm commitment underwriting until the expiration of forty days after the date of such acquisition.

(d) "Business Day" shall mean any day other than a Saturday, Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.

(e) "Close of business" on any given date shall mean 5:00 P.M., New York City time, on such date; provided, however, that if such date is not a Business Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business Day.

(f) "Class A Common Stock" shall mean the Class A Common Stock, par value $1.50 per share, of the Company.

(g) "Common Stock" shall mean the Class A Common Stock, except that "Common Stock" when used with reference to any Person other than the Company shall mean the capital stock of such Person with the greatest voting power, or the equity securities or other equity interest having power to control or direct the management, of such Person.

(h) "Person" shall mean any individual, firm, corporation, partnership or other entity.

(i) "Preferred Stock" shall mean shares of Series A Junior Participating Preferred Stock, without par value, of the Company, and, to the extent that there are not a sufficient number of shares of Series A Junior Participating Preferred Stock authorized to permit the full exercise of the Rights, any other series of Preferred Stock, without par value, of the Company designated for such purpose containing terms substantially similar to the terms of the Series A Junior Participating Preferred Stock.

(j) "Section 11(a)(ii) Event" shall mean any event described in Section 11(a)(ii) (A), (B) or (C) hereof.

(k) "Section 13 Event" shall mean any event described in clauses (x), (y) or (z) of Section 13(a) hereof.

(l) "Stock Acquisition Date" shall mean the first date of public announcement (which, for purposes of this definition, shall include, without limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such.

(o) "Subsidiary" shall mean, with reference to any Person, any corporation of which an amount of voting securities sufficient to elect at least a majority of the directors of such corporation is beneficially owned, directly or indirectly, by such Person, or otherwise controlled by such Person.

(p) "Triggering Event" shall mean any Section 11(a)(ii) Event or any Section 13 Event.

Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company (who, in accordance with Section 3 hereof, shall prior to the Distribution Date also be the holders of the Common Stock) in accordance with the terms and conditions hereof, and the Rights Agents hereby accepts such appointment. The Company may from time to time appoint such Co-Rights Agents as it may deem necessary or desirable.

Section 3. Issue of Rights Certificates. (a) Until the earlier of (i) the close of business on the tenth day after the Stock Acquisition Date (or, if the tenth day after the Stock Acquisition Date occurs before the Record Date, the close of business on the Record Date), or (ii) the close of business on the tenth business day (or such later date as the Board shall determine) after the date that a tender or exchange offer by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan) is first published or sent or given within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, if upon consummation thereof, such Person would be the Beneficial Owner of 15% or more of the shares of Common Stock then outstanding (the earlier of (i) and (ii) being herein referred to as the "Distribution Date"), (x) the Rights will be evidenced (subject to the provisions of paragraph (b) of this Section 3) by the certificates for the Common Stock registered in the names of the holders of the Common Stock (which certificates for Common Stock shall be deemed also to be certificates for Rights) and not by separate certificates, and (y) the Rights will be transferable only in connection with the transfer of the underlying shares of Common Stock (including a transfer to the Company). As soon as practicable after the Distribution Date, the Rights Agent will send by first-class, insured, postage prepaid mail, to each record holder of the Common Stock as of the close of business on the Distribution Date, at the address of such holder shown on the records of the Company, one or more right certificates, in substantially the form of Exhibit A hereto (the "Rights Certificates"), evidencing one Right for each share of Common Stock so held, subject to adjustment as provided herein. In the event that an adjustment in the number of Rights per share of Common Stock has been made pursuant to Section 11(p) hereof, at the time of distribution of the Right Certificates, the Company shall make the necessary and appropriate rounding adjustments (in accordance with Section 14(a) hereof) so that Rights Certificates representing only whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights. As of and after the Distribution Date, the Rights will be evidenced solely by such Rights Certificates.

(b) As promptly as practicable following the Record Date, the Company will send a copy of a Summary of Rights, in substantially the form attached hereto as Exhibit C (the "Summary of Rights"), by first-class, postage prepaid mail, to each record holder of the Common Stock as of the close of business on the Record Date, at the address of such holder shown on the records of the Company. With respect to certificates for the Common Stock outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by such certificates for the Common Stock and the registered holders of the Common Stock shall also be the registered holders of the associated Rights. Until the earlier of the Distribution Date or the Expiration Date (as such term is defined in Section 7 hereof), the transfer of any certificates representing shares of Common Stock in respect of which Rights have been issued shall also constitute the transfer of the Rights associated with such shares of Common Stock.

(c) Rights shall be issued in respect of all shares of Common Stock which are issued (whether originally issued or from the Company's treasury) after the Record Date but prior to the earlier of the Distribution Date or the Expiration Date. Certificates issued after the date of this Agreement, representing such shares of Common Stock shall also be deemed to be certificates for Rights, and shall bear the following legend:

This certificate also evidences and entitles the holder hereof to certain Rights as set forth in the Amended and Restated Rights Agreement between Bergen Brunswig Corporation (the "Company") and ChaseMellon Shareholder Services, Inc. (as successor to Chemical Trust Company of California) (the "Rights Agent") dated as of October    , 1999 (the "Amended and Restated Rights Agreement"), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal offices of the Rights Agent. Under certain circumstances, as set forth in the Amended and Restated Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate. The Rights Agent will mail to the holder of this certificate a copy of the Amended and Restated Rights Agreement, as in effect on the date of mailing, without charge promptly after receipt of a written request therefor. Under certain circumstances set forth in the Amended and Restated Rights Agreement, Rights issued to, or held by, any Person who is, was or becomes an Acquiring Person or any Affiliate or Associates thereof (as such terms are defined in the Amended and Restated Rights Agreement), whether currently held by or on behalf of such Person or by any subsequent holder, may become null and void.

With respect to such certificates containing the foregoing legend, until the earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights associated with the Common Stock represented by such certificates shall be evidenced by such certificates alone and registered holders of Common Stock shall also be the registered holders of the associated Rights, and the transfer of any of such certificates shall also constitute the transfer of the Rights associated with the Common Stock represented by such certificates.

Section 4. Form of Rights Certificates. (a) The Rights Certificates (and the forms of election to purchase and of assignment to be printed on the reverse thereof) shall each be substantially in the form set forth in Exhibit A hereto and may have such marks of identification or designation and such legends, summaries or endorsement printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform to usage. Subject to the provisions of Section 11 and Section 22 hereof, the Rights Certificates, whenever distributed, shall be dated as of the Record Date and on their face shall entitle the holders thereof to purchase such number of one one-hundredths of a share of Preferred Stock as shall be set forth therein at the price set forth therein (such exercise price per one one-hundredth of a share, the "Purchase Price"), but the amount and type of securities purchasable upon the exercise of each Right and the Purchase Price thereof shall be subject to adjustment as provided herein.

(b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interest in such Acquiring Person or to any Person with whom such acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as primary purpose or effect avoidance of Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement or adjustment of any other Rights Certificate referred to in this sentence, shall contain (to the extent feasible) the following legend:

The Rights represented by this Rights Certificate are or were beneficially owned by a Person who was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are defined in the Amended and Restated Rights Agreement). Accordingly, this Rights Certificate and the Rights represented hereby may become null and void in the circumstances specified in Section 7(e) of such Amended and Restated Rights Agreement.

Section 5. Countersignature and Registration. (a) The Rights Certificates shall be executed on behalf of the Company by its Chairman of the Board, its President, or any Vice President, either manually or by facsimile signature, and shall have affixed thereto the Company's seal or a facsimile thereof which shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature. The Rights Certificates shall be manually countersigned by the Rights Agent and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Rights Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Rights Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the person who signed such Rights Certificates had not ceased to be such officer of the Company; and any Rights Certificates may be signed on behalf of the Company by any person who, at the actual date of the execution of such Rights Certificate, shall be a proper officer of the Company to sign such Rights Certificate, although at the date of the execution of this Agreement any such person was not such an officer.

(b) Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its principal office or offices designated as the appropriate place for surrender of Rights Certificates upon exercise or transfer, books for registration and transfer of the Rights Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Rights Certificates, the number of Rights evidenced on its face by each of the Rights Certificates and the date of each of the Rights Certificates.

Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates. (a) Subject to the provisions of Section 4(b), Section 7(e) and Section 14 hereof, at any time after the close of business on the Distribution Date, and at or prior to the close of business on the Expiration Date, any Rights Certificate or Certificates may be transferred, split up, combined or exchanged for another Rights Certificate or Certificates, entitling the registered holder to purchase a like number of one one-hundredths of a share of Preferred Stock (or following a Triggering Event, Common Stock, other securities, cash or other assets, as the case may be) as the Rights Certificate or Certificates surrendered then entitled such holder (or former holder in the case of a transfer) to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Rights Certificate or Certificates shall made such request in writing delivered to the Rights Agent, and shall surrender the Rights Certificate or certificates to be transferred, split up, combined or exchanged at the principal office or offices of the Rights Agent designated for such purpose. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Rights Certificate until the registered holder shall have completed and signed the certificate contained in the form of assignment on the reverse side of such Rights certificate and shall have provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request. Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e) and Section 14 hereof, countersign and deliver to the Person entitled thereto a Rights Certificate or Rights Certificates, as the case may be, as so requested. The Company may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange or Rights Certificates.

(b) Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Rights Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and reimbursement to the Company and the Right Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Rights Certificate if mutilated, the Company will execute and deliver a new Rights Certificate of like tenor to the Rights Agent for countersignature and delivery to the registered owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.

Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. (a) Subject to Section 7(e) hereof, the registered holder of any Rights Certificate may exercise the Rights evidence thereby (except as may exercise the Rights evidenced thereby (except as otherwise provided herein including, without limitation, the restrictions on exercisabilitly set forth in Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or in part at any time after the Distribution Date upon surrender of the Rights Certificate, with the form of election to purchase and the certificate on the reverse side thereof duly executed, to the Rights Agent at the principal office or offices of the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price with respect to the total number of one-one-hundredths of a share (or other securities, cash or other assets, as the case may be) as to which such surrendered Rights are then exercisible, at or prior to the earlier of (i) the close of business on February 18, 2004, (the "Final Expiration Date"), or (ii) the time at which the Rights are redeemed as provided in Section 23 hereof (the earlier of (i) and (ii) being herein referred to as the "Expiration Date").

(b) The Purchase Price for each one one-hundredth of a share of Preferred Stock pursuant to the exercise of a Right shall initially be $80.00, and shall be subject to adjustment from time to time as provided in Sections 11 and 13(a) hereof and shall be payable in accordance with paragraph (c) below.

(c) Upon receipt of a Rights certificate representing exercisable Rights, with the form of election to purchase and the certificate duly executed, accompanied by payment, with respect to each Right so exercised, of the Purchase Price per one one-hundredth of a share of Preferred Stock (or other shares, securities, cash or other assets, as the case may be) to be purchased as set forth below and an amount equal to any applicable transfer tax, the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i)(A) requisition from any transfer agent of the shares of Preferred Stock (or make available, if the Rights Agent is the transfer agent for such shares) certificates for the total number of one one-hundredths of a share of Preferred Stock to be purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) if the Company shall have elected to deposit the total number of shares of Preferred Stock issuable upon exercise of the Rights hereunder with a depositary agent, requisition from the depositary agent depositary receipts representing such number of one one-hundredths of a share of Preferred Stock as are to be purchased (in which case certificates for the shares of Preferred Stock represented by such receipts shall be deposited by the transfer agent with the depositary agent) and the Company will direct the depositary agent to comply with such request (ii) requisition from the Company the amount of cash, if any, to be paid in lieu of fractional shares in accordance with Section 14 hereof, (iii) after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order of the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon the order of the registered holder of such Rights Certificate. The payment of the Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii) hereof, shall be made in cash or by certified bank check or bank draft payable to the order of the Company. In the event that the Company is obligated to issue other securities (including Common Stock) of the Company, pay cash and/or distribute other property pursuant to Section 11(a) hereof, the Company will make all arrangements necessary so that such other securities, cash and/or other property are available for distribution by the Rights Agent, if and when appropriate. The Company reserves the right to require prior to the occurrence of a Triggering Event that, upon any exercise of Rights, a number of Rights be exercised so that only whole shares of Preferred Stock would be issued.

(d) In case the registered holder of any Rights Certificate shall exercise less than all the Rights evidenced thereby, a new Rights Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the order of, the registered holder of such Rights Certificate, registered in such name or names as may be designed by such holder, subject to the provisions of Section 14 hereof.

(e) Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or an Associates or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 7(e), shall become null and void without any further action and no holder of such Rights shall have any rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. The Company shall use all reasonable efforts to insure that the provisions of this Section 7(e) and Section 4(b) hereof are complied with, but shall have no liability to any holder of Rights Certificates or other Person as a result of its failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder.

(f) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder upon the occurrence of any purported exercise as set forth in this Section 7 unless such registered holder shall have (i) completed and signed the certificate contained in the form of election to purchase set forth on the reverse side of the Rights Certificate surrendered for such exercise, and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request.

Section 8. Cancellation and Destruction of Rights Certificates. All Rights Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or any of its agents, be delivered to the Rights Agent for cancellation or in canceled forms, or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Rights Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all canceled Rights Certificates to the Company, or shall, at the written request of the Company, destroy such canceled Rights Certificates, and in such case shall deliver a certificate of destruction thereof to the Company.

Section 9. Reservation and Availability of Capital Stock. (a) The Company covenants and agrees that, at or prior to the Expiration Date, it will cause to be reserved and kept available out of its authorized and unissued shares of Preferred Stock (and, following the occurrence of a Triggering Event, out of its authorized and unissued shares of Common Stock and/or other securities or out of its authorized and issued shares held in its treasury), the number of shares of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock and/or other securities) that, as provided in this Agreement including Section 11(a)(iii) hereof, will be sufficient to permit the exercise in full of all outstanding Rights.

(b) So long as the shares of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock and/or other securities) issuable and deliverable upon the exercise of the Rights may be listed on any national securities exchange, the Company shall use its best efforts to cause, from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed on such exchange upon official notice of issuance upon such exercise.

(c) The Company shall use its best efforts to (i) file, as soon as practicable following the earliest date after the first occurrence of a Section 11(a)(ii) Event on which the consideration to be delivered by the Company upon exercise of the Rights has been determined in accordance with Section 11(a)(iii) hereof, a registration statement under the Securities Act of 1933 ("the Act"), with respect to the securities purchasable upon exercise of the rights on an appropriate form, (ii) cause such registration statement to become effective as soon as practicable after such filing, and (iii) cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for such securities, and (B) the date of the expiration of the Rights. The Company will also take such action as may be appropriate under, or to ensure compliance with, the securities or "blue sky" laws of the various states in connection with the exercisability of the Rights. The Company may temporarily suspend, for a period of time not to exceed ninety (90) days after the date set forth in clause (i) of the first sentence of this Section 9(c), the exercisability of the Rights in order to prepare and file such registration statement and permit it to become effective. Upon any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. In addition, if the Company shall determine that a registration statement is required following the Distribution Date, the Company may temporarily suspend the exercisability of the Rights until such time as a registration statement has been declared effective. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction if the requisite qualification in such jurisdiction shall not have been obtained, the exercise thereof shall not be permitted under applicable law or a registration statement shall not have been declared effective.

(d) The Company covenants and agrees that it will take all such action as may be necessary to ensure that all one one-hundredths of a share of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock and/or other securities) delivered upon exercise of Rights shall, at the time of delivery of the certificates for such shares (subject to payment of the Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable.

(e) The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect of the issuance or delivery of the Rights Certificates and of any certificates for a number of one one-hundredths of a share of Preferred Stock (or Common Stock and/or other securities, as the case may be) upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax which may be payable in respect of any transfer or delivery of Rights Certificates to a Person other than, or the issuance or delivery of a number of one one-hundredths of a share of Preferred Stock (or Common Stock and/or other securities, as the case may be) in respect of a name other than that of, the registered holder of the Rights Certificates evidencing Rights surrendered for exercise or to issue or deliver any certificates for a number of one one-hundredths of a share of Preferred Stock (or Common Stock and/or other securities, as the case may be) in a name other than that of the registered holder upon the exercise of any Rights until such tax shall have been paid (any such tax being payable by the holder of such Rights Certificate at the time of surrender) or until it has been established to the Company's satisfaction that no such tax is due.

Section 10. Preferred Stock Record Date. Each person in whose name any certificate for a number of one one-hundredths of a share of Preferred Stock (or Common Stock and/or other securities, as the case may be) represented thereby on, and such certificate shall be dated, the date upon which the Rights Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and all applicable transfer taxes) was made, provided, however, that if the date of such surrender and payment is a date upon which the Preferred Stock (or Common Stock and/or other securities, as the case may be) transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares (fractional or otherwise) on, and such certificate shall be dated, the next succeeding Business Day on which the Preferred Stock (or Common Stock and/or other securities, as the case may be) transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Rights Certificate shall not be entitled to any rights of a stockholder of the Company with respect to shares for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein.

Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.

(a)(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If any event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.

(ii) In the event:

(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and unchanged, (2) shall, in one transaction or a series of transactions, transfer any assets to the Company or to any of its Subsidiaries in exchange (in whole or in part) for shares of Common Stock of the Company, for shares of other equity securities of the Company, or for securities exercisable for or convertible into shares of equity securities of the Company (Common Stock or otherwise) or otherwise obtain from the Company, with or without consideration, any additional shares of such equity securities or securities exercisable for or convertible into shares of such equity securities (other than pursuant to a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of, in one transaction or a series of transactions, to, from or with (as the case may be) the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able obtain in arm's-length negotiation with an unaffiliated third party, other than pursuant to a transaction set forth in Section 13(a) hereof, (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of in one transaction or a series of transactions, to, from or with (as the case may be) the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $5,000,000, other than pursuant to a transaction set forth in Section 13(a) hereof, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full-time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a stockholder and except if resulting from a requirement of law or governmental regulation), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or

(B) any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan), alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date, become the Beneficial Owner of 15% or more of the shares of Common Stock then outstanding, unless the event causing the 15% threshold to be crossed is (a) a transaction set forth in Section 13(a) hereof, (b) a transaction or series of related transactions approved by the Board of Directors before such Person (or a predecessor of such Person) otherwise became an Acquiring Person or (c) any other action or transaction which the Board of Directors determines should not, consistent with the purposes of this Agreement, cause such Person (or a predecessor of such person) to be deemed an Acquiring Person, which determination is made by the Board of Directors prior to such Person (or a predecessor of such person) otherwise becoming an Acquiring Person, or

(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries of any other transaction or series of transactions involving the Company or any of its Subsidiaries, other than a transaction or transactions to which the provisions of Section 13(a) apply (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly beneficially owned by an Acquiring Person or any Associate or Affiliate of any Acquiring Person,

then, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-hundredths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-hundredths of a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the " Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the current market price (determined pursuant to Section 11(d) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares").

(iii) In the event that the number of shares of Common Stock which are authorized by the Company's certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall (A) determine the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value"), and (B) with respect to each Right (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of a Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares or units of shares, of preferred stock, such as the Preferred Stock, which the Board has deemed to have essentially the same value or economic rights as shares of Common Stock (such shares of preferred stock being referred to as "Common Stock Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value (less the amount of any reduction in the Purchase Price), where such aggregate value has been determined by the Board based upon the advice of a nationally recognized investment banking firm selected by the Board; provided, however, that if the Company shall not have made adequate provision to deliver the value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term "Spread" shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board determines in good faith that if is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that action is to be taken pursuant to the first and/or third sentences of this Section 11(a) (iii), the Company (1) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (2) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek such shareholder approval for such authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of each Adjustment Share shall be the Current Market Price per share of the Common Stock on the Section 11(a) (ii) Trigger Date and the per share or per unit value of any Common Stock Equivalent shall be deemed to equal the Current Market Price per share of the Common Stock on such date.

(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within forty-five (45) calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock (equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent Preferred Stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the current market price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market price, and the denominator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.

(c) In case of the Company shall fix a record date for a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend payable in stock other than Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the current market price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Preferred Stock and the denominator of which shall be such current market price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.

(d) (i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the Current Market Price per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the thirty (30) consecutive Trading Days immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the Current Market Price per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the ten (10) consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification shall not have occurred prior to the commencement of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, then, and in each such case, the Current Market Price shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the American Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or such other system then in use, or, if on any such date the shares of Common Stock are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board. If on any such date no market maker is making a market in the Common Stock the fair value of such shares on such date as determined in good faith by the Board shall be used. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the shares of Common Stock are listed or admitted to the Trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, a Business Day. If the Common Stock is not publicly held or not so listed or traded, Current Market Price per share shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.

(ii) For the purpose of any computation hereunder, the Current Market Price per share of Preferred Stock shall be determined in the same manner as set forth above for the Common Stock in clause (i) of this Section 11(d) (other than the last sentence thereof). If the Current Market Price per share of Preferred Stock cannot be determined in the manner provided above or if the Preferred Stock is not publicly held or listed or traded in a manner described in clause (i) of this Section 11(d), the Current Market Price per share of Preferred Stock shall be conclusively deemed to be an amount equal to 100 (as such number may be appropriately adjusted for such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock occurring after the date of this Agreement) multiplied by the Current Market Price per share of the Common Stock. If neither the Common Stock nor the Preferred Stock is publicly held or so listed or traded, Current Market Price per share of the Preferred Stock shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. For all purposes of this Agreement, the Current Market Price of a Unit shall be equal to the Current Market Price of one share of Preferred Stock divided by 100.

(e) Anything herein to the contrary notwithstanding, no adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least one percent (1%) in the Purchase Price, provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest ten-thousandth of a share of Common Stock or other share or one-millionth of a share of Preferred Stock, as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three (3)years from the date of the transaction which mandates such adjustment, or (ii) the Expiration Date.

(f) If as a result of an adjustment made pursuant to Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock other than Preferred Stock, thereafter the number of such other shares so receivable upon exercise of any Right and the Purchase Price thereof shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Stock contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred stock shall apply on like terms to any such other shares.

(g) All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of one one-hundredths of a share of Preferred Stocked purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.

(h) Unless the Company shall have exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and (c), each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one one-hundredths of a share of Preferred Stock (calculated to the nearest one-millionth) obtained by (i) multiplying (x) the number of one one-hundredths of a share covered by a Right immediately prior to this adjustment, by (y) the Purchase price in effect immediately prior to such adjustment of the Purchase Price, and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price.

(i) The Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights, in lieu of any adjustment in the number of one one-hundredths of a share of Preferred Stock purchasable upon the exercise of a Right. Each of the Rights outstanding after the adjustment in the number of Rights outstanding after the adjustment in the number of Rights shall be exercisable for the number of one one-hundredths of a share of Preferred Stock for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one-ten- thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Rights Certificates have been issued, shall be at least ten (10) days later than the date of the public announcement. If Rights Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Rights Certificates on such record date Rights Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Rights Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Rights Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Rights Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein (and may bear, at the option of the Company, the adjusted Purchase Price) and shall be registered in the names of the holders of record of Rights Certificates on the record date specified in the public announcement.

(j) Irrespective of any adjustment or change in the Purchase Price or the number of one one-hundredths of a share of Preferred Stock issuable upon the exercise of the Rights, the Rights Certificates theretofore and thereafter issued may continue to express the Purchase Price per one one-hundredth of a share and the number of one one-hundredth of a share which were expressed in the initial Rights Certificates issued hereunder.

(k) Before taking any action that would cause an adjustment reducing the Purchase Price below the then stated value, if any, of the number of one one-hundredths of a share of Preferred Stock issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable such number of one one-hundredths of a share of Preferred Stock at such adjusted Purchase Price.

(l) In any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised after such record date the number of one one-hundredths of a share of Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the number of one one-hundredths of a share of Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional shares (fractional or otherwise) or securities upon the occurrence of the event requiring such adjustment.

(m) Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that in their good faith judgment the Board of Directors of the Company shall determine to be advisable in order that any (i) consolidation or subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred Stock at less than the current market price, (iii) issuance wholly for cash of shares of Preferred Stock or securities which by their terms are convertible into or exchangeable for shares of Preferred Stock, (iv) stock dividends or (v) issuance of rights, options or warrants referred to in this Section 11, hereafter made by the Company to holders of its Preferred Stock shall not be taxable to such stockholders.

(n) The Company covenants and agrees that it shall not, at any time after the Distribution Date, (i) consolidate with any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), (ii) merge with or into any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one transaction, or a series of related transactions, assets or earning power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or more Transactions each of which complies with Section 11(o) hereof), if (x) at the time of or immediately after such consolidation, merger or sale there are any rights, warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights or (y) prior to, simultaneously with or immediately after such consolidation, merger or sale, the shareholders of the Person who constitutes, or would constitute, the "Principal Party" for purposes of Section 13(a) hereof shall have received a distribution of Rights previously owned by such Person or any of its Affiliates and Associates.

(o) The Company covenants and agrees that, after the Distribution Date, it will not, except as permitted by Section 23 or Section 27 hereof, take (or permit any Subsidiary to take) any action if at the time such actin is taken it is reasonably foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights.

(p) Anything in this Agreement to the contrary notwithstanding, in the event that the Company shall at any time after the Rights Dividend Declaration Date and prior to the Distribution Date (i) declare a dividend on the outstanding shares of Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii) combine the outstanding shares of Common Stock into a smaller number of shares, the number of Rights then outstanding, shall be proportionately adjusted so that the number of Rights following such event shall equal the result obtained by multiplying the number of Rights outstanding immediately prior to such event by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately following such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event, and the number of Rights associated with each share of Common Stock shall remain unchanged. The adjustment described in this subsection (p) shall be made successively each time an event of the type described in clauses (i), (ii) or (iii) of this subsection (p) shall occur.

Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made as provided in Section 11 and Section 13 hereof, the Company shall (a) promptly prepare a certificate setting forth such adjustment and a brief statement of the facts accounting for such adjustment, (b) promptly file with the Rights Agent, and with each transfer agent for the Preferred Stock and the Common Stock, a copy of such certificate, and (c) mail a brief summary thereof to each holder of a Rights Certificate (or, if prior to the Distribution date, to each holder of a certificate representing shares of Common Stock) in accordance with Section 26 hereof. The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained.

Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. (a) In the event that, following the Stock Acquisition Date, directly or indirectly, (x) the Company shall consolidate with, or merge with and into, any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), and the Company shall not be the continuing or surviving corporation of such consolidation or merger, (y) any Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof) shall consolidate with, or merge with or into, the Company, and the Company shall be continuing or surviving corporation of such consolidation or merger and, in connection with such consolidation or merger, all or part of the outstanding shares of Common Stock shall be changed into or exchanged for stock or other securities of any other Person or cash or any other property, or (z) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one transaction or a series of related transactions, assets or earning power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any Person or Persons (other than the Company or any Subsidiary of the Company in one or more transactions each of which complies with Section 11(o) hereof), then, and in each such case, proper provision shall be made so that: (i) each holder of a Right, except as provided in Section 7(e) hereof, shall thereafter have the right to receive upon the exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, such number of validly authorized and issued, fully paid, non-assessable and freely tradeable shares of Common Stock of the Principal Party (as such term is hereinafter defined), not subject to any liens, encumbrances, rights of first refusal or other adverse claims, as shall be equal to the result obtained by (1) multiplying the then current Purchase Price by the number of one one-hundredth of a share of Preferred Stock for which a Right is exercisable immediately prior to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the first occurrence of a Section 13 Event, multiplying the number of such one one-hundredths of a share for which a Right was exercisable immediately prior to the first occurrence of a section 11(a)(ii) Event by the Purchase Price in effect immediately prior to such first occurrence), and dividing that product (which, following the first occurrence of a Section 13 Event, shall be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (2) 50% of the current market price (determined pursuant to Section 11(d)(i) hereof) per share of the Common Stock of such Principal Party on the date of consummation of such Section 13 Event; (ii) such Principal Party shall thereafter be liable for, and shall assume, by virtue of such Section 13 Event, all the obligations and duties of the Company pursuant to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer to such Principal Party, it being specifically intended that the provisions of Section 11 hereof shall apply only to such Principal Party following the first occurrence of a Section 13 Event; (iv) such Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient number of shares of its Common Stock) in connection with the consummation of any such transaction as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to its shares of Common stock thereafter deliverable upon the exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof shall be of no effect following the first occurrence of any Section 13 Event.

(b) "Principal Party" shall mean

(i) in the case of any transaction described in clause (x) or (y) of the first sentence of Section 13(a), the Person that is the issuer of any securities into which shares of Common Stock of the Company are converted in such merger or consolidation, and if no securities are so issued, the Person that is the other party to such merger or consolidation; and

(ii) in the case of any transaction described in clause (z) of the first sentence of Section 13(a), the Person that is the party receiving the greatest portion of the assets or earning power transferred pursuant to such transaction or transactions;

provided, however, that in any such case, (1) if the Common Stock of such Person is not at such time and has not been continuously over the preceding twelve (12) month period registered under Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary of another Person the Common Stock of which is and has been so registered, "Principal Party" shall refer to such other Person; and (2) in case such Person is a Subsidiary, directly or indirectly, of more than one Person, the Common Stocks of two or more of which are and have been so registered, "Principal Party" shall refer to whichever of such Persons is the issuer of the Common Stock having the greatest aggregate market value.

(c) The Company shall not consummate any such consolidation, merger, sale or transfer unless the Principal Party shall have a sufficient number of authorized shares of its Common Stock which have not been issued or reserved for issuance to permit the exercise in full of the Rights in accordance with this Section 13 and unless prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing for the terms set forth in paragraphs (a) and (b) of this Section 13 and further providing that, as soon as practicable after the date of any consolidation, merger or sale of assets mentioned in paragraph (a) of this Section 13, the Principal Party will

(i) prepare and file a registration statement under the Act, with respect to the Rights and the securities purchasable upon exercise of the Rights on an appropriate form, and will use its best efforts to cause such registration statement to (A) become effective as soon as practicable after such filing and (B) remain effective (with a prospectus at all times meeting the requirements of the Act) until the Expiration Date; and

(ii) will deliver to holders of the Rights historical financial statement for the Principal Party and each of its Affiliates which comply in all respects with the requirements for registration on Form 10 under the Exchange Act.

The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers. In the event that a Section 13 Event shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore been exercised shall thereafter become exercisable in the manner described in Section 13(a).

Section 14. Fractional Rights and Fractional Shares. (a) The Company shall not be required to issue fractions of Rights, except prior to the Distribution Date as provided in Section 11(p) hereof, or to distribute Rights Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the registered holders of the Rights Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing price of the Rights for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Rights are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading, or if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the rights selected by the Board of Directors of the Company. If on any such date no such market maker is making a market in the Rights the fair value of the Rights on such date as determined in good faith by the Board of Directors of the Company shall be used.

(b) The Company shall not be required to issue fractions of shares of Preferred Stock (other than fractions which are integral multiples of one one-hundredth of a share of Preferred Stock) upon exercise of the Rights or to distribute certificates which evidence fractional shares of Preferred Stock) (other than fractions which are integral multiples of one one-hundredth of a share of Preferred Stock). In lieu of fractional shares of Preferred Stock that are not integral multiples of one one-hundredth of a share of Preferred Stock, the Company may pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one one-hundredth of a share of Preferred Stock. For purposes of this Section 14(b), the current market value of one one-hundredth of a share of Preferred Stock shall be one one-hundredth of the closing price of a share of Preferred Stock (as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of such exercise.

(c) Following the occurrence of a Triggering Event, the Company shall not be required to issue fractions of shares of Common Stock upon exercise of the Rights or to distribute certificates which evidence fractional shares of Common Stock. In lieu of fractional shares of Common Stock, the Company may pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one (1) share of Common Stock. For purposes of this Section 14(c), the current market value of one share of Common Stock shall be the closing price of one share of Common Stock (as determined pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of such exercise.

(d) The holder of a Right by the acceptance of the Rights expressly waives his right to receive any fractional Rights or any fractional shares; upon exercise of a Right, except as permitted by this Section 14.

Section 15. Rights of Action. All rights of action in respect of this Agreement are vested in the respective registered holders of the Rights Certificates (and, prior to the Distribution Date, the registered holders of the Common Stock); and any registered holder of any Rights Certificate (or, prior to the Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the holder of any other Rights Certificate (or, prior to the Distribution Date, of the Common Stock), may, in his own behalf and for his own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, his right to exercise the Rights evidenced by such Rights Certificate in the manner provided in such Rights Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and shall be entitled to specific performance of the obligations hereunder and injunctive relief against actual or threatened violations of the obligations hereunder of any Person subject to this Agreement.

Section 16. Agreement of Rights Holders. Every holder of a Right by accepting the same consents and agrees with the Company and the Rights Agent and with every other holder of a Right that:

(a) prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of Common Stock;

(b) after the Distribution Date, the Rights Certificates are transferable only on the registry books of the Rights Agent if surrendered at the principal office or offices of the Rights Agent designated for such purposes, duly endorsed or accompanied by a proper instrument of transfer and with the appropriate forms and certificates fully executed;

(c) subject to Section 6(a) and Section 7(f) hereof, the Company and the Rights Agent may deem and treat the person in whose name a Rights Certificate (or, prior to the Distribution Date, the associated Common Stock certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Rights Certificates or the associated Common Stock certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent, subject to the last sentence of Section 7(e) hereof, shall be required to be affected by any notice to the contrary; and

(d) notwithstanding anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right or other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation, or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation; provided, however, the Company must use its best efforts to have any such order, decree or ruling lifted or otherwise overturned as soon as possible.

Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the number of one one-hundredths of a share of Preferred Stock or any other securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby nor shall anything contained herein or in any Rights Certificate be construed to confer upon the holder of any Rights Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in Section 25 hereof), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Rights Certificate shall have been exercised in accordance with the provisions hereof.

Section 18. Concerning the Rights Agent. (a) The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and disbursements and other disbursements incurred in the administration and execution of this Agreement, and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, or expense, incurred without negligence, bad faith or willful misconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement, including the costs and expenses of defending against any claim of liability in the premises. Anything in this Agreement to the contrary notwithstanding, in no event shall the Rights Agent be liable for special, indirect or inconsequential loss or damage of any kind whatsoever (including but not limited to lost profits) incurred without bad faith or willful misconduct on the part of the Rights Agent, even if the Rights Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.

(b) The Rights Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of this Agreement in reliance upon any Rights Certificate or certificate for Common Stock or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed, where necessary, verified or acknowledged, by the proper Person or Persons.

Section 19. Merger or Consolidation or Change of Name of Rights Agent. (a) Any corporation into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any corporation succeeding to the corporate trust business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided, however, that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Rights Certificates shall have been countered signed but not delivered, any such successor Rights Agent may adopt the countersignature of a predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been countersigned, any successor Rights Agent may countersign such Rights Certificates either in the name of the predecessor or in the name of the successor Rights Agent; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement.

(b) In any case at any time the name of the Rights Agent shall be changed and at such time any of the Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Rights Certificates so countersigned; and in case at that time any of the rights Certificates shall not have been countersigned, the Rights Agent may countersign such Rights Certificates either in its prior name or in its changed name; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement.

Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Company and the holders of Rights Certificates, by their acceptance thereof, shall be bound:

(a) The Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the option of such counsel shall be full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion.

(b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter (including, without limitation, the identity of any Acquiring Person and the determination of "current market price" be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter unless other evidence, in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chairman of the Board, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate.

(c) The Rights Agent shall be liable hereunder only for its own negligence, bad faith or willful misconduct.

(d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this agreement or in the Rights Certificates or be required to verify the same (except as to its countersignature on such Rights Certificates), but all such statements and recitals are and shall be deemed to have been made by the Company only.

(e) The Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Rights Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Rights Certificate; nor shall it be responsible for any adjustment required under the provisions of Section 11 or Section 13 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Rights Certificates after actual notice of any such adjustment), nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock or Preferred Stock to be issued pursuant to this Agreement or any Rights Certificate or as to whether any shares of Common Stock or Preferred Stock will, when so issued, be validly authorized and issued, fully paid and nonassessable.

(f) The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement.

(g) The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from the Chairman of the Board, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered to be taken by it in good faith in accordance with instruction of any such officer.

(h) The Rights Agent and any stockholder, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other legal entity.

(i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct; provided, however, reasonable care was exercised in the selection and continued employment of thereof.

(j) No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of its rights if there shall be reasonable grounds for believing that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it.

(k) If, with respect to any Right Certificate surrendered to the Rights Agent for exercise or transfer, the certificate attached to the form of assignment or form of election to purchase, as the case may be, has either not been completed or indicates an affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall not take any further action with respect to such requested exercise of transfer without first consulting with the Company.

Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon thirty (30) days' notice in writing mailed to the Company, and to each transfer agent of the Common Stock and Preferred Stock, by registered or certified mail, and to the holders of the Rights Certificates by first-class mail. The Company may remove the Rights Agent or any successor Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock and Preferred Stock, by registered or certified mail, and to the holders of the Rights Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Rights Certificate (who shall, with such notice, submit his Rights Certificate for inspection by the Company), then any registered holder of any Rights Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be a corporation organized and doing business under the laws of the United States or the State of New York (or of any other state of the United States so long as such corporation is authorized to do business as a banking institution in the State of New York), in good standing, having a principal office in the State of New York, which is authorized under such laws to exercise corporate trust powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $100,000,000. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock and the Preferred Stock, and mail a notice thereof in writing to the registered holders of the Rights Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.

Section 22. Issuance of New Rights Certificates. Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company may, at its option issue new Rights Certificates evidencing Rights in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Rights Certificates made in accordance with the provisions of this Agreement. In addition, in connection with the issuance or sale of shares of Common Stock following the Distribution Date and prior to the redemption or expiration of the Rights, the Company (a) shall, with respect to shares of Common Stock so issued or sold pursuant to the exercise of stock options or under any employee plan or arrangement, granted or awarded as of the Distribution Date, or upon the exercise, conversion or exchange of securities hereinafter issued by the Company, and (b) may, in any other case, if deemed necessary or appropriate by the Board of Directors of the Company, issue Rights Certificates representing the appropriate number of Rights in connection with such issuance or sale; provided, however, that (i) no such Rights Certificate shall be issued if, and to the extent that, the Company shall be advised by counsel that such issuance would create a significant risk of material adverse tax consequences to the Company or the Person to whom such Rights Certificate would be issued, and (ii) no such Rights Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof.

Section 23. Redemption and Termination. (a) The Board of Directors of the Company may, at its option, at any time prior to the earlier of (i) the close of business on the tenth day following the Stock Acquisition Date (or, if the Stock Acquisition Date shall have occurred prior to the Record Date, the close of business on the tenth day following the Record Date), or (ii) the Final Expiration Date, redeem all but not less than all the then outstanding Rights at a redemption price of $.01 per Right, as such amount may be appropriately adjusted to reflect any stock split, stock divided or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the "Redemption Price"); provided, however, that if, following the occurrence of a Stock Acquisition Date and following the expiration of the right of redemption hereunder but prior to any Triggering Event, (i) a Person who is an Acquiring Person shall have transferred or otherwise disposed of a number of shares of Common Stock in one transaction or series of transactions, not directly or indirectly involving the Company or any of its Subsidiaries, which did not result in the occurrence of a Triggering Event such that such Person is thereafter a Beneficial Owner of 15% or less of the outstanding shares of Common Stock of the Company, and (ii) there are no other Persons, immediately following the occurrence of the event described in clause (i), who are Acquiring Persons, then the right of redemption shall be reinstated and thereafter be subject to the provisions of this Section 23. Notwithstanding anything contained in this Agreement to the contrary, the Rights shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event until such time as the Company's right of redemption hereunder has expired. The Company may, at its option, pay the Redemption Price in cash, shares of Common Stock (based on the "current market price", as defined in Section 11(d)(i) hereof, of the Common Stock at the time of redemption) or any other form of consideration deemed appropriate by the Board of Directors.

(b) Immediately upon the action of the Board of Directors of the Company ordering the redemption of the Rights, evidence of which shall have been filed with the Rights Agent and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price for each Right so held. Promptly after the action of the Board of Directors ordering the redemption of the Rights, the Company shall give notice of such redemption to the Rights Agent and the holders of the then outstanding Rights by mailing such notice to all such holders at each holder's last address as it appears upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the Transfer Agent for the Common Stock. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made.

Section 24. Exchange. (a) The Board of Directors of the Company may, at its option, at any time and from time to time after the first occurrence of a Section 11(a)(ii) Event, exchange all or part of the then outstanding and exerciseable Rights (which shall not include Rights that become void pursuant to the provisions of the Section 7(e) hereof) for shares of Common Stock or Common Stock Equivalents, or any combination thereof, at an exchange ratio of one share of Common Stock per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such exchange ratio being hereinafter referred to as the "Exchange Ratio").

(b) Immediately upon the action of the Board of Directors of the Company ordering the exchange of any Rights pursuant to subsection (a) of this Section 24 and without any further action and without any notice, the right to exercise such Right shall terminate and the only right thereafter of a holder of such Rights such be to receive that number of shares of Common Stock and/or Common Stock Equivalents equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Company promptly shall mail a notice of any such exchange to all of the holders of such Rights at their latest addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of the shares of Common Stock for Rights will be effected and, in the event of any partial exchange. Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 7(e) hereof) held by each holder of Rights.

(c) In the event that the number of shares of Common Stock which are authorized by the Company's Restated Certificate of Incorporation but not outstanding or for issuance for purposes other than upon exercise of the Rights are not sufficient to permit any exchange of Rights as contemplated in accordance with this Section 24, the Company may, at its option, take all such action as may be necessary to authorize additional shares of Common Stock for issuance upon exchange of the Rights.

(d) The Company shall not be required to issue fractions of shares of Common Stock or to distribute certificates which evidence fractional shares of Common Stock. In lieu of such fractional shares of Common Stock, the Company shall pay to the registered holders of Rights with regard to which such fractional shares of Common Stock would otherwise be issuable an amount in cash equal to the same fraction of the value of a whole share of Common Stock. For purposes of this Section 24, the value of a whole share of Common Stock shall be the closing price (as determined pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange pursuant to this Section 24, and the value of any Common Stock Equivalent shall be deemed to have the same value as the Common Stock on such date.

Section 25. Notice of Certain Events. (a) In case the Company shall propose, at any time after the Distribution Date, (i) to pay any dividend payable in stock of any class to the holders of Preferred Stock or to make any other distribution to the holders of Preferred Stock (other than a regular Quarterly cash dividend out of earnings or retained earnings of the Company), or (ii) to offer to the holders of Preferred Stock rights or warrants to subscribe for or to purchase any additional shares of Preferred Stock or shares of stock of any class or any other securities, rights or options, or (iii) to effect any reclassification of its Preferred Stock (other than a reclassification involving only the subdivision of outstanding shares of Preferred Stock), or (iv) to effect any consolidation or merger into or with any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one transaction or a series of related transactions, of more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or more transactions each of which complies with section 11(o) hereof), or (v) to effect the liquidation, dissolution or winding up of the Company, then, in each such case, the company shall give to each holder of a Rights Certificate, to the extent feasible and in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein by the holders of the shares of Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least twenty (20) days prior to the record date for determining holders of the shares of Preferred Stock for purposes of such action, and in the case of any such other action, at least twenty (20) days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the shares of Preferred Stock whichever shall be the earlier.

(b) In case any of the events set forth in Section 11 (a)(ii) hereof shall occur, then, in any such case, (i) the Company shall as soon as practicable thereafter give to each holder of a Rights Certificate, to the extent feasible and in accordance with Section 26 hereof, a notice of the occurrence of such event, which shall specify the event and the consequences of the event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all references in the preceding paragraph to Preferred Stock shall be deemed thereafter to refer to Common Stock and/or if appropriate, other securities.

Section 26. Notices. Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Rights Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows:

Bergen Brunswig Corporation

4000 Metropolitan Drive

Orange, California 92668-3510

Attention: Corporate Secretary

Subject to the provisions of Section 21, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Rights Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company) as follows:

ChaseMellon Shareholder Services, Inc.

Attention: Corporate Trust Department

Notice or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Rights Certificate (or, if prior to the Distribution Date, to the holder of certificates representing shares of Common Stock) shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder of the address of such holder as shown on the registry books of the Company.

Section 27. Supplements and Amendments. Prior to the Distribution Date and subject to the penultimate sentence of this Section 27, the Company and the Rights Agent shall, if the Company so directs, supplement or amend any provision of this Agreement without the approval of any holders of certificates representing shares of Common Stock. From and after the Distribution Date and subject to the penultimate sentence of this Section 27, the Company and the Rights Agent shall, if the Company so directs, supplement or amend this Agreement without the approval of any holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, (iii) to shorten or lengthen any time period hereunder, or (iv) to change or supplement the provisions hereunder in any manner which the Company may deem necessary or desirable and which shall not adversely effect the interests of the holders of Rights Certificates (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person); provided, however, this Agreement may not be supplemented or amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating to when the Rights may be redeemed at such time as the Rights are not then redeemable, or (B) any other time period unless such lengthening is for the purpose of protecting, enhancing or clarifying the rights of, and/or the benefits to, the holders of Rights. Upon the delivery of a certificate from an appropriate officer of the Company which states that the proposed supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or amendment. Notwithstanding anything contained in this Agreement to the contrary, no supplement or amendment shall be made which changes the Redemption Price, the Final Expiration Date, the Purchase Price or the number of one one-hundredths of a share of Preferred Stock for which a Right is exercisable. Prior to the Distribution Date, the interests of the holders of Rights shall be deemed coincident with the interests of the holders of Common Stock.

Section 28. Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.

Section 29. Determinations and Actions by the Board of Directors, etc. For all purposes of this Agreement, any calculation of the number of shares of Common Stock outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding shares of Common Stock of the Company of which any Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act. The Board of Directors of the Company shall have the exclusive power and authority to administer this Agreement and to exercise all rights and powers specifically granted to the Board or to the Company, or as may be necessary or advisable in the administration of this Agreement, including, without limitation, the right and power to (i) interpret the provisions of this Agreement, and (ii) to make all determinations deemed necessary or advisable for the administration of this Agreement (including a determination to redeem or not redeem the Rights or to amend the Agreement). All such actions, calculations, interpretations and determinations (including, for purposes of clause (y) below, all omissions with respect to the foregoing) which are done or made by the Board in good faith, shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights and all other parties, and (y) not subject the Board to any liability to the holders of the Rights.

Section 30. Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, registered holders of the Common Stock) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date registered holders of the Common Stock).

Section 31. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected. Impaired or invalidated, provided however, that notwithstanding anything in this Agreement to the contrary, if any such term, provision, covenant or restriction is held by such court or authority to be invalid, voice or unenforceable and the Board of Directors of the Company determines in its good faith judgment that severing the invalid language from this Agreement would adversely affect purpose or effect of this Agreement, the right of redemption set forth in Section 23 hereof shall be reinstated and shall not expire until the close of business on the tenth day following the date of such determination by the Board of Directors.

Section 32. Governing Law. This Agreement, each Right and each Rights Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of New Jersey and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts made and to be performed entirely within such State.

Section 33. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

Section 34. Descriptive Headings. Descriptive headings of the several Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

Section 35. Intentionally omitted.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written.

Attest:		BERGEN BRUNSWIG CORPORATION
By:		By:
			Milan A. Sawdei
Name:		Name:	Milan A. Sawdei
Title:	,	Title:	Executive Vice President,
			Chief Legal Officer and Secretary
Attest:		CHASEMELLON SHAREHOLDER SERVICES, INC.
		(as successor to Chemical Trust Company of California)
By:		By:
Name:		Name:
Title:	Assistant Vice President	Title:	Vice President

Exhibit A

[Form of Rights Certificate]

Certificate No. R- ________ Rights

NOT EXERCISABLE AFTER FEBRUARY 18, 2004 OR EARLIER IF REDEEMED BY THE COMPANY.THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.](1)

Rights Certificate

BERGEN BRUNSWIG CORPORATION

This certifies that , or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement, dated as of February 8, 1994 (the "Rights Agreement"), between Bergen Brunswig Corporation, a New Jersey corporation (the "Company"), and Chemical Trust Company of California, a California banking corporation (the "Rights Agent"), to purchase from the Company at any time prior to 5:00 P.M. (New York City time) on February 18, 1994 at the office or offices of the Rights Agent designated for such purpose, or its successors as Rights Agent, one one-hundredth of a fully paid, non-assessable share of Series A Junior Participating Preferred Stock (the "Preferred Stock") of the Company, at a purchase price of $80.00 per [The portion of the legend in brackets shall be inserted only if applicable and shall replace the preceding sentence] one one-hundredth of a share (the "Purchase Price"), upon presentation and surrender of this Rights Certificate with the Form of Election to Purchase and related Certificate duly executed. The number of Rights evidenced by this Rights Certificate (and the number of shares which may be purchased upon exercise thereof) set forth above, and the Purchase Price per share set forth above, are the number and Purchase Price as of February 18, 1994 based on the Preferred Stock as constituted at such date. The Company reserves the right to require prior to the occurrence of a Triggering Event (as such term is defined in the Rights Agreement) that a number of Rights be exercised so that only whole shares of Preferred Stock will be issued.

Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights Agreement), if the Rights evidenced by this Rights Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined in the Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate or Affiliate, or (iii) under certain circumstances specified in the Rights Agreement, a transferee of a person who, after such transfer, became an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such Rights shall become null and void and no holder hereof shall have any right with respect to such Rights from and after the occurrence of such Section 11(a)(ii) Event.

As provided in the Rights Agreement, the Purchase Price and the number and kind of shares of Preferred Stock or other securities, which may be purchased upon the exercise of the Rights evidenced by this Rights Certificate are subject to modification and adjustment upon the happening of certain events, including Triggering Events.

This Rights Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Rights Certificates, which limitations of rights include the temporary suspension of the exercisability of such Rights under the specific circumstances set forth in the Rights Agreement. Copies of the Rights Agreement are on file at the above-mentioned office of the Rights Agent and are also available upon written request to the Rights Agent.

This Rights Certificate, with or without other Rights Certificates, upon surrender at the principal office or offices of the Rights Agent designated for such purpose, may be exchanged for another Rights Certificate or Rights Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of one one-hundredths of a share of Preferred Stock as the Rights evidenced by the Rights Certificate or Rights Certificates surrendered shall have entitled such holder to purchase. If this Rights Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Rights Certificate or Rights Certificates for the number of whole Rights not exercised.

Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate may be redeemed by the Company at its option at a redemption price of $.01 per Right at any time prior to the earlier of the close of business on (i) the tenth day following the Stock Acquisition Date (as such time period may be extended pursuant to the Rights Agreement), and (ii) the Final Expiration Date. In addition, the Rights may be exchanged, in whole or in part, for shares of Common Stock, or shares of preferred stock, of the Company having essentially the same value or economic rights as such shares. Immediately upon the action of the Board of Directors of the Company authorizing any such exchange, and without any further action or any notice, the Rights (other than Rights which are not subject to such exchange) will terminate and the Rights will only enable holders to receive the shares issuable upon such exchange. After the expiration of the redemption period, the Company's right of redemption may be reinstated if an Acquiring Person reduces his beneficial ownership to 15% or less of the outstanding shares of Common Stock in a transaction or series of transactions not involving the Company.

No fractional shares of Preferred Stock will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions which are integral multiples of one one-hundredth of a share of Preferred Stock, which may, at the election of the Company, be evidenced by depositary receipts), but in lieu thereof a cash payment will be made, as provided in the Rights Agreement.

No holder of this Rights Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of shares of Preferred Stock or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or, to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Rights Certificate shall have been exercised as provided in the Rights Agreement.

This Rights Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.

WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.

Dated as of ,

ATTEST:		BERGEN BRUNSWIG CORPORATION
		By:
	Secretary	Title:

Countersigned
CHEMICAL TRUST COMPANY
OF CALIFORNIA
By
	Authorized Signature

[Form of Reverse Side of Rights Certificate]

FORM OF ASSIGNMENT

(To be executed by the registered holder if such

holder desires to transfer the Rights Certificate.)

FOR VALUE RECEIVED

hereby sells, assigns and transfer unto

(Please print name and address of transferee)

This Rights Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint _________________ Attorney, to transfer the within Rights Certificate on the books of the within-named Company, with full power of substitution.

Dated: ___________________, 19__

Signature

Signature Guaranteed:

Certificate

The undersigned hereby certifies by checking the appropriate boxes that:

(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and transferred by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined pursuant to the Rights Agreement);

(2) after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] not acquire the Rights evidenced by this Rights Certificate from any Person who is, was or subsequently became an Acquiring Person or an Affiliate or Associate of an Acquiring Person.

Dated: __________________, 19__ ______________________
	Signature
Signature Guaranteed:

NOTICE

The signature to the foregoing Assignment and Certificate must correspond to the name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever.

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to

exercise Rights represented by the

Rights Certificate.)

To: BERGEN BRUNSWIG CORPORATION:

The undersigned hereby irrevocably elects to exercise __________ Rights represented by this Rights Certificate to purchase the shares of Preferred Stock issuable upon the exercise of the Rights (or such other securities of the Company or of any other person which may be issuable upon the exercise of the Rights) and requests that certificates for such shares be issued in the name of and delivered to:

Please insert social security or other identifying number

(Please print name and address)

If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a new Rights Certificate for the balance of such Rights shall be registered in the name of and delivered to:

Please insert social security or other identifying number

(Please print name and address)

Dated: _______________, 19__

Signature

Signature Guaranteed:

Certificate

The undersigned hereby certifies by checking the appropriate boxes that:

(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not being exercised by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined pursuant to the Rights Agreement) ;

(2) after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from any Person who is, was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person.

Dated: ___________, 19__ ___________________________

Signature

Signature Guaranteed:

NOTICE

The signature to the foregoing Election to Purchase and Certificate must correspond to the name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever.

EX-21

EXHIBIT 21

EX-23

EXHIBIT 23

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statement Nos. 2-54345, 2-63803, 2-75715, 2-88474, 2-96491, 33-32465, 33-57537, 333-77867, 333-77869, 333-77871, 333-77873 on Form S-8 and in Registration Statement Nos. 33-55136, 33-53817, 33-57325, 33-59784, 333-631, 333-63441, 333-65901, 333-68751, 333-71071 and 333-74349 on Form S-3 of our report dated November 3, 1999 (except for Note 14, as to which the date is December 17, 1999), appearing in this Annual Report on Form 10-K of Bergen Brunswig Corporation for the fiscal year ended September 30, 1999.

/s/ Deloitte & Touche LLP

Costa Mesa, California

December 27, 1999

EX-27

 

<ARTICLE>            5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION  EXTRACTED FROM THE
CONSOLIDATED  FINANCIAL STATEMENTS OF BERGEN BRUNSWIG
CORPORATION  FOR THE TWELVE  MONTHS  PERIOD  ENDED  SEPTEMBER  30, 1999
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.

<MULTIPLIER>         1000
<CURRENCY>           U.S. DOLLARS

                  
<PERIOD-TYPE>        12-MOS
<FISCAL-YEAR-END>                         SEP-30-1999
<PERIOD-END>                              SEP-30-1999
<EXCHANGE-RATE>                                     1
<CASH>                                        116,356
<SECURITIES>                                        0
<RECEIVABLES>                               1,610,013
<ALLOWANCES>                                  131,023
<INVENTORY>                                 1,813,716
<CURRENT-ASSETS>                            3,467,908
<PP&E>                                        404,718
<DEPRECIATION>                                164,273
<TOTAL-ASSETS>                              5,535,421
<CURRENT-LIABILITIES>                       2,697,948
<BONDS>                                     1,041,983
<COMMON>                                      205,974
<PREFERRED-MANDATORY>                               0
<PREFERRED>                                         0
<OTHER-SE>                                  1,289,516
<TOTAL-LIABILITY-AND-EQUITY>                5,535,421
<SALES>                                             0
<TOTAL-REVENUES>                           21,245,538
<CGS>                                      20,146,011
<TOTAL-COSTS>                              21,037,485
<OTHER-EXPENSES>                                    0
<LOSS-PROVISION>                               85,881
<INTEREST-EXPENSE>                             82,203
<INCOME-PRETAX>                               125,850
<INCOME-TAX>                                   55,277
<INCOME-CONTINUING>                            70,573
<DISCONTINUED>                                      0
<EXTRAORDINARY>                                     0
<CHANGES>                                           0
<NET-INCOME>                                   70,573
<EPS-BASIC>                                    0.60
<EPS-DILUTED>                                    0.59


 

EX-99.A

Exhibit 99(a)

BERGEN BRUNSWIG CORPORATION

STATEMENT REGARDING FORWARD-LOOKING INFORMATION

The Private Securities Litigation Reform Act of 1995 (the "Act") provides a "safe harbor" for "forward-looking statements" (as defined in the Act). The Form 10-K to which this exhibit is attached, the Company' s Annual Report to Shareowners, any Form 10-K, any other Form 10-Q or any Form 8-K of the Company, or any other written or oral statements made by or on behalf of the Company may include forward-looking statements which reflect the Company's current view (as of the date such forward-looking statement is made) with respect to future events, prospects, projections or financial performance. These forward-looking statements are subject to certain uncertainties and other factors that could cause actual results to differ materially from those made, implied or projected in such statements. These uncertainties and other factors include, but are not limited to, uncertainties relating to general economic conditions; the loss of one or more key customer or supplier relationships, including pharmaceutical or medical-surgical manufacturers for which alternative supplies may not be available; the malfunction or failure of the Company's information systems, including malfunctions or failures associated with Year 2000 compliance or readiness issues; the costs and difficulties related to the integration of recently acquired businesses, including the status of such businesses' compliance with Year 2000 protocols and such businesses to produce earnings that were anticipated or planned for; changes to the presentation of financial results and position resulting from adoption of new accounting principles or upon the advice of the Company's independent auditors, or the staff of the Securities and Exchange Commission; changes in the distribution or outsourcing pattern for pharmaceutical or medical-surgical products and/or services, including any increase in direct distribution or decrease in contract packaging by pharmaceutical manufacturers; application of, changes in, or failure to comply with, government regulations; the costs and other effects of legal and administrative proceedings and governmental audits including various pending litigation matters and the Bergen securities cases as described and defined in Part 1, Item 3 entitled "Legal Proceedings" of this Annual Report; competitive factors in the Company's healthcare service businesses, including pricing pressures; the continued financial viability and success of the Company's customers and suppliers; technological developments and products offered by competitors; failure to retain or continue to attract senior management or key personnel; risks associated with international operations; including fluctuations in currency exchange ratios; successful challenges to the validity of the Company's patents, copyrights and/or trademarks; difficulties or delays in the development, production and marketing of new products and services; strikes or other labor disruptions; labor and employee benefit costs; injuries to persons or property resulting from the operation of the Company's business; pharmaceutical and medical-surgical manufacturers' pricing policies and overall drug and medical-surgical supply price inflation; changes in buying practices of hospital buying groups or hospitals; availability and cost of attractive acquisition candidates; the continuation of various trends in the long-term care market (including the trends toward consolidation, cost containment and the implementation of the Medicare prospective payment system); the effect of reforms of the health care delivery system; and other factors referenced in the Form 10-K to which this exhibit is attached or other filings or written or oral statements made by or on behalf of the Company. The words "believe", "expect", "anticipate", "project", and similar expressions identify "forward-looking statements", which speak only as of the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.