EXHIBIT INDEX                                            TOTAL NUMBER OF PAGES
FOUND ON PAGE 63.                                        INCLUDED IN THIS ANNUAL
                                                         REPORT IS 94.
================================================================================
                       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, 1996
                          ------------------

                                       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                    (I.R.S. EMPLOYER
     INCORPORATION OR ORGANIZATION)                  IDENTIFICATION NO.)

      4000 METROPOLITAN DRIVE, ORANGE, CALIFORNIA           92868-3598
     ---------------------------------------------          ----------
     (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:

                                                     NAME OF EACH EXCHANGE ON
        TITLE OF EACH CLASS                             WHICH REGISTERED
        -------------------                             ----------------
Class A Common Stock                              New York Stock Exchange
Par Value $1.50 per share

6 7/8% Exchangeable Subordinated                  New York Stock Exchange
Debentures due July 15, 2011

$150,000,000 7 3/8% Senior Notes                  New York Stock Exchange
due 2003

Securities registered pursuant to Section 12(g) of the Act:
7%  Convertible  Subordinated  Debentures  due  March  1,  2006 - Durr-Fillauer
Medical, Inc.

================================================================================

                             (Cover page continued)


<PAGE>



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. [ x ]

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 [X]  No[ ]

At  November  30,  1996,   40,091,818  shares  of  Class  A  Common  Stock  were
outstanding.  The aggregate market value of the voting Class A Common Stock held
by nonaffiliates of the registrant on November 30, 1996 was $1,035,575,483.



                       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:

Portions of the definitive  proxy  statement dated December 22, 1994 relating to
the  registrant's  annual meeting of shareowners held January 26, 1995, as filed
with  the  Securities  and  Exchange  Commission,  are  incorporated  herein  by
reference in Part IV.

The Company's  Current Report on Form 8-K dated  November 10, 1996,  relating to
the execution of a definitive merger agreement with IVAX  Corporation,  as filed
with the Securities and Exchange Commission, is incorporated herein by reference
in Part I.



<PAGE>


                                TABLE OF CONTENTS


                                     PART I
                                     ------
ITEM                                                                       PAGE
----                                                                       ----

1.   Business                                                             I - 1

2.   Properties                                                           I - 5

3.   Legal Proceedings                                                    I - 5

4.   Submission of Matters to a Vote of Security Holders                  I - 9

4A.  Executive Officers of the Registrant                                 I - 9


                                     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

8.   Financial Statements and Supplementary Data                         II - 8

9.   Changes in and Disagreements with Accountants                       II - 27
         on Accounting and Financial Disclosure


                                    PART III
                                    --------

10.  Directors and Executive Officers of the Registrant                 III - 1

11.  Executive Compensation                                             III - 4

12.  Security Ownership of Certain Beneficial Owners                    III - 11
         and Management

13.  Certain Relationships and Related Transactions                     III - 13


                                     PART IV
                                     -------

14.  Exhibits, Financial Statement Schedules and Reports                 IV - 1
         on Form 8-K

     Signatures                                                          IV - 7




<PAGE>


                                     PART I

ITEM 1.     BUSINESS

            A.    GENERAL DEVELOPMENT OF BUSINESS
                  -------------------------------

                  Bergen Brunswig  Corporation,  a New Jersey corporation formed
in 1956, and its  subsidiaries  (collectively,  the "Company") are a diversified
drug and health  care  distribution  organization  and is the  nation's  largest
supplier of  pharmaceuticals  to the managed care market and the second  largest
wholesaler to the retail pharmacy market. The Company is the only pharmaceutical
distributor to provide both pharmaceuticals and  medical-surgical  supplies on a
national basis.

                  On  November  11,  1996,  the  Company  announced  that it had
entered into a definitive merger agreement with IVAX Corporation ("IVAX"). IVAX,
headquartered in Miami,  Florida, is a holding company with subsidiaries engaged
in the  research,  development,  manufacture  and  distribution  of health  care
products,  including generic and branded pharmaceuticals,  intravenous solutions
and related products,  and IN VITRO diagnostics.  The agreement,  which has been
unanimously  approved by the Board of Directors  of the Company and IVAX,  calls
for the  formation  of a new  combined  company  to be known  as BBI  Healthcare
Corporation ("BBI"),  which will be headquartered in Miami,  Florida.  Under the
agreement,  BBI will  acquire  both the Company and IVAX  through an exchange of
common stock,  whereby IVAX shareowners will receive 0.42 shares of common stock
of BBI for each share of IVAX common stock and the  Company's  shareowners  will
receive 1.00 share of BBI common stock for each share of Class A Common Stock of
the Company.  After the merger, BBI is expected to have approximately 91 million
shares  outstanding  of  which  the  Company  and  IVAX  shareowners  will  hold
approximately 44% and 56%, respectively.

                  The merger is  expected  to be  accounted  for as a pooling of
interests, and is expected to be tax-free to shareowners. The merger is expected
to close  during  the first  calendar  quarter of 1997,  subject  to  regulatory
approvals,  the approval of the Company and IVAX shareowners,  and certain other
conditions.  Additional  information regarding the proposed business combination
is set forth in the  Company's  Current  Report on Form 8-K dated  November  12,
1996, as filed with the Securities and Exchange Commission,  and is incorporated
herein by reference.

                  On August 7, 1996, the Company  acquired certain net assets of
Oncology  Supply  Company   ("Oncology"),   a  privately-held   oncology  supply
distributor located in Dothan,  Alabama,  for approximately $5.8 million in cash
plus  expenses  and  the  assumption  of  certain   liabilities.   The  Oncology
acquisition is more fully described in Note 4 of Notes to Consolidated Financial
Statements appearing in Part II, Item 8, "Financial Statements and Supplementary
Data" of this Annual Report.

                  The  Company  filed a shelf  registration  statement  with the
Securities and Exchange Commission which became effective on March 27, 1996. The
registration  statement allows the Company to sell senior and subordinated  debt



                                       I - 1

<PAGE>


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 proceeds from
the sale of such securities for general corporate  purposes,  which may include,
without  limitations,  the repayment of indebtedness of the Company or of any of
its  subsidiaries,  possible  acquisitions,  capital  expenditures  and  working
capital  needs.  Pending such  application,  the net proceeds may be temporarily
invested in short-term securities.  No offering has occurred since the effective
date of the  registration  statement.  Any offering of such securities  shall be
made only by means of prospectus.

                  On March 15, 1996, the Company's credit agreement (the "Credit
Agreement")  with a group of domestic  and foreign  banks was amended to,  among
other  things,  increase the maximum  borrowing to $400  million,  to extend the
maturity  date to March  15,  2001 and to allow  borrowing  under  discretionary
credit  lines   ("discretionary   lines")  outside  of  the  Credit   Agreement.
Outstanding  borrowings under the Credit Agreement  averaged $129 million during
the fiscal year ended  September 30, 1996.  The maximum  outstanding  borrowings
under the  Credit  Agreement  including  discretionary  lines for the year ended
September 30, 1996 were $319 million.

                  On January  15,  1996,  the  Company  repaid the $100  million
aggregate  principal amount of its 5 5/8% Senior Notes,  plus accrued  interest.
These notes were issued pursuant to the $400 million shelf registration filed by
the Company in December 1992.


            B.    NARRATIVE DESCRIPTION OF BUSINESS
                  ---------------------------------

                  Bergen   Brunswig  Drug  Company  (the  "Drug   Company"),   a
wholly-owned  and the largest  subsidiary of the Company,  is one of the largest
national  distributors of products sold or used by institutional  (hospital) and
retail  pharmacies.  The  Drug  Company  distributes  a full  line of  products,
including  pharmaceuticals,   proprietary  medicines,   cosmetics,   toiletries,
personal health products,  sundries,  and home healthcare supplies and equipment
from 32  locations  in 23 states . These  products are sold to a large number of
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, Guam and Mexico. During fiscal 1996, no single customer or
affiliated group of customers of the Company  accounted for more than 10% of its
net sales  and other  revenues.  However,  purchasing  groups  are  expected  to
represent increasing percentages of total sales in the future.

                  The Drug Company has been an innovator in the  development and
utilization  of  computer-based  retailer  order entry systems and of electronic
data interchange ("EDI") systems including computer-to-computer ordering systems
with suppliers. During fiscal 1996, substantially all of Drug Company's customer
orders were received via electronic order entry systems. These systems, combined
with daily  delivery,  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 the Drug  Company are  expected  to be  realized  through
increased  productivity.  The Drug Company is expanding its electronic interface



                                  I -  2

<PAGE>

with its suppliers and now electronically processes a substantial portion of its
purchase  orders,  invoices  and  payments.  The Drug  Company has opened  eight
regional  distribution  centers ("RDCs") since fiscal 1986,  replacing 19 older,
smaller,  less efficient  facilities.  RDCs help improve customer service levels
because a wider product  selection is more readily  available.  These facilities
serviced 49% of the Drug Company sales volume in 1996.

                  In June 1996, the Company  introduced  its Generic  Purchasing
Program ("GPP"). Designed to streamline 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 the
Company's customers.

                 In  July  1994,  the  Company   introduced   AccuSource(R),   a
multimedia  communication,  product information,  and electronic ordering system
for pharmacies.  AccuSource was developed  jointly by the Drug Company and Apple
Computer,  Inc. and is the first link of its kind between  supplier,  wholesaler
and retailer in the pharmaceutical  distribution process.  AccuSource simplifies
the ordering  process and gives retailers  detailed  information on thousands of
products,  services and special purchase opportunities,  as well as prescription
substitution  alternatives  and  Medicaid  coverage  information.   AccuSource's
on-line feature provides retailers with a convenient method for ensuring product
availability  by giving  immediate  information on quantity levels at their Drug
Company distribution center.

                 The Drug Company also  provides a wide variety of  promotional,
advertising,  merchandising,  and marketing assistance to independent  community
pharmacies. For example, the Good Neighbor Pharmacy(R) 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  the  Drug  Company's
trademark of OmniPhase(TM).

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

                  Bergen Brunswig  Medical  Corporation  (formerly known as Durr
Medical  Corporation),  Southeastern  Hospital Supply Corporation,  Professional
Medical Supply Co., Biddle & Crowther Company and Colonial Healthcare Supply Co.
(collectively, "Medical") wholly-owned subsidiaries of the Company, distribute a
variety of medical and surgical  products to individual  hospitals and alternate
site healthcare  providers through 27 distribution  centers located in 22 states
in every region of the United States except the northeast.



                                  I -  3

<PAGE>

                  Medical serves hospital customers and alternate site customers
in 44 states and the  District of Columbia.  Alternate  site  customers  include
outpatient  clinics,  nursing  homes,  surgery  centers,  dialysis  and oncology
centers,  emergency  centers,  laboratories  and veterinary  clinics.  Medical's
distribution  centers  range  between  14,000 and 70,000 square feet and average
40,000 square feet. Medical employs approximately 1,300 people.

                  Alternate Site Distributors  ("ASD"),  the Company's specialty
wholesale  subsidiary,   supplies   pharmaceuticals  and  oncology  products  to
physician  and clinic  accounts.  The Company  created ASD during fiscal 1994 to
respond to the rapid growth in the alternate  site market  business.  As a major
supplier to the alternate site market, ASD gives its customers quick access to a
broad range of  specialty,  value-added  products and services,  and  commercial
outsourcing.

                 In  September  1995,  the  Company  formed   IntePlex(TM)  Inc.
("IntePlex"),  a subsidiary of the Company, to focus exclusively on the evolving
integrated  healthcare  marketplace.  The  foundation  of IntePlex  involves the
development  of an electronic  catalog for  one-stop-shopping  and a centralized
database for tracking customers'  purchasing  information.  IntePlex's offerings
are  expected  to  include  logistics  management,   continuous   replenishment,
just-in-time  delivery,  and benefit plan  compliance for both  medical-surgical
supplies and pharmaceuticals  combined with delivery to all points in a network:
hospitals, alternate site, physician offices and retail stores.


                  1.    COMPETITION
                        -----------

                  The  Drug  Company,  which  is  the  second  largest  national
pharmaceutical  distributor  measured by sales,  faces intense  competition from
other  national  pharmaceutical  distributors,  as well as  regional  and  local
full-line  and  short-line   distributors,   direct  selling  manufacturers  and
specialty  distributors.  The principal competitive factors of the businesses of
the Drug Company, Medical and ASD are service and price.


                  2.    EMPLOYEES
                        ---------

                  As of November 30, 1996,  the Company  employed  approximately
4,900 people.  The Company considers its relationship with its employees and the
unions representing certain of its employees to be satisfactory.


                  3.    OTHER
                        -----

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


                                  I -  4

<PAGE>

                  Although the Company's computer service operations expend time
and effort on the development and marketing of computer programs relating to the
services for its subsidiaries, 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.



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.

            For certain financial  information regarding the Company's warehouse
and office  leases,  see Note 6 of Notes to  Consolidated  Financial  Statements
appearing in Part II, Item 8, "Financial  Statements and Supplementary Data," of
this Annual Report.



ITEM 3.     LEGAL PROCEEDINGS

            On July 7, 1992, two putative class action  complaints were filed in
the  Delaware  Court  of  Chancery  against  Durr-Fillauer   Medical,  Inc.  and
subsdiaries ("Durr") and its directors: STEINER V. ADAIR, ET AL., C.A. No. 12634
and GOLDWURM V. ADAIR, ET AL., C.A. No. 12635.  These actions were  consolidated
on July 15, 1992. On July 17, 1992,  another putative class action complaint was
filed in the Delaware Court of Chancery against Durr and its directors: TRIEF V.
ADAIR, ET AL., C.A. No. 12648. This action was consolidated with C.A. Nos. 12634
and 12635 on August 7, 1992. The named  plaintiffs in the three  complaints (the
"Class Action  Complaints")  allegedly owned an undisclosed  number of shares of
Durr common stock. The plaintiffs sought  certification of a class consisting of
all public stockholders of Durr who held Durr stock at the time of the filing of
the  Class  Action  Complaints  and who  were  not  affiliated  with  any of the
defendants. The Class Action Complaints alleged, among other things, that Durr's
directors  breached  their  fiduciary  duties in  entering  into a June 2, 1992,
Agreement and Plan of  Reorganization  which  contemplated  the merger of Durr's
wholesale  drug business with  Cardinal  Distribution,  Inc. and the spin-off of
Durr's  remaining  businesses  into a newly  formed  entity.  The  Class  Action
Complaints  sought a variety of relief,  including an  injunction  requiring the
Durr directors to consider competing offers, damages,  attorneys fees and costs.
The Company subsequently acquired Durr in September 1992.

            In connection  with the  acquisition of Durr, and for the purpose of
settling  the  expressed  concern  of the  Attorneys  General  of the  States of
Alabama, Florida and Louisiana (collectively,  the "Attorneys General") over the
alleged  potential  lessening of  competition in the wholesale  distribution  of



                                  I -  5

<PAGE>


pharmaceutical  products,  the Company and Durr entered into an agreement  dated
September 18, 1992, with the Attorneys  General wherein the Company agreed that:
(1) subject to certain exceptions, no existing customer of either the Company or
Durr  in  Alabama,  Florida  and  Louisiana  (the  "Customers")  will  suffer  a
diminution  of  service  levels  until  April 30,  1997;  (2)  except  for price
increases  resulting  from  taxes,  fees or  governmental  charges,  neither the
Company  nor Durr will  increase  the markup  percentage  for the  Customers  in
Alabama, Florida and Louisiana for a period of two years and from September 1994
through April 1997 will not increase such percentage in excess of the percentage
increase in the Consumer  Price Index;  (3) Durr will maintain its  distribution
facilities in Montgomery and Mobile, Alabama; Lakeland, Florida; and Shreveport,
Louisiana for a period of at least two years; (4) Durr will maintain and enhance
its AccuNetR system for a period of at least two years; and (5) the Company will
reimburse  the States of Alabama,  Florida and  Louisiana  for their legal fees,
costs and expenses  incurred in the  investigation of the acquisition of Durr by
the Company.

            Drug Barn, Inc. ("Drug Barn"), a former retail pharmacy chain in the
San Francisco Bay Area, owed the Company approximately $6.2 million in principal
obligations  as of  October  31,  1996,  of  which  approximately  $1.2  million
represents trade receivables and $5.0 million represents a note which matured on
March  25,  1993  and has not been  paid to date.  The  Company  has a  security
interest in virtually all of Drug Barn's assets, as well as personal guaranties,
which collaterize the note and trade receivables.

            In May 1992,  Drug Barn  requested  additional  financing  which the
Company  denied to extend.  In  December  1992,  Drug Barn  commenced  an action
against the  Company in the Santa Clara  Superior  Court  (State of  California)
alleging  breach  of  contract,  misrepresentation  and  violations  of  certain
California  antitrust and unfair  practices  laws. Drug Barn sought a variety of
damage claims including compensatory, treble and punitive damages, an injunction
against  collection  on the note,  and  declaratory  judgment  as to Drug Barn's
rights under an alleged oral joint venture agreement with the Company.

            On April 20,  1993,  the  Company  filed a  complaint  in the Orange
County Superior Court (State of  California),  Case No. 709136 against Drug Barn
and Milton Sloban and Barbara  Sloban,  as guarantors on the defaulted  note and
open trade receivables, alleging breach of contract and guaranty, and requesting
judicial foreclosure of and the possession of collateral.

            Drug Barn commenced a Chapter 11 case in U.S.  Bankruptcy  Court for
the  Northern  District  of  California,  Case No.  93-3-3437  TC,  by  filing a
voluntary  petition for relief under Chapter 11 of the United States  Bankruptcy
Code on July 29, 1993 and remained in possession  pursuant to 11 U.S.C.  Section
1107. In April 1994,  this matter  (excluding the  bankruptcy  court matter) was
transferred to the San Francisco County Superior Court with the California state
actions  referenced in the next  paragraph.  In April 1996,  the Company filed a
plan of  reorganization  with the Bankruptcy  Court to resolve all of its claims
with Drug Barn and its  guarantors.  The plan of  reorganization  provides  for,
among other things,  a sale of all Drug Barn's  assets,  a  distribution  of the
asset sale  proceeds to creditors  and a settlement  of all claims of any nature
between the Company  and Drug Barn (but not its  guarantors,  Milton and Barbara
Sloban).  The Company's plan was confirmed by the  Bankruptcy  Court on June 14,



                                  I -  6

<PAGE>


1996.  The  actions  brought by Milton  and  Barbara  Sloban  and the  Company's
collection  suit  commenced  trial on August 14,  1996 in San  Francisco  County
Superior  Court. On August 29, 1996, the Company won a $3.4 million jury verdict
against Milton and Barbara Sloban. Milton and Barbara Sloban have filed a Notice
of Appeal with the aforementioned court.

            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 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  March  9,  1995,  the  Company  was  named  along  with 30 other
pharmaceutical  industry-related  companies in a separate complaint filed in the
U.S. District Court,  Eastern District of Arkansas entitled LAWRENCE ADAMS D/B/A



                                  I -  7

<PAGE>


MC  SPADDEN  DRUG  STORE,  ET AL.  V.  ABBOTT  LABORATORIES,  ET AL.,  Case  No.
LR-C-95-153,  alleging similar claims as in the Federal  complaint.  The Company
believes that this action will be  consolidated  into the Federal  multidistrict
action.

            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 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 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. On February 9, 1996, the class  plaintiffs filed a
motion for  preliminary  approval of a  settlement  with 15 of the  manufacturer
defendants, which, if approved by the court, would have resulted 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
did not grant  approval for the  settlement and the decision was approved by the
plaintiffs.  A second motion was filed by the class  plaintiffs for  preliminary
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 preliminary approval for the settlement.  The Company
is not a party to this proposed  settlement but retains  protection  afforded by
the sharing agreement  referenced above. In April 1996, the Company's motion for
summary  judgment  was granted and the  Company was  dismissed  from the Federal
Class  Action.

            In November 1995 in the U.S.  District Court,  Northern  District of
Illinois, Abbott Laboratories 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.  The Company has filed  various  counter  claims and has asked for
damages  according  to proof at trial.  This matter is in its initial  discovery
stage.  After discussions with counsel,  management of the Company believes that
the allegations of liability set forth in these lawsuits are without merit as to
the  wholesaler  defendants  and that any  attendant  liability  of the Company,
although  unlikely,  would not have a material  adverse  effect on the Company's
financial position or results of operations.




                                  I - 8

<PAGE>



            The Company is involved in various  additional  items of litigation.
Although the amount of  liability  at  September  30, 1996 with respect to these
items of litigation  cannot be  ascertained,  in the opinion of management,  any
resulting  future  liability  will not have a  material  adverse  effect  on its
financial position or results of operations.



ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

            No matter was  submitted to a vote of  shareowners  during the three
months ended September 30, 1996.


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 annual election of officers 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, 1996, are listed alphabetically as follows:

            LINDA M. BURKETT,  46, 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); Director, Data Processing (1988-1992).

            JOHN   CALASIBETTA,   91,  Senior  Vice  President since  1974.  Mr.
Calasibetta is also a member of the Board of Directors.

            CHARLES  J.  CARPENTER,   47,   Executive  Vice   President,   Chief
Procurement Officer (since September 1996);  Executive Vice President,  Supplier
Relations and Operations  (1995-1996),  Bergen Brunswig Drug Company;  Executive
Vice President, Northeast Region (1994-1995); Vice President, Northeast Region
(1989-1994).

            NEIL F.  DIMICK,  47,  Executive  Vice  President,  Chief  Financial
Officer (since 1992); formerly Vice President,  Finance (1991-1992);  President,
Alternate Site  Distributors,  Inc. (since September 1996). Mr. Dimick is also a
member of the Board of Directors.

            WILLIAM  J.  ELLIOTT,   47,   President,   Bergen  Brunswig  Medical
Corporation (since October 1996). Formerly Senior Vice President of Supply Chain
Management, VHA Inc. (1984-October 1996).



                                  I -  9

<PAGE>


            BRENT R. MARTINI, 37, President, Bergen Brunswig Drug Company (since
September 1996);  Executive Vice President,  Bergen Brunswig Drug Company,  West
Region  (1994-1996);  Vice  President,  Quality  Organizational  Development and
Training (1991-1994); Director, Quality Support Group (1989-1991). Brent R.
Martini is the son of Robert E. Martini.

            ROBERT E. MARTINI,  64, Chairman of the Board (since 1992) and Chief
Executive  Officer  (since  1990 and until  January  1997);  formerly  President
(1981-1992). Mr. Martini is also a member of the Board of Directors.

            JOHN P.  NAUGHTON,  58,  Vice  President  and  Controller  of Bergen
Brunswig Drug Company since 1981.

            DONALD R. RODEN,  50,  President and Chief Operating  Officer (since
1995) and Chief Executive  Officer-Elect  (commencing January 1997);  formerly a
healthcare  industry  consultant  (1993-1995);  formerly Chief Executive,  North
America of Reed Elsevier Medical (publishing)  (1989-1993).  Mr. Roden is also a
member of the Board of Directors.

            MILAN A. SAWDEI,  50,  Secretary  (since July 1992);  Executive Vice
President  (since April 1992);  Chief Legal Officer (since 1989);  formerly Vice
President and Assistant Secretary (1989-1992).

            CAROL E. SCHERMAN,  41,  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);   Director,  Human  Resources  and  Associate  Relations
(1991-1993);  Manager,  Associate Relations (1991); Area Human Resources Manager
(1989-1991).

            ERIC J. SCHMITT,  46, Vice President,  Finance and Treasurer  (since
February 1994); Vice President, Financial Planning (1989-1994).




                                  I -  10

<PAGE>



                                     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, 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  provided  that a dividend  of one  Preferred  Share  Purchase  Right (the
"Rights") was declared for each share of Common Stock  outstanding  at the close
of business on February 18, 1994. The Rights are generally not exercisable until
10 days after a person or group  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  1/100th 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 at the time when there
was a 15%  shareowner,  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.





                                 II -  1

<PAGE>
<TABLE>

Item 6.   SELECTED FINANCIAL DATA (unaudited)

<CAPTION>
----------------------------------------------------------------------------------------------------------------
Dollars in thousands, except for per share amounts
================================================================================================================
                                                           September 30,                       August 31,
                                               ------------------------------------    -------------------------
Years Ended:                                      1996         1995         1994(b)       1993          1992

================================================================================================================
<S>                                            <C>          <C>          <C>           <C>           <C>       
Net sales and other revenues                   $9,942,697   $8,447,607   $7,483,801    $6,823,552    $5,048,309

Earnings from continuing operations                73,533       63,942       56,120(c)     28,607(d)     53,012

Earnings per share from continuing operations        1.83         1.61         1.45(c)       0.75(d)       1.29

Cash dividends per share:
  Class A Common                                    0.480        0.474        0.438         0.381         0.381
  Class B Common                                        -            -        1.996         3.630         3.630

Pre-tax margin (a)                                   1.26%        1.30%        1.31%(c)      0.71%(d)     1.65%


At Years Ended:
================================================================================================================
Total assets                                   $2,489,826   $2,405,530   $1,995,057    $1,772,337    $1,412,177

Long-term obligations                             419,275      557,771      342,094       309,781       245,586

Shareowners' equity                               578,966      519,349      461,851       417,800       395,262

Return on average shareowners' equity (a)           13.39%       13.03%       12.76%(c)      7.04%(d)     12.47%

================================================================================================================

<FN>
(a) From continuing operations.

(b) Reflects change in year-end from August 31 to September 30.

(c) Includes gain recognized from sale of investment securities of $2.9 million, net of income tax of $2.2
    million and provision for an earthquake-related charge of $0.8 million, net of income tax benefit of
    $0.6 million.

(d) Includes provision for restructuring charge of $20.8 million, net of income tax benefit of $12.2 million.
</FN>


                                                              II - 2
</TABLE>

<PAGE>


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


            RESULTS OF OPERATIONS 1996 COMPARED WITH 1995.


            Net sales and other  revenues in fiscal 1996 were 18% higher than in
1995 while operating  earnings and pre-tax  earnings showed increases of 11% and
14%, respectively.

            Of the 18% increase in net sales and other  revenues,  approximately
2% is  attributable  to the  acquisition  of  Colonial  Healthcare  Supply  Co.,
("Colonial")  in  August  1995.  Approximately  16% of the net  sales  and other
revenues increase  reflects  internal growth within both the Company's  existing
pharmaceutical and medical-surgical supply distribution businesses.

            Earnings  per share  increased  14%  compared  to 1995.  The average
number of common and common equivalent shares  outstanding  increased 1% for the
earnings per share computation.

            Cost of sales  increased  18%  compared  to 1995 due  mainly  to the
Company's  increased sales levels.  The overall gross profit as a percent of net
sales and other  revenues  decreased as a result of a decrease in gross  margins
due to continued price competition and a change in customer mix in the Company's
pharmaceutical  distribution  business,  partially  offset  by  sales  from  the
Company's higher gross margin  medical-surgical supply distribution business. In
the pharmaceutical  distribution  industry,  it has been customary to pass on to
customers  price  increases  from   manufacturers.   Investment  buying  enables
distributors  such as the Company,  to benefit from anticipated price increases.
The rate or  frequency  of future  price  increases  by  manufacturers,  or lack
thereof, influences the profitability of the Company.

            Management of the Company  anticipates  further downward pressure on
gross  margins  in the  Company's  pharmaceutical  and  medical-surgical  supply
distribution  businesses  during  fiscal year 1997  because of  continued  price
competition  influenced  by large  customers.  The  Company  expects  that these
pressures on operating  margins may be offset to some extent by increased  sales
of  more  profitable  products,  such  as  generic  drugs  and  medical-surgical
supplies,  and  continued  reduction  of  distribution,   selling,  and  general
administrative  expenses  ("DSG&A")  as a  percentage  of net  sales  and  other
revenues through more efficient operations.

            DSG&A  increased 15% over 1995,  while net sales and other  revenues
increased 18% over the prior year.  These expenses  decreased as a percentage of
net sales and other  revenues  from 4.3% in fiscal 1995 to 4.2% in fiscal  1996.
The  decreased  DSG&A as a  percentage  of net sales and other  revenues  in the
current year reflects continued operating  efficiencies,  including the positive
effects of the continuing  consolidation  of distribution  divisions into larger
regional  distribution  centers,  partially  offset  by  increased  DSG&A in the



                                 II -  3

<PAGE>


Company's medical-surgical supply distribution business,  principally due to the
acquisition of Colonial.

            Net interest  expense  decreased from $30.5 million in 1995 to $30.2
million in 1996,  primarily due to decreased interest on the 5 5/8% Senior Notes
which were repaid on January 15, 1996, and decreased borrowings under the Credit
Agreement,  partially  offset by interest on the 7 1/4% Senior Notes due June 1,
2005 ("7 1/4% Senior Notes") which were issued June 1, 1995.

            The  effective  tax rate in 1996  decreased to 41.30% from 41.60% in
1995  reflecting  the higher  earnings in 1996 and,  therefore,  minimizing  the
impact of non-deductible expenses.

            Inflation  has not been a  significant  factor in either  year.  The
Company  uses the LIFO method of  accounting  for  inventory  which  reduces the
effects of  inflation  by  reporting  the cost of products  sold at  approximate
current cost.


            RESULTS OF OPERATIONS 1995 COMPARED WITH 1994.

            Net sales and other  revenues  in fiscal  1995 were 13% higher  than
1994 while operating  earnings and pre-tax  earnings showed increases of 21% and
12%,  respectively.  Major  influences  which impacted pre-tax earnings for 1994
were a charge of $1.4 million for the uninsured  portion of an  earthquake  loss
incurred  in the second  quarter of fiscal 1994 and a gain  recognized  from the
sale of investment  securities of $5.1 million in the third and fourth  quarters
of fiscal 1994,  equivalent in the aggregate to a net $0.06 per share.  See Note
10 of Notes to Consolidated Financial Statements.

            Of the 13% increase in net sales and other  revenues,  approximately
1% in the aggregate is attributable to the  acquisitions of Colonial  Healthcare
Supply  Co.  ("Colonial")  in  August  1995  and  Southeastern  Hospital  Supply
Corporation  ("Southeastern") in April 1994.  Approximately 12% of the net sales
and other revenues increase reflects internal growth within the Company's
existing pharmaceutical distribution business.

            Earnings per share before  extraordinary loss increased 11% compared
to 1994. The average number of common and common equivalent  shares  outstanding
increased 3% for the earnings per share computation.

            Cost of sales  increased  13%  compared  to 1994 due  mainly  to the
Company's  increased  sales levels.  The overall gross margin as a percentage of
net sales and other  revenues  decreased  due to  continued  price  competition,
partially  offset  by  increased  opportunities  for  investment  buying  in the
Company's  pharmaceutical  distribution  business,  and by a higher mix of sales
from the Company's higher gross margin medical-surgical distribution business.



                                 II -  4

<PAGE>


            DSG&A  increased 10% over 1994,  while net sales and other  revenues
increased 13% over the prior year.  These expenses  decreased as a percentage of
net sales and other  revenues  from 4.4% in fiscal 1994 to 4.3% in fiscal  1995.
The  decreased  DSG&A as a  percentage  of net sales and other  revenues  in the
current year reflects operating  efficiencies achieved from the positive effects
of the Company's restructuring plan adopted for its pharmaceutical  distribution
business in the fourth quarter of fiscal 1993 and the  continuing  consolidation
of distribution  divisions into larger regional distribution centers,  partially
offset by increased DSG&A in the Company's  medical-surgical supply distribution
business.

            Net  interest   expense,   excluding  the   aforementioned   unusual
investment  gain in 1994,  increased from $23.0 million in 1994 to $30.5 million
in 1995,  primarily due to increased  borrowings and higher interest rates under
the Credit  Agreement  and  interest on the new $100 million 7 1/4% Senior Notes
which were issued June 1, 1995.

            The  effective  tax rate in 1995  decreased to 41.60% from 42.80% in
1994  reflecting  the higher  earnings in 1995 and,  therefore,  minimizing  the
impact of non-deductible expenses.


            LIQUIDITY AND CAPITAL RESOURCES

            At September 30, 1996,  capitalization consisted of 41% debt and 59%
equity,  as compared to 51% and 49%,  respectively,  at September 30, 1995.  The
decreased debt percentage  primarily  reflects  decreased  borrowings  under the
Credit Agreement.  Borrowings under the Credit Agreement were $120.0 million and
$159.0  million at  September  30,  1996 and 1995,  respectively.  Cash and cash
equivalents of $21.4 million at September 30, 1996, decreased from $64.4 million
at September 30, 1995,  primarily as a result of decreased  borrowings under the
Credit  Agreement,  partially  offset  by an  increase  in net cash  flows  from
operating   activities   (principally   due  to  a  decrease  in  investment  in
inventories, net of trade accounts payable).

            On March 15, 1996, the Credit  Agreement was amended to, among other
things,  increase  the  maximum  borrowing  to $400  million  and to extend  the
maturity date to March 15, 2001. See Note 2 of Notes to  Consolidated  Financial
Statements.

            On January 15, 1996, the Company  repaid the $100 million  aggregate
principal amount of its 5 5/8% Senior Notes plus accrued  interest.  These notes
were issued in January  1993  pursuant to the $400  million  shelf  registration
filed by the Company in December 1992.

            The Company filed a shelf registration statement with the Securities
and  Exchange   Commission  which  became  effective  on  March  27,  1996.  The
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 used the net proceeds
from the sale of any such securities for general corporate  purposes,  which may
include, without limitations, the repayment of indebtedness of the Company or of




                                 II -  5

<PAGE>


any of its subsidiaries, possible acquisitions, capital expenditures and working
capital needs. See Note 2 of Notes to Consolidated Financial Statements.

      On November 11,  1996,  the Company  announced  that it had entered into a
definitive merger agreement with IVAX Corporation ("IVAX").  IVAX, headquartered
in Miami,  Florida,  is a  holding  company  with  subsidiaries  engaged  in the
research,  development,  manufacture  and  marketing  of health  care  products,
including generic and branded pharmaceuticals, intravenous solutions and related
products,  and IN VITRO diagnostics.  The agreement,  which has been unanimously
approved  by the Board of  Directors  of the  Company  and  IVAX,  calls for the
formation of a new combined  company to be known as BBI  Healthcare  Corporation
("BBI"), which will be headquartered in Miami, Florida. Under the agreement, BBI
will  acquire  both the  Company and IVAX  through an exchange of common  stock,
whereby  IVAX  shareowners  will  receive 0.42 shares of common stock of BBI for
each share of IVAX common stock and the Company's  shareowners will receive 1.00
share of BBI common stock for each share of Class A Common Stock of the Company.
After the  merger,  BBI is  expected  to have  approximately  91 million  shares
outstanding of which the Company and IVAX  shareowners  will hold  approximately
44% and 56%, respectively.

      The merger is expected to be accounted for as a pooling of interests,  and
is  expected  to be  tax-free  to  shareowners.  The merger is expected to close
during the first calendar quarter of 1997, subject to regulatory approvals,  the
approval of the Company and IVAX shareowners, and certain other conditions.

            On August 7,  1996,  the  Company  acquired  certain  net  assets of
Oncology  Supply  Company,  a  privately-held  oncology  supply  distributor for
approximately  $5.8 million in cash plus expenses and the  assumption of certain
liabilities. See Note 4 of Notes to Consolidated Financial Statements.

            Dividends on Class A Common Stock  amounted to $19.2 million in 1996
compared to $18.8 million in 1995. Dividends on Class A and Class B Common Stock
were $17.0 million in 1994. The increase from 1994 to 1995 resulted,  primarily,
from a 20% increase in the quarterly dividend rate on both the Class A and Class
B Common  Stock  during the second  quarter  of fiscal  1994.  Shares of Class B
Common Stock were converted into shares of the Company's Class A Common Stock in
February  1994  and  all  shares  of  Class B  Common  Stock  were  subsequently
cancelled.  While the  Company  has no policy  with  regard  to the  payment  of
dividends, during the three-year period ended September 30, 1996, dividends have
averaged 28% of earnings.

            Capital  expenditures  for  1996  were  $16.7  million  and  related
principally to additional investments in existing locations,  the acquisition of
automated  warehouse  equipment and additional  investments  in data  processing
equipment.

            In October 1995,  the Financial  Accounting  Standards  Board issued
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation,"  which  requires  adoption of the  disclosure  provisions for the



                                 II -  6

<PAGE>

Company's fiscal year beginning  October 1, 1996 and adoption of the recognition
and  measurement  provisions for  non-employee  transactions  entered into after
December 15, 1995. The Company  intends to adopt this standard in fiscal 1997 by
making the required footnote disclosures only.  Therefore,  the adoption of this
new  standard  will  have no  effect  on the  Company's  consolidated  financial
position,  results  of  operations  or  cash  flows.  See  Note  3 of  Notes  to
Consolidated Financial Statement.

            In  June  1996,  the  Financial  Accounting  Standard  Board  issued
Statement of Financial  Accounting  Standards No. 125, "Accounting for Transfers
and Servicing of Financial Assets and  Extinguishments  of  Liabilities,"  which
requires recognition of financial assets and liabilities,  including receivables
sold with  recourse,  using a  financial-components  approach  which  focuses on
control of the assets transferred.  This standard is effective for transfers and
servicing of financial assets and extinguishments of liabilities occurring after
December 31, 1996.  Management  believes the adoption of this new standard  will
not  have a  material  effect  on the  consolidated  financial  position  of the
Company.

            The  Company's  working  capital of $440.6  million at September 30,
1996 decreased from the $515.5 million at September 30, 1995 and represented 18%
of total assets at September 30, 1996.  The Company's  current ratio was 1.30 at
September 30, 1996,  compared to 1.39 at September 30, 1995.  Trade  receivables
outstanding  were 19 days for 1996 and 18 days for 1995. The inventory  turnover
rate on a FIFO basis was 7.0 times for 1996 and 6.9 times for 1995.

            The  Company  believes  that  internally   generated  funds,   funds
available under the existing Credit  Agreement and funds  potentially  available
under the exiting shelf registration will be sufficient to meet anticipated cash
and capital needs.



                                 II -  7

<PAGE>

<TABLE>
Item 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

          a.     Supplementary Data


SELECTED QUARTERLY RESULTS (unaudited)

<CAPTION>
Dollars in thousands, except for per share amounts
==================================================================================================================================
                                              First               Second           Third              Fourth           Fiscal
Year Ended September 30, 1996                Quarter             Quarter          Quarter             Quarter           Year
==================================================================================================================================
<S>                                        <C>               <C>               <C>               <C>               <C>       
Net sales and other revenues                   $2,377,362        $2,454,360        $2,492,194        $2,618,781        $9,942,697
Gross margin                                      134,227           147,883           144,892           146,802           573,804
Net earnings                                       15,627            20,389            19,195            18,322            73,533

Earnings per share                                   0.39              0.51              0.48              0.45              1.83
Cash dividends per Class A Common share             0.120             0.120             0.120             0.120             0.480

Market prices per Class A Common share         $26-20 1/2    $27 3/8-24 1/8    $28 3/8-25 3/8    $32 1/2-24 3/4    $32 1/2-20 1/2


Year Ended September 30, 1995
==================================================================================================================================
Net sales and other revenues                   $1,983,863        $2,084,216        $2,157,361        $2,222,167        $8,447,607
Gross margin                                      115,943           127,548           124,050           135,670           503,211
Net earnings                                       13,549            17,864            16,875            15,654            63,942

Earnings per share                                   0.35              0.45              0.42              0.39              1.61
Cash dividends per Class A Common share             0.114             0.120             0.120             0.120             0.474

Market prices per Class A Common share     $19 7/8-13 5/8    $29 1/8-19 1/8        $27 3/4-21    $24 3/8-19 1/4    $29 1/8-13 5/8

==================================================================================================================================

<FN>
     Bergen Brunswig Corporation Class A Common Stock is listed on the New York Stock Exchange.  There were approximately 2,500
     Class A Common Stock shareowners of record on September 30, 1996.
</FN>


                                                               II - 8
</TABLE>

<PAGE>
<TABLE>
          b.     Financial Statements


STATEMENTS OF CONSOLIDATED EARNINGS AND RETAINED EARNINGS

<CAPTION>
Dollars in thousands, except for per share amounts
===================================================================================================

Years Ended September 30,                                    1996          1995          1994
===================================================================================================
<S>                                                         <C>           <C>           <C>       
CONSOLIDATED EARNINGS

Net sales and other revenues                                $9,942,697    $8,447,607    $7,483,801
                                                        -------------------------------------------
Costs and expenses:
  Cost of sales                                              9,368,893     7,944,396     7,036,249
  Distribution, selling, general and
    administrative expenses                                    418,364       363,179       331,530
                                                        -------------------------------------------
    Total costs and expenses                                 9,787,257     8,307,575     7,367,779
                                                        -------------------------------------------
Operating earnings                                             155,440       140,032       116,022
Net interest expense                                            30,170        30,542        17,910
                                                        -------------------------------------------
Earnings before taxes on income                                125,270       109,490        98,112
Taxes on income                                                 51,737        45,548        41,992
                                                        -------------------------------------------
Net earnings                                               $    73,533   $    63,942   $    56,120
                                                        ===========================================


EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE            $      1.83   $      1.61   $      1.45
                                                        ===========================================


CONSOLIDATED RETAINED EARNINGS

Balance at beginning of year                               $   378,229   $   378,867   $   342,166
Net earnings                                                    73,533        63,942        56,120
5% stock dividend on Class A Common Stock                            -       (44,207)            -
Excess cost of Treasury shares issued for an acquisition             -        (1,579)       (2,457)
Cash dividends on Class A Common Stock ($0.480 in
  1996, $0.474 in 1995 and $0.438 in 1994 per share)           (19,182)      (18,794)      (16,751)
Cash dividends on Class B Common Stock ($1.996
  per share)                                                         -             -          (211)
                                                        -------------------------------------------
Balance at end of year                                     $   432,580   $   378,229   $   378,867
                                                        ===========================================



===================================================================================================
<FN>
See accompanying Notes to Consolidated Financial Statements.
</FN>


                                              II - 9
</TABLE>

<PAGE>
<TABLE>

CONSOLIDATED BALANCE SHEETS

<CAPTION>
Dollars in thousands
===============================================================================================

September 30,                                                          1996          1995
===============================================================================================
<S>                                                                  <C>           <C>        
ASSETS

Current assets:
  Cash and cash equivalents                                          $    21,408   $    64,400
  Accounts and notes receivable, less allowance for
    doubtful receivables: 1996, $23,459; 1995, $21,364                   667,255       603,830
  Inventories                                                          1,220,975     1,158,465
  Income taxes receivable                                                 13,915         4,801
  Prepaid expenses                                                         8,656        12,389
                                                                   ----------------------------
      Total current assets                                             1,932,209     1,843,885
                                                                   ----------------------------



Property - at cost:
  Land                                                                    12,452        12,443
  Buildings and leasehold improvements                                    79,048        81,729
  Equipment and fixtures                                                 163,827       144,562
                                                                   ----------------------------
    Total property                                                       255,327       238,734
  Less accumulated depreciation and amortization                         112,600        85,675
                                                                   ----------------------------
      Property - net                                                     142,727       153,059
                                                                   ----------------------------



Other assets:
  Excess of cost over net assets of acquired companies                   339,030       341,125
  Other investments                                                        5,161         3,799
  Noncurrent receivables                                                   9,939         7,706
  Deferred charges and other assets                                       60,760        55,956
                                                                   ----------------------------
      Total other assets                                                 414,890       408,586
                                                                   ----------------------------
      Total assets                                                    $2,489,826    $2,405,530
                                                                   ============================


===============================================================================================
<FN>
See accompanying Notes to Consolidated Financial Statements.
</FN>


                                           II - 10

</TABLE>

<PAGE>
<TABLE>

CONSOLIDATED BALANCE SHEETS

<CAPTION>
Dollars in thousands
===============================================================================================

September 30,                                                          1996          1995
===============================================================================================
<S>                                                                   <C>           <C>       
LIABILITIES AND SHAREOWNERS' EQUITY

Current liabilities:
  Accounts payable                                                    $1,249,167    $1,140,466
  Accrued liabilities                                                     92,005        84,500
  Customer credit balances                                               133,282        94,766
  Deferred income taxes                                                   16,006         7,353
  Current portion of long-term obligations                                 1,125         1,325
                                                                   ----------------------------
      Total current liabilities                                        1,491,585     1,328,410
                                                                   ----------------------------
Long-term obligations:
  7 3/8% senior notes                                                    149,300       149,189
  7 1/4% senior notes                                                     99,696        99,662
  5 5/8% senior notes                                                          -        99,983
  Revolving bank loan payable                                            120,000       159,000
  7% convertible subordinated debentures                                  20,609        20,914
  6 7/8% exchangeable subordinated debentures                              8,425        10,575
  Deferred income taxes                                                    3,489         2,719
  Other                                                                   17,756        15,729
                                                                   ----------------------------
    Total long-term obligations                                          419,275       557,771
                                                                   ----------------------------
Shareowners' equity:
  Capital stock:
    Preferred - Authorized 3,000,000 shares; issued: none                      -             -
    Class A Common - Authorized 100,000,000 shares;
      issued: 1996, 44,416,940 shares; 1995, 44,183,074 shares            66,626        66,275
  Paid-in capital                                                        167,308       163,075
  Net unrealized gain (loss) on investments, net of income
    tax of: 1996, $231; 1995, $(121)                                         363          (319)
  Retained earnings                                                      432,580       378,229
                                                                   ----------------------------
      Total                                                              666,877       607,260
  Less Treasury shares, at cost: 1996 and 1995, 4,354,558 shares          87,911        87,911
                                                                   ----------------------------
      Total shareowners' equity                                          578,966       519,349
                                                                   ----------------------------
      Total liabilities and shareowners' equity                       $2,489,826    $2,405,530
                                                                   ============================


===============================================================================================
<FN>
See accompanying Notes to Consolidated Financial Statements.
</FN>


                                           II - 11
</TABLE>

<PAGE>
<TABLE>

STATEMENTS OF CONSOLIDATED CASH FLOWS

<CAPTION>
Dollars in thousands
============================================================================================================

Years Ended September 30,                                              1996          1995         1994
============================================================================================================
<S>                                                                  <C>          <C>           <C>        
OPERATING ACTIVITIES

Net earnings                                                         $    73,533  $    63,942   $    56,120
Adjustments to reconcile net earnings to net cash flows
  from operating activities:
    Provision for doubtful accounts                                        8,213        5,810         7,060
    Depreciation and amortization of property                             25,183       21,474        19,065
    Deferred compensation                                                  2,242        1,394           949
    Amortization of customer lists                                         1,749        1,749         1,749
    Amortization of excess of cost over net assets
      of acquired companies                                                9,647        9,003         8,696
    Deferred income taxes                                                  9,070        3,178        (3,545)
    Amortization of original issue discount on senior notes                  162          180           168
    Amortization of other intangible assets                                1,645        1,748         1,657
    Loss (gain) on dispositions of property                                   12        1,570        (1,229)
    Effects of changes, net of acquisitions:
      Receivables                                                        (76,926)     (74,683)      (49,625)
      Inventories                                                        (60,699)    (225,555)     (241,585)
      Prepaid expenses and other assets                                   (5,985)        (423)       (1,965)
      Accounts payable                                                   108,701      129,553       109,890
      Accrued liabilities                                                  2,252      (31,223)        9,736
      Customer credit balances                                            38,516       11,979        12,542
      Income taxes payable                                                (9,114)      (2,514)        5,509
                                                                  ------------------------------------------
        Net cash flows from operating activities                         128,201      (82,818)      (64,808)
                                                                  ------------------------------------------

INVESTING ACTIVITIES

(Sale) purchase of other investments                                        (327)      17,824        (1,769)
Proceeds from sale of notes receivable with recourse                       7,712       13,791        14,831
Property acquisitions                                                    (16,696)     (41,078)      (24,876)
Proceeds from dispositions of property                                     1,833        7,228         2,204
Acquisition of businesses, less cash acquired                             (5,999)     (50,983)       (2,701)
                                                                  ------------------------------------------
        Net cash flows from investing activities                         (13,477)     (53,218)      (12,311)
                                                                  ------------------------------------------

FINANCING ACTIVITIES

Repayment of senior notes                                               (100,000)           -             -
Repayment of revolving bank loan                                         (39,000)           -             -
Redemption of exchangeable subordinated debentures                        (2,150)           -          (330)
Redemption of convertible subordinated debentures                           (305)         (20)       (2,212)
Repayment of other obligations                                            (2,565)      (6,556)      (14,370)
Increase in other obligations                                                902            -             -
Proceeds from revolving bank loan                                              -      119,000        30,000
Proceeds from issuance of senior notes                                         -       99,650             -
Shareowners' equity transactions:
  Exercise of stock options                                                4,584        1,892           495
  Cash dividends on Common Stock                                         (19,182)     (18,794)      (16,962)
                                                                  ------------------------------------------
        Net cash flows from financing activities                        (157,716)     195,172        (3,379)
                                                                  ------------------------------------------
Net (decrease) increase in cash and cash equivalents                     (42,992)      59,136       (80,498)
Cash and cash equivalents at beginning of year                            64,400        5,264        85,762
                                                                  ------------------------------------------
Cash and cash equivalents at end of year                             $    21,408  $    64,400    $    5,264
                                                                  ==========================================


============================================================================================================
<FN>
See accompanying Notes to Consolidated Financial Statements.
</FN>


                                                  II - 12
</TABLE>
<PAGE>



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 1996, 1995, AND 1994


1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      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
1996 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.

      The Company  records  revenues  when  product is shipped or  services  are
provided to its customers.  Net sales and other revenues include service fees of
$1.1  million,  $5.4 million and $4.4 million for the years ended  September 30,
1996,   1995,   and  1994,   respectively,   related   to  bulk   shipments   of
pharmaceuticals.

      The Company considers all highly liquid debt instruments purchased with an
original  maturity  of  three  months  or  less to be  cash  equivalents.  Other
investments include primarily debt instruments, principally variable rate demand
notes having maturities of more than one year.

      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 unrealized gains and losses at September 30, 1996
and 1995 and  realized  gains and  losses  for the  years  then  ended  were not
material.

      Inventories  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 at September
30, 1996, by $144.1 million and at September 30, 1995, by $147.0 million.

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



                                 II -  13

<PAGE>


      The  excess  of  cost  over  net  assets  of  acquired  companies  (net of
accumulated  amortization of $47.6 million at September 30, 1996;  $38.0 million
at September 30, 1995) is amortized on a straight-line basis principally over 40
years.  Customer  lists,  included in deferred  charges and other assets,  ($8.8
million at September 30, 1996, net of accumulated amortization of $17.4 million;
$10.5 million at September 30, 1995,  net of accumulated  amortization  of $15.7
million) are amortized on a  straight-line  basis over 15 years. At each balance
sheet date,  management  reviews  tangible  and  intangible  assets for possible
impairment  based on  several  criteria,  including,  but not  limited  to sales
trends, undiscounted operating cash flows and other operating factors.

      Noncurrent   receivables  include  notes  receivable  from  employees  and
officers due at the Company's  discretion in the amount of $3.6 million and $3.2
million at September 30, 1996 and 1995, respectively.

      In June 1996, the Financial  Accounting  Standards Boards issued Statement
of  Financial  Accounting  Standards  No. 125,  "Accounting  for  Transfers  and
Servicing  of  Financial  Assets  and  Extinguishments  of  Liabilities,"  which
requires recognition of financial assets and liabilities,  including receivables
sold with  recourse,  using a  financial-components  approach  which  focuses on
control of the assets transferred.  This standard is effective for transfers and
servicing of financial assets and extinguishments of liabilities occurring after
December 31, 1996.  Management  believes the adoption of this new standard  will
not  have a  material  effect  on the  consolidated  financial  position  of the
Company.


2.    BORROWING ARRANGEMENTS

      On March 15, 1996, the Company's credit agreement (the "Credit Agreement")
with a group of domestic  and foreign  banks was amended to,  among other things
increase the maximum  borrowing  to $400  million,  extend the maturity  date to
March  15,  2001,  and  allow   borrowing  under   discretionary   credit  lines
("discretionary lines") outside of the Credit Agreement.  Borrowings outstanding
under the Credit  Agreement were $120 million at September 30, 1996. The maximum
outstanding borrowings under the Credit Agreement including  discretionary lines
for the year ended September 30, 1996 were $319 million.

      On May 23, 1995, the Company sold $100 million aggregate  principal amount
of 7 1/4% Senior Notes due June 1, 2005 (the "7 1/4% Senior Notes").  On June 1,
1995,  the Company  received net proceeds of $99.0 million  (after  underwriting
discount of $0.6 million)  from the 7 1/4% Senior Notes.  Interest on the 7 1/4%
Senior Notes is payable semi-annually on June 1 and December 1 of each year. The
net  proceeds  were used to reduce  the  outstanding  balance  under the  Credit
Agreement.  On  January  14,  1993,  the  Company  sold $100  million  aggregate
principal  amount of 5 5/8%  Senior  Notes  due  January  15,  1996 (the "5 5/8%
Notes") and $150 million  aggregate  principal amount of 7 3/8% Senior Notes due
January 15, 2003 (the "7 3/8% Notes").  On January 15, 1996,  the Company repaid
the $100  million  aggregate  principal  amount of the 5 5/8% Notes plus accrued
interest.  The 7 1/4% Notes and 7 3/8% Notes were  issued  pursuant  to the $400
million  shelf  registration  filed by the Company in December  1992 and are not



                                 II -  14

<PAGE>

redeemable prior to maturity and are not entitled to any sinking fund.  Interest
on the 7 3/8% Notes is payable  semi-annually  on January 15 and July 15 of each
year.  The  carrying  value of 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 filed a shelf  registration  statement with the Securities and
Exchange  Commission  which became effective on March 27, 1996. The 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 the
sale of any such securities for general corporate  purposes,  which may include,
without  limitations,  the repayment of indebtedness of the Company or of any of
its  subsidiaries,  possible  acquisitions,  capital  expenditures  and  working
capital  needs.  Pending such  application,  the net proceeds may be temporarily
invested in short-term securities.  No offering has occurred since the effective
date of the the registration statement. Any offering of such securities shall be
made only by means of prospectus.

      In July 1986,  the Company  issued  $43.0  million of 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.  On July 15, 1996, the Company
elected to redeem an additional  $2.2 million of principal  amount of the 6 7/8%
Debentures  plus accrued  interest.  Between  March 1990 and July 15,  1996,  an
additional  $0.3  million  aggregate  principal  amount had been  redeemed.  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  7%  Convertible  Subordinated  Debentures  due  March 1,  2006  (the "7%
Debentures").  The  acquisition  of Durr by the Company  resulted in each holder
receiving the right,  at such  holder's  option,  to require Durr to redeem,  on
November 22, 1992,  all or any portion of such holder's 7%  Debentures  for cash
equal to the  principal  amount  plus all accrued  interest  to that date.  As a
result,  the  Company  redeemed  $45.6  million  aggregate  principal  amount on
November  23,  1992.  Since  that  date an  additional  $2.8  million  aggregate
principal  amount has been  redeemed.  The  remaining  unredeemed  7% Debentures
receive interest on March 1 and September 1 of each year.

      Cash paid for interest, net of amounts capitalized ($0.5 million in 1994),
was $31.3  million,  $28.4  million and $24.1 million in 1996,  1995,  and 1994,
respectively.

      Scheduled future principal  payments of long-term  obligations,  excluding
deferred income taxes,  for the next five fiscal years are $1.1 million in 1997,
$1.0  million in 1998,  $4.9 million in 1999,  $0.9 million in 2000,  and $121.0
million in 2001.



                                 II -  15

<PAGE>


3.    CAPITAL STOCK, PAID-IN CAPITAL AND STOCK OPTIONS

      The authorized capital stock of the Company consists of 100,000,000 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 to determine the relative rights,  preferences and
limitations of the shares of any class or 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,  after payment to the owners of the  Preferred  Stock of
the full  amounts to which  they have a  liquidation  preference,  the owners of
Common  Stock  shall be entitled  to receive a  distribution  of all assets then
remaining.

      On  February 9, 1994,  the Board  adopted a  Shareowner  Rights Plan which
provided that a dividend of one Preferred  Share  Purchase  Right (the "Rights")
was declared for each share of Common Stock outstanding at the close of business
on February 18, 1994.  The Rights are  generally not  exercisable  until 10 days
after a person or group  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  1/100th 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 at the time when there was a
15%  shareowner,  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 February  24, 1994 (the  "Conversion  Date"),  in  accordance  with the
provisions of the Recapitalization Plan approved by the Company's shareowners on
January 31, 1989,  all of the 100,492 then  outstanding  shares of the Company's
Class B Stock were automatically  converted into shares of the Company's Class A
Common Stock at the stated  conversion  rate of 9.5285  shares of Class A Common
Stock for each share of Class B Common Stock. All shares of Class B Common Stock
were subsequently cancelled.



                                 II -  16

<PAGE>


      Changes in Class A and Class B Common Stock,  Paid-in capital and Treasury
shares for the fiscal years ended  September  30, 1996,  1995,  and 1994 were as
follows:

<TABLE>
<CAPTION>
                                      CLASS A COMMON  CLASS B COMMON
                                      --------------  --------------   PAID-IN   TREASURY
   DOLLARS AND SHARES IN THOUSANDS    SHARES  AMOUNT  SHARES  AMOUNT   CAPITAL   SHARES
   --------------------------------------------------------------------------------------
   <S>                                <C>    <C>      <C>     <C>     <C>       <C>       
   Balance September 30, 1993         43,026 $64,539    101    $151   $156,312  $(152,586)
   Exercise of stock options              75     113      -       -        733       (351)
   Conversion of Class B
     Common Stock into
     Class A Common Stock                958   1,436   (101)   (151)    (1,286)         -
   Recapitalization costs                  -       -      -       -       (680)         -
   Acquisition of Southeastern
     Hospital Supply Corporation           -       -      -       -          -     15,098
   Adjustment of Healthcare
     Distribution of Indiana, Inc.
     acquisition price                     -       -      -       -          -       (344)
                                      ---------------------------------------------------
   Balance, September 30, 1994        44,059  66,088      -       -    155,079   (138,183)
   5% Class A Common
     Stock dividend                        -       -      -       -      5,996     38,185
   Exercise of stock options             124     187      -       -      2,000       (295)
   Acquisition of Biddle &
     Crowther Company                      -       -      -       -          -     12,382
                                      ---------------------------------------------------

   Balance, September 30, 1995        44,183  66,275      -       -    163,075    (87,911)
   Exercise of stock options             234     351      -       -      4,233          -
                                      ---------------------------------------------------

   Balance, September 30, 1996        44,417 $66,626      - $     -   $167,308  $ (87,911)
                                      ===================================================
</TABLE>

      At September 30, 1996, there were outstanding  options to purchase 131,178
shares of Class A Common  Stock,  under a 1983 stock option plan,  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 this plan.

      The Company has an amended and restated  1989 stock  incentive  plan which
authorizes  the granting of stock  options to officers,  key employees and other
recipients to purchase  shares of Class A Common Stock within a ten-year  period
from  date  of  grant  at a  price  per  share  as may  be set by the  Company's
Compensation/Stock  Option  Committee.  The number of shares available for grant
under the plan is  formula-based,  providing that, upon certain  conditions,  no
more than 1% of the number of issued shares at the immediately  preceding fiscal
year-end may be added to the shares  available  for the grant pool in any fiscal
year to this class of  optionees.  Stock  option  grants are also  available  to
non-employee  directors  and only at a price per share equal to the market value
on the grant date. At September 30, 1996,  there were 354,562  shares  available
for grant under the plan, with 106,319  specifically  reserved for  non-employee
directors.

      Stock appreciation  rights may be offered to some or all of the employees,
but not  non-employee  directors,  who hold or receive options granted under the
stock  option  plans.  No  stock  appreciation  rights  were  outstanding  as of
September 30, 1996, 1995, or 1994.

      In October 1995, the Financial Accounting Standards Board issued Statement
of  Financial   Accounting   Standards  No.  123,  "Accounting  for  Stock-Based



                                 II -  17

<PAGE>

Compensation,"  which  requires  adoption of the  disclosure  provisions for the
Company's fiscal year beginning  October 1, 1996 and adoption of the recognition
and  measurement provisions  for  non-employee  transactions  entered into after
December 15, 1995.  The new standard  defines a fair value method of  accounting
for stock  options and other equity  instruments.  Under the fair value  method,
compensation  cost is  measured at the grant date based on the fair value of the
award and is recognized  over the service  period,  which is usually the vesting
period.

      Pursuant to the new standard,  companies are encouraged, but not required,
to  adopt  the  fair  value  method  of  accounting  for  employee   stock-based
transactions.  Companies  are also  permitted  to  continue  to account for such
transactions  under Accounting  Principles Board Opinion No. 25, "Accounting for
Stock Issued to  Employees,"  but would be required to disclose in a note to the
financial  statements  pro forma net earnings  and, if  presented,  earnings per
share as if the Company had applied the new method of accounting.

      The  accounting  requirements  of the new  method  are  effective  for all
employee awards granted after the beginning of the fiscal year of adoption.  The
Company  intends to adopt this  standard in fiscal  1997 by making the  required
footnote disclosures only. Therefore, the adoption of the new standard will have
no  effect  on  the  Company's  consolidated  financial  position,   results  of
operations or cash flows.

      Changes in the number of shares represented by outstanding  options during
the years ended September 30, 1996, 1995, and 1994 are summarized as follows:

<TABLE>
<CAPTION>

                                                                          1996         1995         1994
      -----------------------------------------------------------------------------------------------------

     <S>                                                               <C>          <C>          <C>    
      Outstanding at beginning of year                                 1,409,094    1,282,983      929,775
      Options granted (1996, $21.56 to $28.75 per share; 1995,
        $15.00 to $22.63 per share; 1994, $14.29 to $16.90 per share)    755,000      319,500      542,325
      Options exercised (1996, $7.42 to $21.19  per share; 1995,
        $7.42 to $21.29 per share; 1994,$7.42 to $12.42 per share)      (233,866)    (126,432)     (78,791)
      Options cancelled                                                  (40,802)     (66,957)    (110,326)
                                                                       ----------------------------------- 
      Outstanding at end of year (1996, $7.42 to $28.75 per share)     1,889,426    1,409,094    1,282,983
                                                                       =================================== 

</TABLE>

      At September 30, 1996,  options for 666,732 shares were  exercisable.  The
remaining  options  become  exercisable  in the following  fiscal  years:  1997,
423,691 shares;  1998,  363,171 shares;  1999,  250,332  shares;  2000,  185,500
shares.

      At September 30, 1996, an aggregate of 2,935,658  shares of Class A Common
Stock was reserved for the exercise of stock options and for issuance  under the
elective retirement savings plan (see Note 8).



                                 II -  18

<PAGE>



4.    ACQUISITIONS

      On August 7, 1996,  the Company  completed the  acquisition of certain net
assets of Oncology Supply Company ("Oncology"), a privately-held oncology supply
distributor  located in Dothan,  Alabama.  The Company paid  approximately  $5.8
million in cash, plus expenses of $.2 million,  acquired assets of fair value of
approximately  $6.5  million  and  assumed  liabilities  of  approximately  $5.6
million.  The  Company  recorded  an excess of cost over net assets  acquired of
approximately $5.1 million in the transaction.

      On August 2, 1995,  the  Company  completed  the  acquisition  of Colonial
Healthcare Supply Co.  ("Colonial"),  a privately-held  medical-surgical  supply
distributor  headquartered in Lake Zurich,  Illinois,  for  approximately  $50.7
million in cash.  The  Company  acquired  assets at fair value of  approximately
$47.3 million and assumed liabilities of approximately $19.7 million,  including
approximately  $2.7 million of  long-term  debt which was paid by the Company on
the acquisition  date. This  acquisition was financed from borrowings  under the
Credit  Agreement.  The  Company  recorded  an excess  of cost  over net  assets
acquired of approximately $23.1 million in the transaction.

      On January 10,  1995 the Company  completed  the  acquisition  of Biddle &
Crowther Company ("B&C"), a privately-held  medical-surgical  supply distributor
headquartered in Seattle, Washington for 643,604 shares of the Company's Class A
Common Stock,  previously held as Treasury shares. The transaction was valued at
approximately  $10.8 million,  plus expenses,  acquired  assets at fair value of
approximately  $12.0  million  and assumed  liabilities  of  approximately  $5.2
million.  The  Company  recorded  an excess of cost over net assets  acquired of
approximately $4.4 million in the transaction.

      On August 31, 1994, the Company  completed the  acquisition of certain net
assets of  Professional  Medical Supply Co., a  privately-held  medical-surgical
supply distributor located in Denver,  Colorado.  The Company paid approximately
$2.4  million  in  cash,  plus  expenses,  acquired  assets  at  fair  value  of
approximately  $0.5 million,  including  excess of cost over net assets acquired
and other intangible assets of $1.9 million.

      On April 29, 1994, the Company  completed the  acquisition of Southeastern
Hospital Supply Corporation  ("Southeastern"),  a privately-held  medical supply
distributor located in Fayetteville,  North Carolina,  for 784,793 shares of the
Company's Class A Common Stock,  previously held as Treasury  shares,  valued at
approximately  $12.6 million,  plus expenses,  acquired  assets at fair value of
approximately  $23.9  million and assumed  liabilities  of  approximately  $16.3
million  including  approximately  $6.7  million of debt,  which was paid by the
Company on the acquisition date. The Company recorded an excess of cost over net
assets acquired of approximately $5.4 million in the transaction.


5.    EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE

      Earnings per common and common  equivalent share are based on the weighted
average number of shares of Class A Common Stock  outstanding  during each year,
the  assumed  conversion  of the  weighted  average  number of shares of Class B



                                 II -  19

<PAGE>


Common Stock outstanding  during each year through the Conversion Date (see Note
3) and the assumed  exercise  of dilutive  employees'  stock  options  (less the
number of Treasury  shares  assumed to be purchased  from the proceeds using the
average market price of the Company's Class A Common Stock).  Earnings per share
are based  upon  40,259,072  shares  in 1996;  39,800,954  shares  in 1995;  and
38,683,775 shares in 1994.


6.    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  2008,
excluding  renewal options.  Future minimum rental  commitments at September 30,
1996, under operating leases having  noncancelable  lease terms in excess of one
year,  aggregated $48.8 million, with rental payments during the five succeeding
years of $16.5  million,  $11.8  million,  $8.8  million,  $5.1 million and $2.3
million, respectively. Future minimum rentals to be received under noncancelable
subleases at September  30, 1996 were not material.  Net rental  expense for the
years ended  September  30,  1996,  1995,  and 1994,  was $17.9  million,  $17.0
million,  and $15.9 million,  respectively,  after deducting  sublease income of
$0.1 million, $0.1 million, and $0.2 million, respectively.


7.    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  basis and the tax
basis 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  Federal  and  state  taxes on income  for the  fiscal  years  ended
September 30, 1996, 1995, and 1994 are summarized as follows:

<TABLE>
<CAPTION>

      DOLLARS IN THOUSANDS              1996        1995        1994
      ------------------------------------------------------------------
     <S>                               <C>         <C>         <C>    
      Currently payable
        Federal                        $35,985     $35,865     $36,818
        State                            6,682       6,505       6,588
      Deferred (principally Federal)     9,070       3,178      (1,414)
                                       -------------------------------

            Total                      $51,737     $45,548     $41,992
                                       ===============================

</TABLE>



                                 II -  20

<PAGE>



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


<TABLE>
<CAPTION>

      DOLLARS IN THOUSANDS                             1996        1995        1994
      -------------------------------------------------------------------------------
      <S>                                             <C>         <C>         <C>    
      Statutory Federal income tax rate applied
        to earnings before taxes on income            $43,844     $38,322     $34,340
      Increase (decrease) in taxes resulting from:
        Amortization of excess of cost over
          net assets of acquired companies              2,447       3,055       2,912
        State income taxes - net of Federal benefits    4,992       4,610       4,141
        Governmental investment income                   (157)       (366)       (348)
        Other                                             611         (73)        947
                                                      -------------------------------
      Total taxes on income                           $51,737     $45,548     $41,992
                                                      ===============================

</TABLE>

      The tax effects of significant items comprising the Company's net deferred
tax liability as of September 30, 1996 and 1995 are as follows:

<TABLE>
<CAPTION>

      DOLLARS IN THOUSANDS                                   1996        1995
      ------------------------------------------------------------------------
      <S>                                                  <C>         <C>    
      Deferred tax liabilities:
        Inventory basis difference due to LIFO
            method and uniform capitalization              $38,602     $31,947
        Accelerated depreciation                             8,722       7,967
        Other                                                2,918       3,307
                                                           -------------------
            Total                                           50,242      43,221
                                                           -------------------
      Deferred tax assets:
        Reserves for doubtful receivables                   12,527      12,217
        Restructuring charge not currently deductible        2,203       3,777
        Vacation pay not currently deductible                1,659       1,566
        Accrued liabilities not currently deductible        13,641      12,554
        Other                                                  717       3,035
                                                           -------------------
            Total                                           30,747      33,149
                                                           -------------------

      Net deferred tax liability                           $19,495     $10,072
                                                           ===================
</TABLE>


      Deferred  taxes result from temporary  differences  in the  recognition of
revenues and expenses for tax and  financial  reporting  purposes.  During 1995,
deferred taxes were increased to reflect purchase accounting on acquisitions.

      Cash paid for income taxes was $51.1  million,  $41.0  million,  and $39.0
million in 1996, 1995, and 1994, respectively.

      In the opinion of management of the Company,  no valuation reserve related
to deferred tax assets is considered necessary.



                                 II -  21

<PAGE>


8.    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 six  months of  service.  Under the terms of the plan,  the
Company  guarantees  a  contribution  of $0.50 for each  $1.00  invested  by the
participant up to the participant's  investment of 6% of salary, subject to plan
and regulatory  limitations.  The Company may also make additional cash or stock
contributions  to the plan at its discretion.  The Company's  contributions  are
vested to participants  over five years. The Company made  contributions of $3.4
million,  $3.9 million,  and $4.1 million to the plan in 1996,  1995,  and 1994,
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.  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  components  of  net  periodic   pension  cost  for  the  supplemental
retirement plans for 1996, 1995, and 1994 are as follows:

<TABLE>
<CAPTION>

      DOLLARS IN THOUSANDS                    1996        1995         1994
      ------------------------------------------------------------------------
      <S>                                    <C>         <C>         <C>   
      Service cost                           $  294      $  221      $  131
      Interest cost                           1,519       1,261       1,643
      Amortization of prior service cost        378         378         397
      Amortization of initial unrecognized
        net obligation                          264         264         286
                                             ------------------------------
              Total                          $2,455      $2,124      $2,457
                                             ==============================

</TABLE>

      Assumptions used to develop the net periodic pension cost for supplemental
retirement plans were:

<TABLE>
<CAPTION>
                                              1996          1995         1994
      ---------------------------------------------------------------------------
      <S>                                  <C>           <C>          <C>  
      Discount rate                        7.00-8.00%    7.25%-8.25%  7.25%-8.25%
      Rate of increase in salary levels       5.50%         5.25%        5.50%

</TABLE>


                                 II -  22

<PAGE>



      The funded status of the  supplemental  retirement  plans at September 30,
1996 and 1995 is as follows:

<TABLE>
<CAPTION>
      DOLLARS IN THOUSANDS                                               1996         1995
      -------------------------------------------------------------------------------------
      <S>                                                              <C>         <C>    
      Actuarial present value of benefit obligations:
        Vested benefits                                                 $15,572     $14,346
        Nonvested benefits                                                    -           7
        Accumulated benefit obligation                                   15,572      14,353
        Effect of assumed increase in future compensation levels          3,998       3,555
      Projected benefit obligation                                       19,570      17,908
      Assets of plans at fair value                                      (2,898)     (2,898)
      Excess of projected benefit obligation over assets                 16,672      15,010
      Unrecognized prior service cost                                    (2,510)     (2,888)
      Unrecognized net loss                                              (5,166)     (4,386)
      Unrecognized net obligation remaining from date of adoption        (3,578)     (3,842)
                                                                        ------------------- 
      Pension liability recognized in the consolidated balance sheets   $ 5,418     $ 3,894
                                                                        ===================

</TABLE>


      At September  30, 1996,  the Company owns life  insurance in the aggregate
amount  of $45  million  covering  substantially  all  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.  Amounts  charged to
pension expense and contributed to these plans were $0.4 million,  $0.4 million,
and $0.3 million in 1996, 1995, and 1994, respectively.


9.    CONTINGENCIES

      The Company  received  proceeds of $7.7 million and $13.8  million in 1996
and 1995,  respectively,  from  receivables sold with recourse by the Company to
financial  institutions and is contingently liable as guarantor of $15.9 million
and  $23.0  million  at  September  30,  1996 and  1995,  respectively,  of such
receivables.

      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  for the time period  October 15, 1989 to the  present.
Plaintiffs  seek  injunctive  relief  and  treble  damages  in an  amount  to be
determined at trial.



                                 II -  23

<PAGE>


      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 the
various state courts.  In April 1996, the Company's  Motion for Summary Judgment
was granted and the Company was dismissed from the Federal class action.

      The Company  believes that the allegations of liability set forth in these
lawsuits  are  without  merit  as to the  wholesaler  defendants  and  that  any
attendant liability of the Company, although unlikely, would not have a material
effect on the Company's financial condition.

      The  Company  is  involved  in  various  additional  items of  litigation.
Although the amount of  liability  at  September  30, 1996 with respect to these
items of litigation  cannot be  ascertained,  in the opinion of management,  any
resulting  future  liability  will not have a  material  adverse  effect  on its
financial position or results of operations.


10.   OTHER UNUSUAL ITEMS

      During  fiscal  1994,  the  Company  recognized  a gain  from  the sale of
investment securities of $5.1 million before income taxes of $2.2 million.

      During the second quarter of fiscal 1994,  the Company  recorded a pre-tax
charge of $1.4 million ($0.8 million after tax) for the uninsured  portion of an
earthquake  loss  sustained  by  the  Company's  Valencia,  California  regional
distribution center on January 17, 1994.




                                 II -  24

<PAGE>





11.   DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

      The recorded amounts of the Company's cash and cash equivalents,  accounts
and notes  receivable,  other  investments,  non-current  receivables,  accounts
payable and the revolving  bank loan payable,  the 6 7/8%  Debentures and the 7%
Debentures at September 30, 1996  approximate fair value. The fair values of the
Company's 7 3/8% Notes and 7 1/4% Notes are  estimated as follows,  based on the
market prices of these instruments as of September 30, 1996:


<TABLE>
<CAPTION>
                                               RECORDED
            DOLLARS IN THOUSANDS                AMOUNT    FAIR VALUE
            ------------------------------------------------------------------
            <S>                               <C>         <C>     
            7 3/8% Senior Notes               $149,300    $154,194
            7 1/4% Senior Notes                 99,696     101,519
</TABLE>


12.   MERGER AGREEMENT WITH IVAX CORPORATION

      On November 11,  1996,  the Company  announced  that it had entered into a
definitive merger agreement with IVAX Corporation ("IVAX").  IVAX, headquartered
in Miami,  Florida,  is a  holding  company  with  subsidiaries  engaged  in the
research,  development,  manufacture  and  distribution of health care products,
including generic and branded pharmaceuticals, intravenous solutions and related
products,  and IN VITRO diagnostics.  The agreement,  which has been unanimously
approved  by the Board of  Directors  of the  Company  and  IVAX,  calls for the
formation of a new combined  company to be known as BBI  Healthcare  Corporation
("BBI"), which will be headquartered in Miami, Florida. Under the agreement, BBI
will  acquire  both the  Company and IVAX  through an exchange of common  stock,
whereby  IVAX  shareowners  will  receive 0.42 shares of common stock of BBI for
each share of IVAX common stock and the Company's  shareowners will receive 1.00
share of BBI common stock for each share of Class A Common Stock of the Company.
After the  merger,  BBI is  expected  to have  approximately  91 million  shares
outstanding of which the Company and IVAX  shareowners  will hold  approximately
44% and 56%, respectively.

      The merger is expected to be accounted for as a pooling of interests,  and
is  expected  to be  tax-free  to  shareowners.  The merger is expected to close
during the first calendar quarter of 1997, subject to regulatory approvals,  the
approval of the Company and IVAX shareowners, and certain other conditions.






                                 II -  25

<PAGE>




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, 1996 and 1995 and the
related statements of consolidated earnings and retained earnings and cash flows
for each of the three  years in the  period  ended  September  30,  1996.  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,  the consolidated  financial  statements referred to above
present  fairly,  in all material  respects,  the  financial  position of Bergen
Brunswig  Corporation  and  subsidiaries at September 30, 1996 and 1995, and the
results of their  operations and their cash flows for each of the three years in
the period ended  September  30, 1996,  in conformity  with  generally  accepted
accounting principles.




/S/ DELOITTE & TOUCHE LLP
-------------------------
Costa Mesa, California
October 30, 1996












                                 II -  26

<PAGE>





ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
            FINANCIAL DISCLOSURE


            None.










































                                 II -  27

<PAGE>


                                    PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

            IDENTIFICATION OF DIRECTORS.

            The Company's  Restated  Certificate of Incorporation  provides that
the Board of Directors shall consist of not more than 15 directors nor less than
9  directors,  the exact  number  within such limits to be fixed by the Board as
provided in the By-Laws, which currently provide for 12 directors. The directors
are  divided  into  three  approximately  equivalent-sized  classes,  each class
serving for a period of three years on a staggered term basis.

            The following  sets forth  information  concerning  the  individuals
currently serving as directors of the Company:


DIRECTORS WHOSE TERM EXPIRES JANUARY 1997
(CLASS III DIRECTORS)


RODNEY H. BRADY                  Director since 1973.                    Age 63.

            President   and  Chief   Executive   Officer,   Deseret   Management
Corporation  since April 1996.  Former  President and Chief  Executive  Officer,
Bonneville International Corporation (broadcast communications) (1985-1996). Mr.
Brady is a director  of Deseret  Mutual  Insurance  Company  and First  Security
Corporation.  Mr. Brady is a member of the  Company's  Executive,  Financing and
Nominating Committees.


CHARLES C. EDWARDS, M.D.         Director since 1985.                    Age 73.

            Former President (1993 to 1994) of California  Healthcare  Institute
(nonprofit   association).   Former  President  and  Chief  Executive   Officer,
ScrippsHealth  and Scripps  Institutions  of Medicine and Science  (health care)
(1991 to 1993).  Dr.  Edwards  is a  director  of  Molecular  Biosystems,  Inc.,
Northern Trust Bank and IDEC Pharmaceutical  Company. Dr. Edwards is Chairman of
the Company's  Audit  Committee and a member of the  Investment/Retirement  Plan
Committee.


JAMES R. MELLOR                  Director since 1979.                    Age 66.

            Chairman  of the Board and Chief  Executive  Officer  (since  1993),
former  President and Chief Operating  Officer (1991 to 1993),  General Dynamics
Corporation  (diversified  defense and  aerospace).  Mr. Mellor is a director of
Kerr Group, Inc., General Dynamics Corporation, Aeromovel USA, Inc. and Computer
Sciences   Corporation.   Mr.   Mellor  is  Vice   Chairman  of  the   Company's
Compensation/Stock  Option  Committee and a member of the  Investment/Retirement
Plan Committee.

                                 III -  1

<PAGE>



FRANCIS G. RODGERS               Director since 1982.                    Age 70.

            Author  and  Lecturer.   Former  Vice  President,   Marketing,   IBM
(information processing systems), retired. Mr. Rodgers is a director of Dialogic
Corporation,  Mercantile Stores,  Inc. and Milliken and Company.  Mr. Rodgers is
Chairman of the Company's  Compensation/Stock  Option  Committee and a member of
the Audit Committee.


DIRECTORS WHOSE TERM EXPIRES JANUARY 1998
(CLASS I DIRECTORS)


ROBERT E. MARTINI                Director since 1962.                    Age 64.

            Chairman  of the Board  (since  1992) and  Chief  Executive  Officer
(since 1990 and until  January  1997) of the Company and formerly  served as its
President (1981 to 1992). Mr. Martini is a director of Mossimo, Inc. Mr. Martini
is Chairman of the Company's Executive, Financing and Nominating Committees.


JOHN CALASIBETTA                 Director since 1962.                    Age 91.

            Senior Vice President of the Company.


NEIL F. DIMICK                   Director since 1995.                    Age 47.

            Executive  Vice President and Chief  Financial  Officer (since 1992)
and formerly  served as Vice  President,  Finance (1991 to 1992) of the Company.
President, Alternate Site Distributors, Inc., a subsidiary of the Company, since
September  1996.  Mr.  Dimick  is  a  member  of  the  Company's  Financing  and
Investment/Retirement Plan Committees.


DONALD R. RODEN                  Director since 1995.                    Age 50.

            President  and  Chief  Operating  Officer  (since  1995),  and Chief
Executive  Officer-Elect  (commencing  January  1997) of the  Company.  Prior to
joining the Company in 1995,  Mr.  Roden was a  healthcare  industry  consultant
(1993  to  1995)  and  Chief  Executive,  North  America  (1989 to 1993) of Reed
Elsevier Medical (publishing). Mr. Roden is a member of the Company's Executive,
Financing and Nominating Committees.




                                 III -  2

<PAGE>



DIRECTORS WHOSE TERM EXPIRES JANUARY 1999
(CLASS II DIRECTORS)


JOSE E. BLANCO, SR.              Director since 1992.                    Age 70.

            Chairman of the Board (since 1987) of J.M. Blanco,  Inc.  (wholesale
pharmaceutical distribution). Mr. Blanco is Vice Chairman of the Company's Audit
and   Investment/Retirement    Plan   Committees,    and   a   member   of   the
Compensation/Stock Option Committee.


CHARLES J. LEE                   Director since 1972.                    Age 71.

            Former Managing  Director,  Smith Barney Inc.  (investment  banking)
(1989 to 1996).  Mr. Lee is a member of the Company's  Executive,  Financing and
Nominating Committees.


GEORGE R. LIDDLE                 Director since 1969.                    Age 69.

            Investment Adviser.  Former Vice President,  Kidder,  Peabody & Co.,
Inc.   (stockbrokers),   retired.  Mr.  Liddle  is  Chairman  of  the  Company's
Investment/Retirement Plan Committee.


GEORGE E. REINHARDT, JR.         Director since 1985.                    Age 67.

            Formerly served as consultant (1992 to 1995),  Senior Vice President
(1991), Chief Financial Officer (1976 to 1991) and Vice President, Finance (1981
to 1991) of the Company.  Mr. Reinhardt is a member of the Company's  Executive,
Financing and Nominating Committees.



            IDENTIFICATION OF EXECUTIVE OFFICERS.

            Information  required by this item is contained in Item 4A captioned
"Executive  Officers of the Registrant" and is included in Part I of this Annual
Report.





                                 III -  3

<PAGE>



ITEM 11.    EXECUTIVE COMPENSATION

            DIRECTOR COMPENSATION.

            Employee  directors  of the Company are not paid any fees,  as such,
for service on the Board or on any Board Committee.  Each non-employee  director
received  for  fiscal  1996 an annual fee of $30,000  for Board  service  and an
attendance  fee of $2,000 for each Board meeting  attended in person or $600 for
each  such  meeting  participated  in  by  telephone.  For  Committee  meetings,
non-employee  directors  received $1,000 for each Committee  meeting attended in
person or $600 for each such meeting participated in by telephone.  The Chairman
of each  Committee who is a non-employee  director  received a fee of $1,500 for
each Committee  meeting attended in person or $900 for each telephone meeting of
the  Committee  in  which  he  participated.  Non-employee  directors  are  also
reimbursed for all expenses  incident to their Board service.  Each non-employee
director  who serves less than six months in a fiscal year  receives  50% of the
annual fee, and if he serves six months or more in a fiscal year,  receives 100%
of the prevailing annual fee. Under the Company's Deferred  Compensation Plan, a
non-employee director of the Company may elect to defer up to 100% of these fees
or any fixed amount not less than $2,500 of such fees.

            The Company has a  nonqualified  Capital  Accumulation  Plan for its
non-employee  directors.  The maximum  benefit  available to these  directors is
$150,000, payable upon retirement in 120 equal consecutive monthly installments.
If the  non-employee  director  has served for less than ten years,  his benefit
upon  retirement  will be based upon 10% of the maximum benefit for each year of
Board service with a minimum of three years of service required for inclusion in
the plan.  If a director  dies  before the normal  retirement  age of 70 and his
termination from Board service,  his beneficiary will receive an amount equal to
100% of the  amount  the  Company  would  have  paid  the  director  had  normal
retirement age been attained.

            Each  non-employee  director is automatically  entitled to an option
grant of 3,000 shares of Common Stock under the  Company's  Amended and Restated
1989 Stock Incentive Plan upon his initial election or appointment to the Board,
and is thereafter  entitled to an annual grant of 2,000 shares ("Annual  Grant")
only if the Company  attains a ten percent or greater return on common equity in
the  preceding  fiscal year.  During  fiscal 1996,  each  non-employee  director
received an Annual Grant of 2,000 shares.


            COMPENSATION OF EXECUTIVE OFFICERS.

            The  following  table sets forth  information  for the fiscal  years
ended September 30, 1996, 1995, and 1994, respectively,  with respect to certain
compensation  awarded or paid to the Company's Chief  Executive  Officer and its
other four most highly compensated executive officers (collectively,  the "Named
Executive Officers"):




                                 III -  4

<PAGE>


<TABLE>

                           SUMMARY COMPENSATION TABLE
<CAPTION>

                                                                     Long-Term
                                     ANNUAL COMPENSATION             Compensation
                                     -------------------               Awards
                                                           Other     Securities
                                                           Annual    Underlying   All Other
                                                           Compen-    Options/    Compen-
Name and                              Salary    Bonus      sation       SARs      sation(1)
Principal Position           Year       ($)      ($)         ($)         (#)         ($)
------------------           ----       ---      ---         ---         ---         ---
<S>                          <C>      <C>       <C>       <C>          <C>         <C>      
Robert E. Martini            1996     560,000   502,600   108,561(2)   25,000      33,005(3)
Chairman and Chief           1995     553,269   428,000   168,229(2)   15,750      36,774(3)
Executive Officer            1994     534,808   350,000   117,356(2)   10,000      34,278(3)

Donald R. Roden              1996     400,000   359,000    63,601(5)   95,000       ---
President and Chief          1995(4)    ---       ---       ---         ---         ---
Operating Officer            1994(4)   ---        ---       ---         ---         ---

Neil F. Dimick               1996     275,000   269,300   132,631(6)   40,000       4,571
Executive Vice President,    1995     256,731   200,000    35,049(6)    5,250       4,500
Chief Financial Officer      1994     233,654   175,000    30,604(6)   20,000       2,520

Milan A. Sawdei              1996     210,000   141,400    48,087(7)   30,000       4,571
Executive Vice President,    1995     180,000   105,000    33,457(7)    5,250       4,500
Chief Legal Officer and      1994     165,478   100,000    34,855(7)   15,000       2,520
Secretary

Denny W. Steele (8)          1996     200,000   134,700    34,824(9)   15,000       4,598
Executive Vice President     1995     184,809   120,000    29,464(9)   10,250       5,000
                             1994     165,354   100,000    29,323(9)   15,750       2,520

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

<FN>
(1)  Reflects  Company  contributions  under the  Company's  Pre-Tax  Investment
Retirement Account Plus Plan, unless otherwise indicated in the following notes.

(2) Includes $68,250, $92,120 and $80,780 of imputed compensation reflecting the
difference  between the  average  market  interest  rate for the Company and the
interest  free loan to Mr.  Martini  during  fiscal  years 1994,  1995 and 1996,
respectively, described under Item 13.

(3)  Includes  $31,198,  $31,774 and $28,418 of allocated  premiums  paid by the
Company to a split dollar life insurance plan on Mr. Martini during fiscal years
1994, 1995 and 1996, respectively.

(4) Mr. Roden's  employment with the Company  commenced during fiscal year 1996,
and accordingly, no amounts are reportable for fiscal years 1994 and 1995.

(5) Includes $16,362 of imputed  compensation  reflecting the difference between
the average  market  interest rate for the Company and the interest free loan to
Mr. Roden for fiscal year 1996, described under Item 13.

(6) Includes $12,174, $18,506 and $16,288 of imputed compensation reflecting the
difference  between the  average  market  interest  rate for the Company and the
interest  free  loan to Mr.  Dimick  for  fiscal  years  1994,  1995  and  1996,
respectively, described under Item 13.

(7) Includes $9,100, $13,160 and $11,540 of imputed compensation  reflecting the
difference  between the  average  market  interest  rate for the Company and the
interest  free  loan to Mr.  Sawdei  for  fiscal  years  1994,  1995  and  1996,
respectively, described under Item 13.

(8)  Mr. Steele tendered his  resignation as an executive  officer of the Company
in September 1996.

(9) Includes $9,100, $13,160 and $11,540 of imputed compensation  reflecting the
difference  between the  average  market  interest  rate for the Company and the
interest  free  loan to Mr.  Steele  for  fiscal  years  1994,  1995  and  1996,
respectively, described under Item 13.

</FN>
</TABLE>


                                 III -  5

<PAGE>

            EMPLOYMENT AND SEVERANCE AGREEMENTS.

            In May 1994, the Board  authorized the Company to enter into written
employment  agreements (the "Employment  Agreements")  and severance  agreements
(the "Severance  Agreements")  with Mr. Martini (as Chairman and Chief Executive
Officer), Mr. Dimick (as Executive Vice President, Chief Financial Officer), Mr.
Sawdei (as Executive Vice President,  Chief Legal Officer and Secretary) and Mr.
Steele (as Executive Vice President, Chief Information Officer); and, in October
1995, with Mr. Roden (as President and Chief Operating  Officer).  As previously
indicated,  Mr. Steele is no longer an executive officer of the Company, and his
status under the Employment Agreement is currently under review.

            Each of the Employment  Agreements is for a term of three years. The
Employment  Agreements  automatically  extend  on a  monthly  basis  so that the
outstanding term is always three years, subject to the option of either party to
terminate  the  automatic  extension  provision  at any time.  Pursuant  to each
Employment  Agreement,  each Named  Executive  Officer  is to  receive  his then
effective annual base compensation,  a bonus that shall be equal to that paid to
other executive officers at the same level, but,  regardless of what may be paid
to other  executives,  in any event no less than fifty percent of the average of
the Named Executive Officer's previous three annual bonuses,  and other benefits
and  allowances.  In the  event of death or  disability,  each  Named  Executive
Officer or their beneficiary,  as the case may be, will receive the compensation
provided  for  under his  Employment  Agreement  for the term of the  Agreement,
calculated as if notice to terminate had been given 30 days prior to such event.

            Pursuant to the  Employment  Agreements,  the Company will indemnify
each Named Executive Officer with respect to any actions,  claims or settlements
arising  out of the  performance  of his  duties,  including  the payment of all
reasonable  attorneys' fees and necessary costs and expenses.  In addition,  the
Company will pay as incurred all reasonable  attorneys' fees and necessary costs
and disbursements incurred by the Named Executive Officer in connection with any
dispute  under the  Employment  Agreement,  whether  or not the Named  Executive
Officer prevails.

            Pursuant to the Employment  Agreements,  a Named Executive Officer's
employment  may be terminated  without a claim for damages  arising  against the
Company (1) upon notice by the Named Executive Officer, except for "good reason"
discussed below; (2) by mutual agreement between the Named Executive Officer and
the Company;  or (3) by the Company for cause.  If the  Employment  Agreement is
terminated  by the  Company  for any other  reason,  or if the  Named  Executive
Officer terminates the Employment Agreement for good reason (including,  but not
limited to, an adverse  change in such  officer's  position from his position at
the time he entered  into the  Employment  Agreement),  he will be  entitled  to
damages equal to the present value  equivalent of the compensation he would have
been paid under the  Employment  Agreement  for the next three  years,  less his
earned income from other employment, if any.

            The Severance  Agreements,  which provide for benefits additional to
the Employment Agreements,  with the Named Executive Officers require payment of
cash and other benefits in the event of a voluntary or  involuntary  termination



                                 III -  6

<PAGE>


of employment  within three years  following a Change in Control (as hereinafter
defined) of the Company. Payment under the Severance Agreements would consist of
2.99 times the average annual W-2 compensation  paid by the Company for the most
recent five taxable years of the Named Executive  Officer ending before the date
of the Change in Control if, following a Change in Control, such Named Executive
Officer is terminated without cause, such Named Executive Officer terminates for
any reason within 180 days after a Change in Control, or if such Named Executive
Officer  terminates for good reason  (including,  but not limited to, an adverse
change in such officer's position from his position at the time of the Change in
Control).  The Severance Agreement continues until three years and one day after
a Change in Control or until the Named Executive  Officer receives the severance
payment under the Agreement.

            Under the Severance  Agreement,  a Change in Control with respect to
the  Company  is deemed  to occur 90 days  prior to (i) the  acquisition  by any
person,  entity or group,  within the meaning of Section  13(d) and 14(d) of the
Exchange Act (excluding for this purpose,  (A) the Company,  or (B) any employee
benefit  plan of the  Company  which  acquires  beneficial  ownership  of voting
securities of the Company) of 50% or more of beneficial  ownership  (within Rule
13(d)-3  promulgated under the Exchange Act) of the combined voting power of the
Company's  then  outstanding   securities;   (ii)  any  rolling  period  of  two
consecutive  years in which  individuals  who at the  beginning  of such  period
constitute  the Board of Directors  of the Company  (and any new director  whose
election or  nomination  for  election was approved by a vote of at least 2/3 of
the directors then still in office who either were directors at the beginning of
the period or whose  election or  nomination  for  election  was  previously  so
approved)  cease  for any  reason  to  constitute  a  majority  of the  Board of
Directors;  provided,  however,  no director shall be considered to have been so
approved  if such  director  initially  assumed  office as a result of either an
actual or threatened "election contest" (as described in Rule 14(a)-11 under the
Exchange Act) or other actual or threatened  solicitation  of proxies or consent
by or on behalf of any person other than the Board of Directors,  including as a
result of any agreement intended to avoid or settle any such election contest or
proxy contest;  (iii) the approval by the Company's shareowners of a dissolution
or  liquidation  of the  Company;  (iv)  the sale (or  similar  transaction)  of
substantially  all  of the  Company's  operating  assets;  or  (v) a  merger  or
consolidation,  or a transaction having a similar effect,  where (A) the Company
is not the  survivor,  (B) the majority of the Common Stock of the Company is no
longer held by the holders of Common Stock of the Company  immediately  prior to
the  transaction,  or (C) the  Company's  Common Stock is  converted  into cash,
securities or other property.

            If any payment or  acceleration  of any benefits  extended  from the
Company to any Named Executive Officer upon a Change in Control would be subject
to the excise tax imposed by Section 4999 of the Internal  Revenue Code of 1986,
as amended  ("Code"),  then the Named  Executive  Officer  shall be  entitled to
receive an  additional  "gross up bonus" in an amount  necessary  to provide the
Named Executive  Officer with sufficient after income tax funds to fully pay all
such excise taxes on both the payment and the gross up bonus.

            Pursuant  to  the  Severance  Agreement,  the  Company  will  pay as
incurred all reasonable  attorneys' fees and necessary  costs and  disbursements
incurred by the Named Executive Officer in connection with any dispute under the
Severance Agreement, whether or not the Named Executive Officer prevails.



                                 III -  7

<PAGE>


            In addition to the above arrangements,  the Company has an unfunded,
non-qualified  Retired  Officers  Medical Plan  available  to certain  executive
officers of the Company and their  spouses,  including  executive  officers  now
retired  from  the  Company.  The  plan  provides  for  payment  of the  covered
individual's  medical,  dental,  vision  and  prescription  expenses  at a level
commensurate  with the Company's  medical  benefit plans that are in effect upon
the  executive  officer's  retirement  (as defined in the plan  documents),  but
limited to the difference  between  benefits  received or potentially  available
from other insurance sources (including  governmental programs), if any, and the
total expense actually incurred. The duration of the benefit is for the lifetime
of the executive  officer and the executive  officer's spouse if such officer is
married.  Upon a change of control  (as  defined in the plan  documents),  it is
contemplated  that the Company would pre-fund the plan in an amount necessary to
provide future benefits to the covered individuals  eligible to receive benefits
under the plan. Based upon the various eligibility  criteria under the plan, two
of the Named Executive  Officers (Messrs.  Martini and Sawdei) would be eligible
to receive benefits upon their retirement from the Company.


            STOCK OPTION GRANTS AND EXERCISES.

            The  following  tables  provide  information  with  respect to stock
options granted to and held by the Named Executive Officers:

<TABLE>
                        OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>

                              Individual Grants
                                 % of Total
                   Securities   Options/SARs
                   Underlying    Granted to
                  Options/SARs  Employees in   Exercise                Grant Date
                     Granted     Fiscal Year    Price      Expiration    Present
NAME                 (#)(1)         1996       ($/SHARE)      DATE      VALUE($)
----                 ------         ----       ---------      ----      --------
<S>                 <C>         <C>            <C>         <C>        <C>        

Robert E. Martini   25,000           3.3       $24.44      11/08/05   $219,000(6)

Donald R. Roden     50,000(2)       12.6        21.56      10/15/04    401,500(7)
                    20,000                      24.44      11/08/05    175,200(6)
                    25,000(3)                   28.75      09/04/06    260,750(8)

Neil F. Dimick      15,000           5.3        24.44      11/08/05    131,400(6)
                    25,000(4)                   28.75      09/04/06    260,750(8)

Milan A. Sawdei     15,000           4.0        24.44      11/08/05    131,400(6)
                    15,000(5)                   28.75      09/04/06    156,450(8)

Denny W. Steele     15,000           2.0        24.44      11/08/05    131,400(6)

-----------------------------------------------------
<FN>

(1) All shares  granted as  nonstatutory  stock  options at 100% of fair  market
value on the date of grant,  unless otherwise noted, and vest 25% one year after
the date of grant and then 25% per year thereafter.

(2) Granted as incentive stock options.

(3) Of this amount, 3,478 shares granted as incentive stock options.



                                 III -  8

<PAGE>


(4) Of this amount, 11,733 shares granted as incentive stock options.

(5) Of this amount, 9,396 shares granted as incentive stock options.

(6) The grant date present value is based on a Black-Scholes model and assumes a
risk-free rate of return of 6.25%, an option term of ten years, a dividend yield
of 2.58% and a stock volatility of .322.

(7) The grant date present value is based on a Black-Scholes model and assumes a
risk-free rate of return of 6.25%, an option term of ten years, a dividend yield
of 2.11% and a stock volatility of .301.

(8) The grant date present value is based on a Black-Scholes model and assumes a
risk-free rate of return of 6.72%, an option term of ten years, a dividend yield
of 2.40% and a stock volatility of .296.
</FN>
</TABLE>

<TABLE>

               AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                      AND FISCAL YEAR-END OPTION/SAR VALUES

<CAPTION>
                                            Number of Securities
                                           Underlying Unexercised        Value of Unexercised
                    Shares                    Options/SARs at           In-the-Money Options/
                  Acquired on    Value           FY END (#)              SARS AT FY END($) (1)
                   Exercise    Realized          ----------              ---------------------
Name                 (#)          ($)    EXERCISABLE  UNEXERCISABLE   EXERCISABLE  UNEXERCISABLE
----                 ---          ---    -----------  -------------   -----------  -------------
<S>                   <C>          <C>     <C>            <C>       <C>         <C>     
Robert E. Martini     0            0       115,308        29,775    $1,396,520  $269,156
Donald R. Roden       0            0        17,500        74,022       163,975   566,925
Neil F. Dimick        0            0        26,325        45,175       367,426   294,874
Milan A. Sawdei       0            0        34,234        36,750       530,519   264,874
Denny W. Steele       0            0        26,657        25,500       345,074   257,862

----------------------------------
<FN>
(1) Pursuant to the rules promulgated by the Securities and Exchange Commission,
these values were calculated by determining the difference  between the value of
the  Company's  stock at fiscal year end ($31.75 on September  30, 1996) and the
exercise price of the options.
</FN>
</TABLE>




            PENSION TABLE.

            The following  table shows the  estimated  annual  benefits  payable
under  the  Company's  non-qualified   Supplemental  Executive  Retirement  Plan
("SERP")  at age 62 to persons in  specified  compensation  and years of service
classifications,  based  on a joint  and 75  percent  survivor  annuity  form of
retirement  income. The table also includes benefits payable under the Company's
Capital  Accumulation  Plan ("CAP") for executives  who  participate in the CAP,
which was the  SERP's  predecessor  plan and which  was  frozen to all  employee
participants on October 7, 1987.



                                 III -  9

<PAGE>


<TABLE>
<CAPTION>

Average Annual
Compensation                       Estimated Annual Retirement Benefits For
During Highest Three Of Final        Years Of Credited Service Shown Below
Five Years Before Retirement         10         20           30        40
----------------------------         --         --           --        --
<C>                               <C>       <C>          <C>       <C>     
$       200,000                   $73,500   $126,800     $126,800  $126,800
       400,000                    176,100    282,700      282,700   282,700
       600,000                    278,700    438,700      438,700   438,700
       800,000                    381,500    594,800      594,800   594,800
     1,000,000                    488,000    754,700      754,700   754,700

</TABLE>


            As of September 30, 1996, full years of actual  credited  service in
these plans are: Mr.  Martini--40 years; Mr. Roden--1 year; Mr. Dimick--5 years;
Mr. Sawdei--13 years; and, Mr. Steele--6 years.

            Compensation  for a particular  year as used for the  calculation of
retirement  benefits  under SERP includes base salary  received  during the year
(including  salary deferred under a salary deferral plan) and excludes all other
compensation.   Benefits  are  reduced  by  the  following   amounts:   (1)  the
participant's  primary insurance amount payable under the Social Security Act at
retirement age; (2) the  participant's  benefit under the CAP; (3) an annuitized
amount based upon an assumed level of  participation  in the  Company's  Pre-Tax
Investment  Retirement  Account  Plus  Plan;  and  (4)  any  amounts  owed  by a
participant to the Company  (except to the extent that such amount owed is under
a program that  expressly  provides that there will not be an offset).  Benefits
are  payable  under  the  SERP  in the  form of a joint  and  survivor  annuity,
consisting of periodic  payments to each  participant or a lump sum distribution
to a participant's  beneficiary should a participant die before attaining normal
retirement  age. In the  alternative,  a participant may elect to receive his or
her  benefit  in a  lump  sum.  A  $5,000  funeral  benefit  is  available  to a
participant's  estate,  offset by any funeral  benefit  paid under the CAP Plan.
Because  participants may be required to pay income and payroll taxes based upon
payments  made  by the  Company  under  SERP,  the  Company  will  pay  affected
participants  an additional  amount that the Company  estimates will be equal to
such tax liability.  Generally,  the CAP benefit is a monthly retirement benefit
paid over a specified  number of months that, at the election of a  participant,
may be paid in a lump sum.  Upon a change in control  (as defined in the CAP and
SERP),  certain senior executive officers' benefits payable under the SERP would
be accelerated such that their credited years of service in these plans would be
as if they had attained the normal  retirement age. In addition,  a master trust
for certain  executive  officer  deferral plans has been established to preserve
these and certain other executive benefits.





                                 III -  10

<PAGE>



ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT


            BENEFICIAL OWNERSHIP OF SECURITIES

            The following table lists the beneficial ownership of each person or
group who owns,  to the  Company's  knowledge,  more  than five  percent  of its
outstanding voting securities,  based on the number of shares outstanding  as of
November 30, 1996:


<TABLE>
<CAPTION>
Name and                                        Amount and
Address of                                       Nature of      Percent of
Beneficial                                      Beneficial      Outstanding
Owner                        Title Of Class      Ownership        Shares
-----                        --------------      ---------        ------
<S>                          <C>               <C>                 <C>  
FMR Corp. (1)                Common Stock     4,241,410(1)        10.58
(including subsidiaries)
82 Devonshire Street
Boston, Massachusetts 02109

Wellington Management        Common Stock     2,219,918(2)        5.54
Company, LLP
75 State Street
Boston, Massachusetts  02109

Robert E. Martini (3)        Common Stock     2,204,356(4)        5.50
4000 Metropolitan Drive
Orange, California 92868

------------------------------------
<FN>

(1) This  information  was provided by FMR Corp.  ("FMR") in its  capacities  as
serving as an investment advisor to various registered  investment companies and
other funds as well as serving as trustee or managing agent for various  private
investment accounts.  According to a Schedule 13G, dated June 10, 1996, as filed
with the  Securities  and  Exchange  Commission,  FMR had sole voting power over
598,315 shares and sole dispositive power over 4,241,410 shares.

(2) This information has been furnished to the Company by Wellington  Management
Company,  LLP  ("WMC")  as of  December  24,  1996.  WMC  advises  that it is an
investment advisor registered with the Securities and Exchange  Commission under
the Investment Advisors Act of 1940, as amended, and as of December 24, 1996, in
its  capacity  as  investment  advisor,  WMC may be  deemed  to have  beneficial
ownership  of the  number  of  shares  indicated,  that are  owned  by  numerous
investment  advisory clients,  none of which is known to have such interest with
respect to more than five percent of the class.  As of such date, WMC advises it
had shared voting power over 1,764,908 shares and shared  dispositive power over
2,219,918 shares.

(3) Information as to beneficial  ownership has been furnished to the Company by
Robert E. Martini as of September 30, 1996. Except as indicated otherwise by the
following notes, shares shown beneficially owned are those to which Mr.
Martini may have sole voting and dispositive power.

(4) Includes  115,308  shares  which,  as of October 31,  1996,  may be acquired
within sixty days  pursuant to the exercise of stock  options and 29,925  shares
beneficially  owned  by Mr.  Martini  for  which he does  not  have  voting  and
dispositive power.

</FN>
</TABLE>



                                 III -  11

<PAGE>



            The  following  table sets forth certain  information  regarding the
ownership of the  Company's  Common  Stock as of October 31, 1996,  by: (a) each
director;  (b) the chief executive officer and the four most highly  compensated
executive officers named in the Summary Compensation Table (see "Compensation of
Executive Officers") under Item 11; and (c) all directors and executive officers
as a group:

<TABLE>
<CAPTION>
                                                 Aggregate Number
                                                     of Shares             Percent
                                                   Beneficially              of
                                                    Owned(1)(2)      Outstanding Shares
                                                    -----------      ------------------
<S>                                              <C>                 <C>

Jose E. Blanco, Sr.                                    5,601                  *
Rodney H. Brady (3)                                   42,306                  *
John Calasibetta                                     185,910                  *
Neil F. Dimick                                        30,525                  *
Dr. Charles C. Edwards                                 9,929                  *
Charles J. Lee                                        13,401                  *
George R. Liddle (4)                                  30,079                  *
Robert E. Martini (5)                              2,204,356                 5.50
James R. Mellor                                       12,250                  *
George E. Reinhardt, Jr.                              84,787                  *
Donald R. Roden                                       27,500                  *
Francis G. Rodgers                                    12,122                  *
Milan A. Sawdei (6)                                   34,864                  *
Denny W. Steele                                       26,657                  *
        

All directors and executive officers as a group
   including those above (20 persons)              2,843,476                 7.10

--------------------------------------------
<FN>

* Denotes ownership of less than 1% of the outstanding shares of Common Stock.

(1)  Information  as to  beneficial  ownership by the  directors  and  executive
officers  named above has been  furnished  to the  Company by such  individuals.
Except as indicated  otherwise in the  footnotes,  shares shown as  beneficially
owned are those to which the individual has sole voting and  dispositive  power.
Such shares,  where  applicable,  may be subject to community  property laws and
related statutes under which a spouse may be entitled to share in the management
of the community property, which may include the right to vote or dispose of the
shares.

(2) Reflects the number of shares that could be purchased by exercise of options
exercisable  as of  October  31,  1996 or  within 60 days  thereafter  under the
Company's stock option or stock incentive plans, as follows: Jose E. Blanco, Sr.
5,601 shares;  Rodney H. Brady 8,752 shares;  Neil F. Dimick 26,325 shares;  Dr.
Charles C. Edwards 7,439 shares;  Charles J. Lee 8,752 shares;  George R. Liddle
5,602 shares;  Robert E. Martini 115,308  shares;  James R. Mellor 8,752 shares;
George E. Reinhardt, Jr. 5,601 shares; Donald R. Roden 17,500 shares; Francis G.
Rodgers 8,752  shares;  Milan A. Sawdei  34,234  shares;  Denny W. Steele 26,657
shares;  and all directors and executive  officers as a group,  including  those
above (20 persons) 369,250 shares.

(3) Includes 1,850 shares held by two sons living at home and 31,704 shares held
in trust by Mr. Brady as trustee for his own benefit.

(4) Includes  23,735 shares held by Mr.  Liddle as co-trustee  for the benefit of
him and his wife.

(5) Includes 29,925 shares  beneficially  owned by Mr. Martini for which he does
not have voting and dispositive power.

(6) Includes 630 shares held by Mr. Sawdei as trustee for his son.
</FN>
</TABLE>



                                 III -  12

<PAGE>


ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


            CERTAIN TRANSACTIONS.

            In April 1990, the Board approved an unfunded deferred  compensation
loan program available to the executive  officers of the Company (the "Executive
Loan  Program")  for the purpose of  providing  them with an incentive to remain
with the Company.  Under this  program,  loans are  available  to all  executive
officers of the Company,  except  those who are also members of the Board.  Each
outstanding  loan matures upon the officer's  termination  of employment  unless
extended  by the Board and is  evidenced  by a  secured  promissory  note in the
principal amount of the loan which bears no interest.  An executive  officer may
borrow up to 125% of his or her annual  salary  then in effect  upon the date of
request.  The value of collateral  securing the loan must equal at least 125% of
the principal loan amount. Although no interest is charged by the Company to the
employee,  the  employee  is  deemed by the  Internal  Revenue  Service  to have
compensation  in the  amount  of  interest  calculated  according  to a  formula
prescribed by the Internal Revenue Service.  The employee is also deemed to have
paid interest in a like amount to the Company.  The Company has the right at any
time to amend, modify or terminate this program but is limited in terminating or
modifying outstanding loans.

            In addition to the above loans,  the Board has approved making loans
to other key employees under terms similar to the Executive Loan Program and the
principal amount of these loans  outstanding as of November 30, 1996, to Messrs.
Martini,   Roden  and  Steffensen  were   $1,400,000,   $500,000  and  $481,250,
respectively.  The loans to Messrs. Dimick (at the time made), Sawdei and Steele
were made  pursuant  to the  Executive  Loan  Program  and are in the amounts of
$281,250, $200,000 and $200,000,  respectively. In addition, William J. Elliott,
Executive Vice President of the Company and President of Bergen Brunswig Medical
Corporation,  a Company  subsidiary,  received a loan in the amount of  $331,250
under  the  Executive  Loan  Program,  and a  relocation  loan in the  amount of
$100,000.  Such amounts represent the largest aggregate amount of each executive
officer's  indebtedness during the Company's last fiscal year. In the event of a
change in control (as defined in the promissory notes for the applicable loans),
the  indebtedness to the Company of Messrs.  Martini,  Dimick,  Elliott (for the
Executive Loan Program loan, only), Roden and Sawdei would be deemed forgiven.

            The Company  entered into a life  insurance  plan for Mr. Martini in
1985.  Under this insurance  plan, the Company pays the premiums on certain life
insurance  policies which provide him (or his assignees) with a death benefit of
$1,400,000 and which may provide certain alternative  benefits in the event of a
lifetime surrender of the policy. The Company expects to maintain this policy in
force  until his 75th  birthday,  whether he is  employed  by the Company or has
retired.

            Dwight A. Steffensen,  formerly a director (1985 to 1996), President
(1992 to  1995),  Chief  Operating  Officer  (1990 to 1995) and  Executive  Vice
President (1985 to 1992) of the Company, currently serves as a consultant to the
Company under a consulting  agreement  entered into as of February 1, 1996,  and
which expires  October 15, 1998. The agreement  provides for bi-weekly  payments
averaging  approximately $19,000, lump sum payments at fiscal year-end averaging



                                 III -  13

<PAGE>


approximately  $339,000, and upon successful completion of the full term, a lump
sum  payment of  $1,500,000,  to be offset in the amount of  $481,250 to reflect
repayment by Mr. Steffensen of his Company loan. In addition, upon completion of
the  term of the  agreement,  the  Company  shall  pay Mr.  Steffensen  lump sum
payments of $1,026,013  and  $1,667,247 as benefits  accrued under the Company's
SERP and CAP Plans, respectively through October 15, 1998. However, in the event
Mr. Steffensen breaches certain terms and provisions of the agreement,  the SERP
and CAP payments, payable at October 15, 1998, will be reduced in the amounts of
$444,639 and $221,025, respectively.


            INDEMNIFICATION OF DIRECTORS AND OFFICERS.

            Under  Article  VII  of  the  Company's   Restated   Certificate  of
Incorporation ("Restated  Certificate"),  every person who is or was a director,
officer, employee or agent of the Company and the legal representative of such a
person is  entitled to receive  indemnification  from the Company to the fullest
extent  permitted by law.  Under New Jersey law,  directors  and officers may be
indemnified in certain situations, subject to the Company's having taken certain
actions and the directors and officers having met certain specified standards of
conduct. In 1986, the Company entered into individual agreements  (collectively,
the  "Indemnity   Agreement")  to  indemnify  each  of  its  directors   against
liabilities  and defense costs to the extent that such directors would have been
insured under the director and officer liability  insurance  policies which were
in effect on December 31, 1984 (the "1984  Policy").  The Company  believes that
the coverage addresses liabilities arising under ERISA, securities and antitrust
laws.  The obligation of the Company to indemnify a director under the Indemnity
Agreement  is limited to $30 million,  in the  aggregate,  the maximum  coverage
available under the 1984 Policy. However, the Indemnity Agreement does not limit
a  director's  right to recover in excess of such $30 million  maximum  from the
Company if the director is otherwise entitled to statutory indemnification.  The
Indemnity  Agreement was ratified by the shareowners at the December 1986 Annual
Meeting.



                                 III -  14

<PAGE>


                                     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   and
                        Retained  Earnings  for  the  Years  Ended
                       September 30, 1996, 1995, and 1994
                  Consolidated Balance Sheets, September 30, 1996
                        and 1995
                  Statements  of  Consolidated  Cash Flows for the
                        Years Ended September 30, 1996,  1995, and
                        1994
                  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.















                                  IV -  1

<PAGE>


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


      3.    Exhibits
            --------

              ***2      Agreement  and Plan of Merger,  dated as of November 10,
                        1996, among BBI, IVAX, the Company,  IVAX Merger Sub and
                        Bergen Merger Sub.

                3(a)    The By-Laws as amended and  restated  and dated November
                        8, 1996.

               *3(b)    The Restated  Certificate of Incorporation dated May 23,
                        1994 is set forth as Exhibit 3 to the Company's  Current
                        Report on Form 8-K dated May 23, 1995.

               *4(a)    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(b)    Rights Agreement,  dated as of February 8, 1994, between
                        Bergen  Brunswig  Corporation and Chemical Trust Company
                        of California,  as Rights Agent,  including all exhibits
                        thereto,  is incorporated herein by reference to Exhibit
                        1 to the  Company's  Registration  Statement on Form 8-A
                        dated February 14, 1994.

            ***10(a)    Stock Option  Agreement,  dated as of November 10, 1996,
                        between IVAX and the Company.

            ***10(b)    Stock  Option  Agrement,  dated as of November 10, 1996,
                        between the Company and the IVAX.

            ***10(c)    Voting Agreement, dated as of November 10, 1996, between
                        IVAX and Robert E. Martini.

            ***10(d)    Voting  Agreement,  dated as of November 10, 1996, among
                        the Company, Frost-Nevada, Limited Partnership and Dr.
                        Phillip Frost.



                                  IV -  2

<PAGE>



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


      3.    Exhibits (Continued)
            --------

            **10(e)     Bergen Brunswig Corporation Deferred Compensation Plan.

            **10(f)     Director  Indemnification   Agreement  and  Amendmentto
                        Director Indemnification Agreement.

             *10(g)      Bergen  Brunswig  Corporation  Bonus  Plan  as  adopted
                         September 1, 1977,  amended  October 19,  1990,  is set
                         forth as Exhibit 10(i) in the  Company's  Annual Report
                         on Form 10-K for the fiscal year ended August 31, 1991.

            **10(h)     Bergen  Brunswig  Corporation  Stock Option Plans, other
                       than the 1989 Stock Incentive Plan.

             *10(i)     1989 Stock Incentive Plan of Bergen Brunswig Corporation
                        is set forth as Exhibit  10(j) in the  Company's  Annual
                        Report on Form 10-K for the fiscal year ended August 31,
                        1989.

             *10(j)     Amendments  to  the  Amended  and  Restated  1989  Stock
                        Incentive  Plan of  Bergen  Brunswig  Corporation  dated
                        October 20, 1994 are set forth as Appendix A on pages 28
                        and 29 of the Company's definitive Proxy Statement dated
                        December  22,  1994  for its  January  26,  1995  Annual
                        Meeting of Shareowners.

             *10(k)     Form  of  Amended  and  Restated  Supplemental Executive
                        Retirement Plan.

             *10(l)     Form of Amended and Restated Capital Accumulation Plan.

                        Exhibits 10(k) and 10(l) above are set forth as Exhibits
                        10.1 and 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(m)     Amendment  No.1  to  the  Amended  and  Restated Capital
                        Accumulation Plan.

             *10(n)     Executive  Loan Program is set forth as Exhibit 10(k) in
                        the Company's  Annual Report on Form 10-K for the fiscal
                        year ended August 31, 1990.



                                  IV -  3

<PAGE>



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


      3.    Exhibits (Continued)
            --------


             *10(o)     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(p)     Non-Solicitation Agreement dated as of September 4, 1992
                        among W.A. Williamson,  Jr., Durr-Fillauer Medical, Inc.
                        and Bergen Brunswig  Corporation is set forth as Exhibit
                        (c)(2)  to   Amendment   No.   16  to  Bergen   Brunswig
                        Corporation's  and BBC Acquisition  Corp.'s Tender Offer
                        Statement pursuant to Section 14(d)(1) of the Securities
                        and Exchange Act of 1934.

             *10(q)     Non-Solicitation Agreement dated as of September 4, 1992
                        among Charles E. Adair,  Durr-Fillauer Medical, Inc. and
                        Bergen  Brunswig  Corporation  is set  forth as  Exhibit
                        (c)(3)  to   Amendment   No.   16  to  Bergen   Brunswig
                        Corporation's  and BBC Acquisition  Corp.'s Tender Offer
                        Statement pursuant to Section 14(d)(1) of the Securities
                        and Exchange Act of 1934.

             *10(r)     Non-Solicitation Agreement dated as of September 4, 1992
                        among Winfield Cotton,  Durr-Fillauer  Medical, Inc. and
                        Bergen  Brunswig  Corporation  is set  forth as  Exhibit
                        (c)(4)  to   Amendment   No.   16  to  Bergen   Brunswig
                        Corporation's  and BBC Acquisition  Corp.'s Tender Offer
                        Statement pursuant to Section 14(d)(1) of the Securities
                        Exchange Act of 1934.

             *10(s)     Agreement  dated as of  September  18, 1992 by and among
                        Bergen Brunswig Corporation, Durr-Fillauer Medical, Inc.
                        and the  Attorneys  General  of the  States of  Alabama,
                        Florida and  Louisiana is set forth as Exhibit  10(p) in
                        the Company's  Annual Report on Form 10-K for the fiscal
                        year ended August 31, 1992.

             *10(t)     Employment Agreement and Schedule.

             *10(u)     Severance Agreement and Schedule.

                        Exhibits 10(t) and 10(u) 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.

              11        Computation of  earnings per share  for the  three years
                        ended September 30, 1996.



                                  IV -  4

<PAGE>



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,
                        1996.

              *99(a)    Split Dollar Life  Insurance  Plan with Emil P. Martini,
                        Jr. and Robert E. Martini.

              *99(b)    Amended  and  Restated  Credit  Agreement  dated  as  of
                        September  30, 1994 among Bergen  Brunswig Drug Company,
                        Bergen Brunswig Corporation and Bank of America National
                        Trust and  Savings  Association  is set forth as Exhibit
                        99(h) in the  Company's  Annual  Report on Form 10-K for
                        the fiscal year ended September 30, 1994.

              *99(c)    First and  Second  Amendments  to Amended  and  Restated
                        Credit Agreement dated as of February 27, 1995 and March
                        16, 1996, respectively,  are set forth as Exhibits 99(a)
                        and  99(b),  respectively,  in the  Company's  Quarterly
                        Report  on Form  10-Q for the  quarter  ended  March 31,
                        1996.

              *99(d)    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, are incorporated herein by reference in Part
                        I, Item 3 of this Annual Report.

              *99(e)    The Company's  Current Report on Form 8-K dated November
                        10,  1996,  relating to the  execution  of a  definitive
                        merger agreement with IVAX Corporation,  is incorporated
                        herein by  reference  in Part I,  Item 1 of this  Annual
                        Report.

              *99(f)    The Company's Schedule 13D and Form 3 dated November 10,
                        1996 relating to the  definitive  merger  agreement with
                        IVAX Corporation.




                                  IV -  5

<PAGE>

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

      3.    Exhibits (Continued)
            --------

              *99(g)    Agreement  and Plan of Merger  dated as of  September 4,
                        1992  by and  among  Bergen  Brunswig  Corporation,  BBC
                        Acquisition Corp. and Durr-Fillauer Medical, Inc. is set
                        forth as Exhibit  (c)(1) to  Amendment  No. 16 to Bergen
                        Brunswig   Corporation's  and  BBC  Acquisition  Corp.'s
                        Tender Offer Statement  Pursuant to Section  14(d)(1) of
                        the Securities and Exchange Act of 1934.


 *    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.

***   Incorporated  herein by  reference  to the  exhibits  filed as part of the
      Company's  Current  Report  on Form 8-K  relating  to the  execution  of a
      definitive  merger  agreement  with  IVAX  Corporation,   filed  with  the
      Securities and Exchange Commission on November 12, 1996.


(b)   Reports on Form 8-K:

      On November  12, 1996, a Current  Report on Form 8-K,  dated  November 10,
      1996,  was filed  reporting  under Item 5, the  execution  of a definitive
      merger agreement with IVAX Corporation.














                                  IV -  6

<PAGE>



                                   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 27, 1996                      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,  Donald R. Roden 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.

<TABLE>
<CAPTION>

SIGNATURE                       TITLE                                 DATE
---------                       -----                                 ----

<S>                           <C>                                <C> 
/S/ ROBERT E. MARTINI           Chairman of the Board            December 27, 1996
---------------------           and Chief Executive
    Robert E. Martini           Officer and Director
                                (Principal Executive
                                Officer)

/S/ DONALD R. RODEN             President and Chief              December 27, 1996
-------------------             Operating Officer and Chief
    Donald R. Roden             Executive Officer-Elect
                                and Director

/S/ NEIL F. DIMICK              Executive Vice President,        December 27, 1996
------------------              Chief Financial Officer
    Neil F. Dimick              and Director
                                (Principal Financial
                                Officer and Principal
                                Accounting Officer)

</TABLE>



                                  IV -  7

<PAGE>


<TABLE>
<CAPTION>

SIGNATURE                           TITLE                        DATE
---------                           -----                        ----


<S>                                 <C>                          <C> 
/S/ JOHN CALASIBETTA                Senior Vice President        December 27, 1996
--------------------                and Director
    John Calasibetta                

/S/ JOSE E. BLANCO, SR.             Director                     December 27, 1996
-----------------------
    Jose E. Blanco, Sr.

/S/ RODNEY H. BRADY                 Director                     December 27, 1996
-------------------
    Rodney H. Brady

/S/ CHARLES C. EDWARDS, M.D.        Director                     December 27, 1996
----------------------------
    Charles C. Edwards, M.D.

/S/ CHARLES J. LEE                  Director                     December 27, 1996
------------------
    Charles J. Lee

/S/ GEORGE R. LIDDLE                Director                     December 27, 1996
--------------------
    George R. Liddle

/S/ JAMES R. MELLOR                 Director                     December 27, 1996
-------------------
    James R. Mellor

/S/ GEORGE E. REINHARDT, JR.        Director                     December 27, 1996
----------------------------
    George E. Reinhardt, Jr.

/S/ FRANCIS G. RODGERS              Director                     December 27, 1996
----------------------
    Francis G. Rodgers


















                                  IV -  8

<PAGE>


                                INDEX TO EXHIBITS
                                -----------------

EXHIBIT NO.                                                             PAGE NO.
-----------                                                             --------

  ***2      Agreement and Plan of Merger,  dated as of November 10,
            1996, among BBI, IVAX, the Company, IAX Merger Sub and
            Bergen Merger Sub

    3(a)    The  By-Laws as  amended and  restated  and dated                68
            November 8, 1996.

   *3(b)    The Restated  Certificate of  Incorporation  dated May 23,
            1994 is set forth as  Exhibit 3 to the  Company's  Current
            Report on Form 8-K dated May 23, 1995.

   *4(a)    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(b)    Rights  Agreement,  dated as of February 8, 1994,  between
            Bergen Brunswig  Corporation and Chemical Trust Company of
            California,   as  Rights  Agent,  including  all  exhibits
            thereto,  is incorporated herein by reference to Exhibit 1
            to the Company's  Registration Statement on Form 8-A dated
            February 14, 1994.

***10(a)    Stock  Option  Agreement,  dated as of November  10, 1996,
            between IVAX and the Company.

***10(b)    Stock  Option  Agreement,  dated as of November  10, 1996,
            between the Company and IVAX.

***10(c)    Voting Agreement,  dated as of November 10, 1996,  between
            IVAX and Robert E. Martini.

***10(d)    Voting Agreement, dated as of November 10, 1996, among the
            Company, Frost-Nevada, Limited Partnership and Dr. Phillip
            Frost.

 **10(e)     Bergen Brunswig Corporation Deferred Compensation Plan.

 **10(f)    Director   Indemnification   Agreement  and  Amendment  to
            Director Indemnification Agreement.



<PAGE>



                          INDEX TO EXHIBITS (CONTINUED)
                          -----------------------------

EXHIBIT NO.                                                             PAGE NO.
-----------                                                             --------

  *10(g)    Bergen   Brunswig   Corporation   Bonus  Plan  as  adopted
            September 1, 1977,  amended October 19, 1990, is set forth
            as Exhibit  10(i) in the  Company's  Annual Report on Form
            10-K for the fiscal year ended August 31, 1991.

 **10(h)    Bergen Brunswig Corporation Stock Option Plans, other than
            the 1989 Stock Incentive Plan.

  *10(i)    1989 Stock Incentive Plan of Bergen  Brunswig  Corporation
            is set  forth as  Exhibit  10(j) in the  Company's  Annual
            Report on Form 10-K for the fiscal  year ended  August 31,
            1989.

  *10(j)    Amendments   to  the  Amended  and  Restated   1989  Stock
            Incentive  Plan  of  Bergen  Brunswig   Corporation  dated
            October  20,  1994 are set forth as Appendix A on pages 28
            and  29 of  the  Company's   definitive  Proxy   Statement
            dated  December  22,  1994 for its January 26, 1995 Annual
            Meeting of Shareowners.

  *10(k)    Form  of  Amended  and  Restated  Supplemental   Executive
            Retirement Plan.

  *10(l)    Form of Amended and Restated Capital Accumulation Plan.

            Exhibits  10(k) and 10(l)  above are set forth as Exhibits
            10.1 and 10.2 in the Company's Registration Statement 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(m)    Amendment  No.  1 to  the  Amended  and  Restated  Capital     90
            Accumulation Plan.

  *10(n)    Executive  Loan  Program is set forth as Exhibit  10(k) in
            the  Company's  Annual  Report on Form 10-K for the fiscal
            year ended August 31, 1990.

  *10(o)    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.



<PAGE>



                          INDEX TO EXHIBITS (CONTINUED)
                          -----------------------------

EXHIBIT NO.                                                             PAGE NO.
-----------                                                             --------

  *10(p)    Non-Solicitation  Agreement  dated as of September 4, 1992
            among W.A. Williamson,  Jr.,  Durr-Fillauer  Medical, Inc.
            and Bergen  Brunswig  Corporation  is set forth as Exhibit
            (c)(2)   to   Amendment   No.   16  to   Bergen   Brunswig
            Corporation's  and BBC  Acquisition  Corp.'s  Tender Offer
            Statement  pursuant to Section  14(d)(1) of the Securities
            and Exchange Act of 1934.

  *10(q)    Non-Solicitation  Agreement  dated as of September 4, 1992
            among Charles E. Adair,  Durr-Fillauer  Medical,  Inc. and
            Bergen Brunswig Corporation is set forth as Exhibit (c)(3)
            to Amendment No. 16 to Bergen Brunswig  Corporation's  and
            BBC Acquisition Corp.'s Tender Offer Statement pursuant to
            Section  14(d)(1) of the  Securities  and  Exchange Act of
            1934.

  *10(r)    Non-Solicitation  Agreement  dated as of September 4, 1992
            among Winfield  Cotton,  Durr-Fillauer  Medical,  Inc. and
            Bergen Brunswig Corporation is set forth as Exhibit (c)(4)
            to Amendment No. 16 to Bergen Brunswig  Corporation's  and
            BBC Acquisition Corp.'s Tender Offer Statement pursuant to
            Section 14(d)(1) of the Securities Exchange Act of 1934.

  *10(s)    Agreement  dated as of  September  18,  1992 by and  among
            Bergen Brunswig Corporation,  Durr-Fillauer  Medical, Inc.
            and  the  Attorneys  General  of the  States  of  Alabama,
            Florida and Louisiana is set forth as Exhibit 10(p) in the
            Company's  Annual  Report on Form 10-K for the fiscal year
            ended August 31, 1992.

  *10(t)    Employment Agreement and Schedule.

  *10(u)    Severance Agreement and Schedule.

            Exhibit  10(t) and 10(u)  above are set forth as  Exhibits
            10(q) and 10(r) in the Company's Annual Report on Form 10-K
            for the fiscal year ended September 30, 1994.

   11       Computation of earnings per share for the three years          91
            ended September 30, 1996.

   21       List of subsidiaries of Bergen Brunswig Corporation            92

   23       Independent Auditors' Consent.                                 93

   24       Power of  Attorney is set forth on the  Signature  pages in
            Part IV of this Annual Report.



<PAGE>



                          INDEX TO EXHIBITS (CONTINUED)
                          -----------------------------

EXHIBIT NO.                                                             PAGE NO.
-----------                                                             --------

   27       Financial Data Schedule for the year ended September
            30, 1996.                                                     94

  *99(a)    Split  Dollar  Life  Insurance  Plan with Emil P.  Martini,
            Jr. and Robert E. Martini.

  *99(b)    Amended  and  Restated   Credit   Agreement  dated  as  of
            September  30, 1994 among Bergen  Brunswig  Drug  Company,
            Bergen Brunswig  Corporation and Bank of America  National
            Trust and  Savings  Association  is set  forth as  Exhibit
            99(h) in the Company's  Annual Report on Form 10-K for the
            fiscal year ended September 30, 1994.

  *99(c)    First and Second Amendments to Amended and Restated Credit
            Agreement  dated as of  February  27,  1995 and  March 16,
            1996,  respectively,  are set forth as Exhibits  99(a) and
            99(b), respectively,  in the Company's Quarterly Report on
            Form 10-Q for the quarter ended March 31, 1996.

  *99(d)    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,  are incorporated  herein by reference in Part
            I, Item 3 of this Annual Report.

  *99(e)    The Company's  Current  Report on Form 8-K dated  November
            10, 1996, relating to the execution of a definitive merger
            agreement with IVAX Corporation, is incorporated herein by
            reference in Part I, Item 1 of this Annual Report.

  *99(f)    The Company's  Schedule 13D and Form 3 dated  November 10,
            1996 relating to the definitive merger agreement with IVAX
            Corporation.

  *99(g)    Agreement and Plan of Merger dated as of September 4, 1992
            by and among Bergen Brunswig Corporation,  BBC Acquisition
            Corp.  and  Durr-Fillauer  Medical,  Inc.  is set forth as
            Exhibit  (c)(1) to  Amendment  No.  16 to Bergen  Brunswig
            Corporation's  and BBC  Acquisition  Corp.'s  Tender Offer
            Statement  Pursuant to Section  14(d)(1) of the Securities
            and Exchange Act of 1934.




<PAGE>


                          INDEX TO EXHIBITS (CONTINUED)
                          -----------------------------




*     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.

***   Incorporated  herein by  reference  to the  exhibits  filed as part of the
      Company's  Current  Report  on Form 8-K  relating  to the  execution  of a
      definitive  merger  agreement  with  IVAX  Corporation,   filed  with  the
      Securities and Exchange Commission on November 12, 1996.








<PAGE>



                                                                     Exhibit 3(a)
                          AMENDED AND RESTATED BY-LAWS

                           BERGEN BRUNSWIG CORPORATION

                             AS OF NOVEMBER 8, 1996

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

                                    ARTICLE I

                                     OFFICE
                                     ------

      Section 1. PRINCIPAL  OFFICE.  The principal  office of the corporation is
                 -----------------
hereby  fixed and  located at 4000  Metropolitan  Drive,  in the City of Orange,

County of Orange,  and State of  California.  The board of  directors  is hereby

granted  full power and  authority  to change said  principal  office to another

office within or without the State of California.

      Section 2. OTHER OFFICES. Branch or subordinate offices may at any time be
                 -------------
established  by the  board  of  directors  at any  place  or  places  where  the

corporation is qualified to do business.


                                   ARTICLE II

                             MEETING OF SHAREHOLDERS
                             -----------------------

      Section 1. PLACE OF MEETINGS.  All meetings of shareholders  shall be held
                 -----------------
at the principal  office of the corporation or at such other place in the States

of New  Jersey,  California  or New York as may be  designated  by the  board of

directors or its executive committee and stated in the notice of the meeting.

      Section 2. ANNUAL  MEETINGS.  An annual meeting of the shareholders of the
                 ----------------
corporation shall be held on such day during the months of December,  January or

February of each year, and at


<PAGE>



such hour,  as shall be fixed by the board of directors  and  designated  in the

notice of the meeting.

      Section 3. SPECIAL  MEETINGS.  Special meetings of the shareholders may be
                 -----------------
called  for any  purpose  and at any  time by the  chairman  of the  board,  the

president  or by the board of  directors  or as provided in the  certificate  of

incorporation.

      Section  4.  NOTICE OF  MEETINGS.  Written  notice of the time,  place and
                   -------------------
purposes of annual and special  meetings of shareholders  shall be given to each

shareholder entitled to vote at such meeting at least ten (10) days and not more

than sixty (60) days before the date of such  meeting,  either  personally or by

mail, charges prepaid, addressed to such shareholder at his address appearing on

the books of the corporation.

      Section 5. RECORD DATE.  The board of directors  shall fix the record date
                 -----------
for  determination  of  shareholders  entitled  to  notice of and to vote at any

annual or special  meeting of  shareholders.  Such record date shall not be more

than  sixty  (60)  days nor less  than ten  (10)  days  before  the date of such

meeting.

      Section 6.  NOMINATIONS  OF  DIRECTORS  AND  PROPOSALS  OF  BUSINESS TO BE
                 ---------------------------------------------------------------
CONSIDERED. (a) Nominations of persons for election to the board of directors of
----------
the   corporation  and  the  proposal  of  business  to  be  considered  by  the

shareholders  may be made at an annual meeting of  shareholders  (i) pursuant to

the corporation's notice of such annual meeting,  (ii) by or at the direction of

the board of directors or (iii) by any  shareholder of the corporation who was a

shareholder  of record at the time of giving of the notice  provided for in this

Article II, Section 6 and who is entitled to vote at the meeting,  provided that

such  shareholder  has  complied  with the notice  procedures  set forth in this

Article II, Section 6.

            (b) For nominations or other business to be properly  brought before

an annual meeting by a shareholder  pursuant to clause (iii) of paragraph (a) of

this  Article  II,  Section 6, the  shareholder  must have given  timely  notice

thereof  in  writing  to the  secretary  of the  corporation.  To be  timely,  a

shareholder's  notice  shall be  delivered  to the  secretary  at the  principal

executive offices of the corporation not less than sixty (60) days nor more than

ninety (90) days prior to the first  anniversary of the preceding  year's annual



<PAGE>


meeting;  provided,  however,  that in the  event  that the  date of the  annual

meeting is  advanced by more than thirty (30) days or delayed by more than sixty

(60) days from such  anniversary  date,  notice by the  shareholder to be timely

must be so  delivered  not earlier than the  ninetieth  (90th) day prior to such

annual  meeting  and not later  than the close of  business  on the later of the

sixtieth  (60th)  day  prior to such  annual  meeting  or the tenth  (10th)  day

following  the day on which public  announcement  of the date of such meeting is

first made. Such shareholder's notice shall set forth (i) as to each person whom

the  shareholder  proposes to nominate for election or reelection as a director,

all  information  relating to such person  that is required to be  disclosed  in

solicitations of proxies for election of directors, or is otherwise required, in

each case pursuant to Regulation 14A under the Securities  Exchange Act of 1934,

as amended (the "Exchange Act") (including,  without  limitation,  such person's

name,  address and principal  occupation  and such person's  written  consent to

being named in the proxy  statement as a nominee and to serving as a director if

elected);  (ii) as to any other business that the shareholder  proposes to bring

before the meeting,  a brief  description of the business  desired to be brought

before the meeting,  the reasons for conducting such business at the meeting and

any  financial or other  interest in such business of such  shareholder  and the

beneficial  owner, if any, on whose behalf the proposal is made; and (iii) as to

the  shareholder  giving the notice and the beneficial  owner,  if any, on whose

behalf  the  nomination  or  proposal  is made (1) the name and  address of such

shareholder,  as they appear on the corporation's  books, and of such beneficial

owner and (2) the class and number of shares of the corporation  which are owned

beneficially and of record by such shareholder and such beneficial owner.

            (c) Notwithstanding anything in the second sentence of paragraph (b)

of this Article II,  Section 6 to the contrary,  in the event that the number of

directors  to be  elected  to the  board  of  directors  of the  corporation  is

increased  and there is no public  announcement  naming all of the  nominees for

director or specifying the size of the increased  board of directors made by the

corporation  at least  seventy (70) days prior to the first  anniversary  of the

preceding year's annual meeting, a shareholder's notice required by this Article



<PAGE>


II, Section 6 shall also be considered timely, but only with respect to nominees

for any new positions created by such increase,  if it shall be delivered to the

secretary at the principal  executive  offices of the corporation not later than

the close of business on the tenth  (10th) day  following  the day on which such

public announcement is first made by the corporation.

            (d) Only such  persons  who are  nominated  in  accordance  with the

procedures set forth in this Article II, Section 6 shall be eligible to serve as

directors  and only such  business  shall be conducted  at an annual  meeting of

shareholders  as shall have been brought  before the meeting in accordance  with

the procedures set forth in this Article II, Section 6; provided,  however, that

the presiding  officer of the meeting may elect,  for good cause shown, to waive

one or more of the  procedures  of this  Article  II,  Section 6. The  presiding

officer  of the  meeting  shall have the power and duty to  determine  whether a

nomination or any business proposed to be brought before the meeting was made in

accordance  with the  procedures set forth in this Article II, Section 6 and, if

any proposed  nomination or business is not in compliance  with this Article II,

Section 6 and the presiding officer elects not to waive such non-compliance,  to

declare  that  such  defective   proposed   business  or  nomination   shall  be

disregarded.

            (e)  For   purposes  of  this   Article  II,   Section  6,   "public

announcement" shall mean disclosure in a press release reported by the Dow Jones

News  Service,  Associated  Press or a comparable  national news service or in a

document  publicly  filed by the  corporation  with the  Securities and Exchange

Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

            (f)  Notwithstanding  the  foregoing  provisions of this Article II,

Section 6, a shareholder  shall also comply with all applicable  requirements of

the Exchange Act and the rules and  regulations  thereunder  with respect to the

matters set forth in this  Article II,  Section 6.  Nothing in this  Article II,

Section 6 shall be  deemed to affect  any  rights  of  shareholders  to  request

inclusion of proposals in the  corporation's  proxy  statement  pursuant to Rule

14a-8 under the Exchange Act.

      Section 7. QUORUM.  Except as  otherwise  provided in the  certificate  of
                 ------
incorporation,  the  presence in person or by proxy of the holders of a majority



<PAGE>



of any class or series voting  separately at a meeting and a majority of any two

or more classes  voting  together as a class at such meeting shall  constitute a

quorum for the transaction of business; if any matter to come before the meeting

requires a vote of less than all the outstanding  classes,  then the presence in

person or by proxy of the  holders  of a  majority  of the class or  classes  or

series  having the right to vote on such matter or matters  shall  constitute  a

quorum for the transaction of such business.  The shareholders present at a duly

called or held  meeting at which a quorum is present may continue to do business

until adjournment notwithstanding the withdrawal of enough shareholders to leave

less than a quorum.

      Section 8.  ADJOURNED  MEETINGS  AND  NOTICE  THEREOF.  Any  shareholders'
                 ------------------------------------------
meeting, annual or special, whether or not a quorum is present, may be adjourned

from time to time by the vote of a majority  of the shares the  holders of which

are either present in person or represented by proxy at such meeting, but in the

absence  of a quorum  no  other  business  may be  transacted  at such  meeting;

provided,  however,  that if a quorum  of any class or  series  is  present  and

objects to such adjournment, the meeting shall not be adjourned.

            When  any  shareholders'  meeting,  either  annual  or  special,  is

adjourned for more than thirty days,  notice of the  adjourned  meeting shall be

given as in the case of an original  meeting.  If any such  meeting is adjourned

for  thirty  days or less,  however,  and the time  and  place of the  adjourned

meeting is announced at the meeting at which the  adjournment is taken,  and the

only business  transacted  at the  adjourned  meeting is such as might have been

transacted at the original  meeting,  no further notice of the adjourned meeting

need be given to shareholders.  If after the adjournment, the board of directors

fixes a new record  date for the  adjourned  meeting,  however,  a notice of the

adjourned meeting shall be given to each shareholder of record on the new record

date.

      Section 9.  VOTING.  Shareholders  shall  vote  their  stock in the manner
                 -------
provided  in the  certificate  of  incorporation  as amended  from time to time.

Shares held by the corporation shall not be voted at any meeting of shareholders

for any purpose.

      Section 10. PROXIES.  Every  shareholder  entitled to vote at a meeting of
                 --------
shareholders  may authorize  another  person or persons to act for him by proxy.



<PAGE>


Every proxy shall be executed in writing by the shareholder or his agent, except

that a proxy may be given by a shareholder  or his agent by telegram or cable or

by any means of electronic  communication  which results in a writing.  No proxy

shall be valid  after  eleven  months  from the date of its  execution  unless a

longer  time  is  expressly  provided  therein.  Unless  it  states  that  it is

irrevocable and is coupled with an interest either in the stock itself or in the

corporation, a proxy shall be revocable at will. A proxy shall not be revoked by

the death or incapacity of the shareholder but the proxy shall continue to be in

force  until  revoked  by  the  personal   representative  or  guardian  of  the

shareholder.  The presence at a meeting of any shareholder who has given a proxy

does not revoke the proxy unless the  shareholder  files  written  notice of the

revocation with the secretary of the meeting prior to the voting of the proxy or

votes the shares  subject to the proxy by written  ballot.  A person  named in a

proxy as the attorney or agent of a  shareholder  may, if the proxy so provides,

substitute another person to act in his place,  including any other person named

as an  attorney  or agent in the  same  proxy.  The  substitution  shall  not be

effective  until an  instrument  effecting it is filed with the secretary of the

corporation.

      Section 11.  OFFICERS OF MEETINGS.  The chairman of the board, if present,
                   --------------------
shall preside at all meetings of shareholders. In his absence, the president, if

present,  shall preside.  In his absence,  the vice president of the corporation

who has held that office for the longest  period of those present at the meeting

shall  preside.  The  secretary of the  corporation  shall,  if present,  act as

secretary  of all  meetings  of  shareholders.  In his  absence,  any  assistant

secretary  of the  corporation  who is  present  shall act as  secretary  of the

meeting.  If no assistant  secretary is present, a temporary  secretary for that

particular meeting shall be elected.

      Section 12.  ORDER OF  BUSINESS.  The order of business at all meetings of
                   ------------------
the  shareholders,  unless changed by a majority vote of the shares  entitled to

vote at such  meeting,  shall be as  follows:  (i) call to order;  (ii) proof of

mailing  of  notice of  meeting,  proxy and  proxy  statement;  (iii)  report on

presence of a quorum;  (iv) reading or waiver of minutes of  preceding  meeting;

(v)  election  of  directors;  (vi)  vote on other  proposals;  (vii)  report of

officers; and (viii) other business and adjournment.



<PAGE>


      Section 13. VOTING LIST.  The secretary or any assistant  secretary  shall
                  -----------
produce at each shareholders' meeting a list of shareholders entitled to vote at

the  meeting  or any  adjournment  thereof.  Such  list  shall  (a) be  arranged

alphabetically within each class and series, with the address of, and the number

of shares held by, each  shareholder,  (b) be subject to the  inspection  of any

shareholder  for reasonable  periods during the meeting,  and (c) be prima facie

evidence as to persons who are the shareholders entitled to examine such list or

to vote at the meeting.

      Section 14. ACTION BY  SHAREHOLDERS  WITHOUT A MEETING.  In order that the
                  ------------------------------------------
corporation  may  determine  the  shareholders  entitled to consent to corporate

action in  writing  without a meeting  pursuant  to  Section  14A:5-6 of the New

Jersey Business  Corporation  Act, any shareholder of record seeking to have the

shareholders  authorize or take corporate  action by written  consent shall,  by

written  notice to the  secretary,  request  that the board of  directors  set a

record  date.  Upon receipt of such  written  notice,  or in the absence of such

written  notice at any time at its election,  the board of directors  may, as it

deems  appropriate  and in  the  best  interests  of the  corporation,  adopt  a

resolution  setting a record date for purposes of determining  the  shareholders

entitled to consent to corporate action in writing without a meeting. Any record

date  set by the  board of  directors  pursuant  to this  Section  14 shall  not

precede,  and shall not be more than ten (10) days after,  the date on which the

resolution setting the record date is adopted by the board of directors.



                                   ARTICLE III

                               BOARD OF DIRECTORS
                               ------------------


      Section 1. NUMBER OF DIRECTORS.  The board of directors of the corporation
                 -------------------
shall be  composed  of not less than nine (9) nor more than  fifteen  (15) until

changed by an amendment of the certificate of incorporation  duly adopted by the

shareholders of the corporation.

            The board of  directors,  following  the  adoption of these  amended

by-laws,  shall consist of twelve (12)  members.  The number of directors may be



<PAGE>


increased or decreased within the foregoing  limitations by an amendment to this

Section 1 of Article III duly adopted by the board of directors.

      Section 2. TERM OF OFFICE; CLASSIFICATION OF DIRECTORS. The board shall be
                 -------------------------------------------
divided into three classes,  which shall be  denominated  Classes I, II and III,

respectively.  The number of directors in each class shall be as nearly equal as

possible.  All persons who are now Class A  directors  shall  continue in office

until the  expiration  of the terms for which they were  elected and  thereafter

until  their  successors  shall  have  been  elected  and  qualified.  All other

directors  shall  continue  in office  until the first  meeting of  shareholders

following  the  conversion of all Class B Common Stock into Class A Common Stock

pursuant  to  the  certificate  of  incorporation  (the  "First  Meeting"),  and

thereafter until their successors shall have been elected and qualified.

            At the First Meeting,  Class I directors shall be elected for a term

ending  at the  third  annual  meeting  of  shareholders  thereafter;  Class  II

directors  shall be elected  for a term  ending at the first  annual  meeting of

shareholders  thereafter;  and Class III  directors  shall be elected for a term

ending at the second annual meeting of shareholders thereafter. Management shall

recommend, and the board of directors shall determine,  which directors shall be

nominated for each such Class.

            At each meeting of shareholders  after the First Meeting,  directors

shall be elected to fill the directorships of the Class of directors whose terms

have  expired.  Those  directors  shall hold office  until the third  successive

annual meeting of shareholders  after their election and until their  successors

shall have been  elected  and  qualified,  so that  directors  elected at annual

meetings of  shareholders  subsequent to the First Meeting shall each be elected

for a three year term, and that the term of one class of directors  shall expire

at each annual meeting.

      Section 3.  RESIGNATION AND REMOVAL.  Any director may resign at any time.

Any director may be removed with or without cause as provided in the certificate

of  incorporation.  A special meeting for the purpose of removing a director may

be called  for by the  chairman  of the  board,  the  president  or the board of

directors.  Notice of such  meeting  shall be given to all the  shareholders  of



<PAGE>


Class A Common Stock in the manner  provided by these  by-laws for any annual or

special meeting. A new director may be elected at the special meeting called for

the purpose of removing  such  director or at any  subsequent  annual or special

meeting of  shareholders.  If such  director is elected at a special  meeting of

shareholders,  he shall serve until the term of the removed  director would have

expired  and  thereafter  until  his  successor  shall  have  been  elected  and

qualified.

      Section  4.  VACANCIES.  If any  vacancy  should  occur  in the  board  of
                   ---------
directors for any reason whatsoever, such vacancy may be filled by a majority of

the  remaining  directors.  Each director so elected shall hold office until the

next  succeeding  annual or special meeting of the  shareholders  and thereafter

until his successor shall have been elected and qualified.

            A vacancy or vacancies in the board of directors  shall be deemed to

exist in the case of the death,  resignation  or removal of any director,  or if

the authorized number of directors be increased,  or if the shareholders fail at

any special  meeting of the  shareholders at which any director or directors are

elected  to elect the  authorized  number of  directors  to be voted for at that

meeting.  No reduction  of the  authorized  number of  directors  shall have the

effect of removing any director prior to the expiration of his term of office.

            Subject to the provisions of the certificate of  incorporation,  the

shareholders  may elect a director or  directors at any time to fill any vacancy

or vacancies not filled by the directors.  If the board of directors accepts the

resignation of a director tendered to take effect at a future time, the board or

the  shareholders  shall have the power to elect a successor to take office when

the resignation is to become effective.

            If the  chairman  of the  board,  the  president  or  the  board  of

directors  shall so direct,  the secretary shall promptly call a special meeting

of  shareholders  to elect a director  to fill such  vacancy.  Any  director  so

elected shall hold office for a term which is not inconsistent with Section 2 of

Article III of these by-laws, and thereafter until his successor shall have been

elected and qualified.



<PAGE>


            If a  vacancy  of  all  directors  shall  occur,  the  president  or

secretary  shall promptly call a special  meeting of the  shareholders  to elect

directors to fill such vacancies. The persons so elected shall hold office until

the next annual meeting of shareholders  and thereafter  until their  respective

successors shall have been elected and qualified.

      Section 5. PLACE OF MEETING.  The board of directors may hold its meetings
                 ----------------
at such place or places  within or without  the State of New Jersey as the board

may from time to time determine.

      Section 6. REGULAR  MEETINGS.  Regular  meetings of the board of directors
                 -----------------
shall  be held on such  day in March or  April,  June or July and  September  or

October as shall be determined  from time to time by the board, at 10:00 a.m. or

at such other time designated by the board on such day; provided,  however, that

should said day fall upon a legal  holiday,  then any such meeting shall be held

at the same  hour and  place on the  next  succeeding  day  which is not a legal

holiday.  A fourth  regular  meeting of the board of directors  shall take place

immediately  following the conclusion of the annual meeting of shareholders.  At

the regular meeting of the board held  immediately  following the annual meeting

of shareholders, the board of directors shall organize and elect officers.

      Section 7.  SPECIAL  MEETINGS.  Special  meetings of the board of directors
                  -----------------
for any  purpose or  purposes  may be called at any time by the  chairman  of the

board, the president, or by any three (3) directors.

      Section 8. NOTICE OF MEETINGS. Notice of the place of each regular meeting
                 ------------------
of the board,  and notice of the time and place of each  special  meeting of the

board,  shall be given in  writing  to each  director  either by hand  delivery,

facsimile  transmission or mail, to the address or facsimile number, as the case

may be, of such director as shown upon the records of the  corporation.  If such

notice is delivered by hand or by facsimile transmission,  it shall be delivered

or transmitted, as the case may be, at least twenty-four (24) hours prior to the

time of the holding of the meeting.  If such notice is mailed,  it shall be sent

either by overnight mail, in which case it shall be deposited with the overnight

mail  service at least two days prior to the time of the holding of the meeting,

or by airmail, in which case it shall be deposited in the United States Mails at

least  one week  prior to the time of the  holding  of the  meeting.  Such  hand



<PAGE>


delivery,  facsimile  transmission  or mailing as above  provided  shall be due,

legal and personal notice to such director.

      Section 9. WAIVER OF NOTICE AND CONSENT.  The  transactions of any meeting
                 ----------------------------
of the board,  however called and noticed or wherever held, shall be as valid as

though  such  meeting had been duly held after a regular  call and notice,  if a

quorum be present and if, before or after the meeting, each of the directors not

present  signs a written  waiver of notice or a consent  to the  holding of such

meeting or an approval of the minutes  thereof.  All such  waivers,  consents or

approvals  shall  be  filed  with the  corporate  records  or made a part of the

minutes of the meeting.

      Section 10. ACTION WITHOUT MEETING. Any action required or permitted to be
                  ----------------------
taken by the board of directors by law or these  by-laws may be taken  without a

meeting,  if, prior or subsequent to such action, all members of the board shall

individually  or  collectively  consent  in writing  to such  action.  Each such

written  consent or consents shall be filed with the minutes of the  proceedings

of the  board.  Such  action by  written  consent  shall have the same force and

effect as a unanimous vote of such directors,  for all purposes. Any certificate

or other  document  which relates to action so taken shall state that the action

was taken by  unanimous  written  consent  of the board of  directors  without a

meeting, and that the by-laws authorize the directors so to act.

      Section 11. QUORUM.  A majority  of the  entire  board of  directors  shall
                  ------
constitute a quorum for the transaction of business.

      Section 12.  VOTING.  Every act or decision  done or made by a majority of
                   ------
the directors  present at a meeting duly held at which a quorum is present shall

be regarded as the act of the board of directors. In determining the presence of

a quorum and the result of a vote taken by the board,  no  distinction  shall be

made  among the  directors  with  respect  to the class or  classes or series of

shareholders which elected them.

      Section 13. PRESIDING OFFICER.  The chairman of the board shall preside at
                  -----------------
all meetings of the board at which he is present. In the absence of the chairman

of the board,  the president shall preside.  If the secretary of the corporation



<PAGE>


or any  assistant  secretary  is  present,  he shall  record the  minutes of the

meeting, and if neither of them is present the board shall designate a secretary

to record the minutes of the meeting.

      Section  14.  ADJOURNMENT.  A quorum  of the  directors  may  adjourn  any
                    -----------
directors'  meeting to meet again at a time and place  fixed in the  resolutions

adjourning  such  meeting,  and no notice of the time and place of the adjourned

meeting need be given if the period of  adjournment  does not exceed ten days in

any one  adjournment.  A meeting  of  directors  at which  less than a quorum is

present may also be adjourned until the next regular meeting of the board.

      Section 15.  DIRECTORS  EMERITUS.  The title of director  emeritus  may be
                   --------------------
conferred by the board of directors upon any former  director of the corporation

or of a  corporation  acquired by the  corporation  who, in the  judgment of the

board, has brought credit and distinction to this corporation,  or such acquired

corporation,  through long and  faithful  service.  The title hereby  created is

honorary only and does not carry with it the powers,  duties or obligations of a

director of this corporation or any other power,  duty or obligation.  The title

may be conferred upon as many persons as the board deems appropriate. A director

emeritus  shall not be deemed a director or member of the board of directors but

may attend meetings of the board and, upon invitation of the chairman,  may take

part in the deliberative proceedings of the board, but may not vote.

      Section 16. FEES AND COMPENSATION.  Directors shall receive for attendance
                  ---------------------
at each  regular or special  meeting  of the board a fixed sum and  expenses  of

attendance,  if any, and an annual fee for service as a director, such as may be

allowed  by  resolution  of the  board.  The board of  directors  may,  if it so

desires,  fix  one fee  for  directors  who are  officers  or  employees  of the

corporation (or who are receiving retirement benefits from it or a subsidiary or

under a pension  trust of a  subsidiary)  and a higher fee for other  directors.

Nothing  herein  contained  shall be construed  to preclude  any  director  from

serving  the  corporation  in any  other  capacity  and  receiving  compensation

therefor.


<PAGE>



                                   ARTICLE IV

                                   COMMITTEES
                                   ----------

      Section 1.  ESTABLISHMENT  OF  COMMITTEES.  The board of directors may, by
                  -----------------------------
resolution  adopted by a majority of the entire  board,  designate  an executive

committee, consisting of the chairman of the board, the president and two (2) or

more other directors, and may at any time designate additional committees,  each

of which shall consist of two (2) or more directors.  Subject to the limitations

contained in Section 8 of this Article IV, the  executive  committee  shall have

the maximum authority  permitted by law in effect at the time of the exercise of

such authority and each other committee shall have such authority, not exceeding

the  authority  of the  executive  committee,  as is  provided  by the  board of

directors in the resolutions creating such committee.

      Section 2.  PRESIDING  OFFICER AND  SECRETARY.  The  chairman of the board
                  ---------------------------------
shall be chairman of the executive committee.  In the absence of the chairman of

the board, the president shall reside.  Each other committee shall choose one of

its members to act as chairman. Each committee shall from time to time designate

a secretary of the committee who shall keep a record of its proceedings.

      Section  3.  VACANCIES.  Vacancies  occurring  from  time  to  time in the
                   ---------
membership  of any committee may be filled by a majority of the entire board for

the unexpired term of the member whose death, resignation, removal or disability

causes such vacancy,  and shall be so filled, if, as the result of such vacancy,

there shall be less than three (3) directors on the executive  committee or less

than two (2) directors on any other committee,  or, in the case of the executive

committee,  if the  chairman  of  the  board  should  be the  one  whose  death,

resignation, removal or disability causes such vacancy.

      Section 4. MEETINGS. Each committee shall adopt its own rules of procedure
                 --------
and shall meet at such stated time as it may, by resolution,  appoint, and shall

also  meet  whenever  called  together  by  the  chairman  of the  board  or the

president.

      Section  5.  NOTICE OF  MEETINGS.  If the  committee  established  regular
                   -------------------
meeting  dates,  it shall not be  necessary  to give notice of any such  regular

meeting. Notice of every special meeting shall be given in the manner and within

the time  periods  specified in Section 8 of Article III with respect to notices



<PAGE>


of special meetings of the board of directors. Notice of any special meeting may

be waived in writing by all of the absent members of the committee either before

or after the meeting.

      Section 6. QUORUM.  A quorum at any meeting of any committee  shall be not
                 ------
less than one-half (1/2) of the entire  committee.  In the case of the executive

committee, however, a quorum shall be not less than three (3) members. Every act

or decision done or made by a majority of the  directors  present at a committee

meeting  duly held at which a quorum is present  shall be regarded as the act of

the committee.

      Section 7. REPORTS.  Actions taken at a meeting of any committee  shall be
                 -------
reported to the board at its next  meeting  following  such  committee  meeting,

except  that when the meeting of the board is held within two (2) days after the

committee meeting,  such report shall, if not made at the first meeting, be made

to the board at the second meeting following such committee meeting.

      Section 8.  LIMITATION  OF POWERS.  No committee of the board of directors
                  ---------------------
shall have authority to do any of the following:

      (a) make,  alter or repeal  any  by-law of the  corporation;

      (b) elect or appoint any  director,  or remove any officer or  director;

      (c) submit to shareholders any action that requires shareholders'approval;

      (d) amend or  repeal  any  resolution  theretofore  adopted  by the board

          which by its terms is amendable or repealable only by the board;

      (e) fix the  compensation of any officer who is a member of the committee

          for serving as an officer of the corporation.

      Section 9. ADDITIONAL POWERS OF THE BOARD. The board shall have the power,
                 ------------------------------
with respect to existing committees, to

      (a) fill any vacancy in any such committee;
      (b) appoint one or more directors to serve as  alternative  members of any

          such committee to act in the absence or disability of  members of any

          such committee with all the powers of such absent or disabled members;

      (c) abolish any such committee at its pleasure; and



<PAGE>


      (d) remove any director  from  membership  on such  committee at any time,

          with or without cause.



                                    ARTICLE V

                                    OFFICERS
                                    --------

      Section 1. OFFICERS ENUMERATED. The board of directors shall designate and
                 -------------------
elect the  officers  of the  corporation  which  shall  include but shall not be

limited to a chairman of the board, a president,  one or more vice presidents, a

treasurer,  one or  more  assistant  treasurers,  a  secretary,  and one or more

assistant  secretaries.  Any two or more offices may be held by the same person,

except that no one person may hold the offices of president and  secretary.  The

chairman of the board and the president shall be directors.

      Section 2.  ADDITIONAL  OFFICERS.  The board of directors may from time to
                  --------------------
time elect such other officers as it shall deem necessary,  who shall hold their

offices for such terms and have such powers and perform  such duties as shall be

prescribed from time to time by the board.

      Section 3.  ELECTION AND TERM OF OFFICE.  Each  officer  shall hold office
                  ---------------------------
until the next annual  election of officers,  and until his  successor  has been

elected  and  qualified,  unless he is  earlier  removed.  All  officers  of the

corporation shall hold office at the pleasure of the board of directors,  except

as otherwise provided by contract between the corporation and any such officer.

      Section 4.  VACANCIES.  Any  vacancy  in an  enumerated  office or in  any
                  ---------
other office may be filled by the board of directors.

      Section 5. REMOVAL AND RESIGNATION. Except as provided by contract between
                 -----------------------
the  corporation  and any  officer,  any officer may be removed,  either with or

without cause,  by a majority of the directors at any regular or special meeting

of the board or by any officer  upon whom such power of removal may be conferred

by the board. Any officer may resign at any time by giving written notice to the

board or to the president. Any such resignation shall take effect at the date of



<PAGE>


the receipt of such notice or at any later time  specified  therein and,  unless

otherwise  specified  therein,  the acceptance of such resignation  shall not be

necessary to make it effective.

      Section 6. POWERS AND DUTIES.  The officers shall each have such authority
                 -----------------
and perform such duties in the  management  of the  corporation  as from time to

time may be prescribed by the board of directors or the executive  committee and

as may be delegated by the chairman of the board or president.

Without limiting the foregoing,

            (a)  CHAIRMAN OF THE BOARD.  The  chairman of the board shall be the
                 ---------------------
      chief  executive  officer  of the  corporation.  He shall  preside  at all

      meetings of the  shareholders  and at all  meetings of the  directors.  He

      shall,  subject  only  to  the  direction  and  control  of the  board  of

      directors, have general charge of, supervision over and responsibility for

      the business and affairs of the  corporation.  He shall generally  possess

      such powers and perform such duties as usually pertain to his office or to

      the office of the president.

            (b) PRESIDENT. The president shall generally possess such powers and
                ---------
      perform  such  duties  as  usually  are  incident  to  the  office  of the

      president, including power to supervise the business and activities of the

      corporation and to instruct, direct and control its other officers, agents

      and employees,  and shall perform such other duties as the chairman of the

      board shall direct.  In the absence of the chairman of the board, he shall

      preside at all meetings of shareholders and of the board of directors.

            (c) VICE  PRESIDENT.  The  corporation  shall  have one or more vice
                ---------------
      presidents as determined by the board of directors. The board of directors

      may  designate  one or more of such  vice  presidents  as  executive  vice

      president or senior vice president.  All vice  presidents  shall have such

      authority and shall  perform such duties as may be delegated  from time to

      time  by the  chairman  of the  board,  the  president  or  the  board  of

      directors.  Unless otherwise  ordered by the board of directors,  any vice

      president  may sign  contracts  or  other  instruments  authorized  either

      generally or specifically by the board of directors.



<PAGE>


            (d) SECRETARY.  The secretary or any assistant secretary shall cause
                ---------
      notices of all meetings to be served as  prescribed  in these  by-laws and

      shall  keep the  minutes of all  meetings  of the  shareholders,  board of

      directors and all  committees  of the board of directors or  shareholders,

      and shall have  charge of the seal of the  corporation.  He shall  perform

      such other  duties and possess  such other  powers as are  incident to his

      office  or as  are  assigned  to him by the  chairman  of the  board,  the

      president or the board of directors.

            (e) TREASURER. The treasurer shall have the custody of the funds and
                ---------
      securities of the  corporation  and shall keep or cause to be kept regular

      books of account for the corporation.  He shall account to the chairman of

      the board,  the  president  or the board of  directors  whenever  they may

      require  concerning all his  transactions  as treasurer and concerning the

      financial  condition of the corporation.  The treasurer shall perform such

      other  duties and possess  such other powers as are incident to his office

      or as shall be assigned to him by the chairman of the board, the president

      or the board of directors.

            (f)   CONTROLLER.   The   Controller   shall   have  the   immediate
                  ----------
      responsibility for the corporation's accounting practices,  maintenance of

      its  fiscal  records,   preparation  of  its  financial  reports  and  the

      responsibility for general accounting, cost accounting, budgetary controls

      and insurance  functions of the  corporation.  He shall be under the broad

      administrative  direction  of the  Vice  President,  Financial  and  Chief

      Financial  Officer,  and shall  perform such other duties and possess such

      other  powers as are incident to his office or as shall be assigned to him

      by the chairman of the board, the president or the board of directors.



                                   ARTICLE VI

                       CAPITAL STOCK AND OTHER SECURITIES
                       ----------------------------------

      Section 1.  ISSUANCE OF STOCK AND OTHER  SECURITIES.  Certificates  of any
                  ---------------------------------------
class of capital stock of the  corporation  and  certificates  representing  any

other securities of the corporation shall be signed by the president or any vice

president  and may be  countersigned  by the  secretary or the  treasurer or the



<PAGE>


assistant  secretary.  Any  or  all  signatures  upon  a  certificate  may  be a

facsimile.  Such certificates  shall be sealed with the seal of the corporation,

or  shall  bear a  facsimile  of such  seal;  and  such  certificates  shall  be

registered in such manner as the board of directors may by resolution prescribe.

      Section  2.  LOST,  STOLEN AND  DESTROYED  CERTIFICATES.  In case of lost,
                   ------------------------------------------
stolen or destroyed  certificates,  new certificates may be issued to take their

place upon receipt by the  corporation  of such bond of indemnity and under such

regulations as shall be prescribed by the board of directors,  but the giving of

a bond of indemnity may be waived by the board.

      Section 3.  TRANSFER OF  SECURITIES.  Shares of capital stock or any other
                  -----------------------
registered  securities of the corporation  shall be transferable on the books of

the  corporation by the holder  thereof in person or by his authorized  attorney

upon  surrender for  cancellation  to the transfer agent for such security of an

outstanding  certificate or certificates  for the same number of shares or other

security with an assignment and  authorization  to transfer  endorsed thereon or

attached thereto, duly executed, together with such proof of the authenticity of

the signature  and of the power of assignor to transfer  such  securities as the

corporation or its agents may require.

      Section 4. RECORD DATE FOR DIVIDENDS OR RIGHTS. The board of directors may
                 -----------------------------------
fix a record date in advance as of which shares of stock shall be held of record

to entitle a  shareholder  to the payment of any  dividend,  to the allotment of

rights,  or to exercise rights in respect to any change,  conversion or exchange

of capital stock of the corporation.  Such record date shall not precede by more

than sixty (60) days the date of such  dividend  payment,  or such  allotment of

rights,  or the date when such change,  conversion  or exchange of capital stock

shall take  effect.  Only  shareholders  of record on such  record date shall be

entitled to receive or exercise  such rights or benefits when they shall accrue,

notwithstanding  any  transfer  of any  stock on the  books  of the  corporation

subsequent to the record date which is fixed.

      Section 5. ISSUE OF NEW SHARES OR SALE OF  TREASURY  STOCK.  Shares of the
                 -----------------------------------------------
capital stock of the  corporation  which have been authorized but not issued and



<PAGE>


treasury  shares  may be  issued  or  sold  from  time  to  time  and  for  such

consideration  as may be determined by the board of  directors.  This  amendment

shall be effective as of December 1, 1988.



                                   ARTICLE VII

                                 CORPORATE SEAL
                                 --------------

      Section 1. FORM AND USE. The corporate seal shall have  inscribed  thereon
                 ------------
the  name of the  corporation,  the  year of its  incorporation,  and the  words

"Corporate Seal, New Jersey".  The seal may be used by causing it or a facsimile

thereof to be impressed or  reproduced on a document or  instrument,  or affixed

thereto.


                                  ARTICLE VIII

                                   FISCAL YEAR
                                   -----------

      Section 1. TIME.  The fiscal  year of the  corporation  shall  commence on
                 ----
October 1 of each calendar year.


                                   ARTICLE IX

                                   AMENDMENTS
                                   ----------

      Section 1.  AMENDMENTS  BY  SHAREHOLDERS.  These  by-laws  may be altered,
                  ----------------------------
amended or repealed and new by-laws may be added by the shareholders.


      Section 2.  AMENDMENTS BY THE BOARD OF DIRECTORS.  Subject to the right of
                  ------------------------------------
the  shareholders  provided in Section 1 of this  Article IX to adopt,  amend or

repeal the  by-laws,  the board of  directors  may adopt,  amend or repeal these

by-laws;  provided,  however,  that a by-law or amendment  thereto  changing the

number  of  directors  may be  adopted,  amended  or  repealed  by the  board of

directors  only for the purpose of fixing the exact number of  directors  within

the limits specified in Article III, Section 1, hereof.




<PAGE>



                                    ARTICLE X

                                  MISCELLANEOUS
                                  -------------

      Section  1.  INSPECTION  OF  CORPORATE  RECORDS.  The share  register,  or
                   ----------------------------------
duplicate  share  register,  the books of accounts and minutes of proceedings of

the shareholders,  directors and of the executive  committee may be examined for

any proper  purpose upon the written  demand of any person who shall have been a

shareholder of record or holder of a voting trust  certificate  for at least six

(6) months  immediately  preceding  his  demand,  or any person  holding,  or so

authorized  in writing by the  holders  of, at least  five  percent  (5%) of the

outstanding shares of any class. Such inspection shall be made at any reasonable

time not less than five (5) days after  such  person  shall  have given  written

notice of his demand to the  corporation.  Such inspection may be made in person

or by an agent or attorney and shall include the right to make extracts.  Demand

for inspection  other than at a  shareholders'  meeting shall be made in writing

upon the president or secretary of the corporation.

      Section 2. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the
                 -------------------
payment of money,  notes or other evidences of indebtedness,  issued in the name

of or payable to the corporation,  shall be signed or endorsed by such person or

persons and in such  manner,  manually or by  facsimile  signature,  as shall be

determined from time to time by the board of directors.

      Section 3.  EXECUTION OF  CONTRACTS.  The board of directors may authorize
                  -----------------------
any officer or officers,  agent or agents, to enter into any contract or execute

any  instrument  in the  name of and on  behalf  of the  corporation,  and  such

authority  may be general or  confined  to  specific  instances  and,  unless so

authorized by the board of directors,  no officer,  agent or employee shall have

any power or authority to bind the  corporation by any contract or engagement or

to pledge its credit or to render it liable for any purpose or for any amount.

      Section 4. VOTING SHARES OF OTHER CORPORATIONS. The chairman of the board,
                 -----------------------------------
the president or any vice president is hereby authorized to vote,  represent and

exercise on behalf of this corporation all rights incident to any and all shares



<PAGE>


of stock of any other  corporation or corporations  standing in the name of this

corporation.  The  authority  herein  granted may be exercised by such  officers

either in  person  or by proxy or by power of  attorney  duly  executed  by said

officer.

      Section 5. EMPLOYEE BENEFIT PLANS.  The corporation,  by resolution of the
                 ----------------------
board of  directors,  may adopt any one or more of the  following  plans for the

benefit of some or all employees,  as hereinafter  defined,  and their families,

dependents or beneficiaries:

            (a) plans  providing for the sale or  distribution  of its shares of

      any  class or  series,  held by it or issued  or  purchased  by it for the

      purpose,   including   stock   option,   stock   purchase,   stock  bonus,

      profit-sharing,  savings, pension,  retirement,  deferred compensation and

      other plans of similar nature,  whether or not such plans also provide for

      the distribution of cash or property other than its shares;

            (b) plans  providing for payments  solely in cash or property  other

      than shares of the corporation, including profit-sharing,  bonus, savings,

      pension,  retirement,  deferred  compensation  and other  plans of similar

      nature; and

            (c) plans for the  furnishing of medical  service,  life,  sickness,

      accident,  disability or  unemployment  insurance or benefits;  education;

      housing,  social and  recreational  service;  and other  similar  aids and

      services.

      The term  "employees" as used in this Section means  employees, officers,

directors,  and agents of the  corporation or any subsidiary  thereof,  or other

persons who are or have been actively  engaged in the conduct of the business of

the  corporation  or any  subsidiary  thereof,  including  any who have retired,

become  disabled or died prior to the  establishment  of any plan  heretofore or

hereafter adopted.

      Section 6. DIRECTOR LOANS.  The corporation may lend money to or guarantee
                 --------------
any obligation of, or otherwise assist any director of the corporation or of any

subsidiary,  whenever,  in the  judgment of the board of  directors,  such loan,

guarantee or assistance may  reasonably be expected to benefit the  corporation.

Any such loan, guarantee or other assistance may be made only when authorized by

a majority  of the  entire  board of  directors  and may be made with or without

interest  and  whether  unsecured  or secured in such  manner as the board shall

approve,   including,   without  limitation,  by  a  pledge  of  shares  of  the



<PAGE>


corporation,  and may be made upon such other terms and  conditions as the board

may  determine.  A  director  shall be  disqualified  from  voting  on any loan,

guarantee or other assistance proposed to be made to him or her pursuant to this

section.  The  statutory  power of the board of directors to make such loans and

guarantees and to provide other assistance to employees of the corporation other

than directors shall not in any way be limited to this section.

            By order of the Board of  Directors of Bergen  Brunswig  Corporation

this 8th day of November, 1996.



                                          Secretary



[ Seal ]



</TABLE>