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U.S. Securities and Exchange Commission
Washington, D.C. 20549
Notice of Exempt Solicitation
submitted pursuant to Rule 14a-6(g)
1. Name of Registrant:
The Bergen Brunswig Corporation
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2. Name of person relying on exemption:
College Retirement Equities Fund
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3. Address of person relying on the exemption:
730 Third Avenue, New York, NY 10017
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4. Written materials. The following materials are attached:
Exhibit 1: Letter from Teachers Insurance and Annuity Association -
College Retirement Equities Fund to the shareholders of the
Bergen Brunswig Corporation
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Teachers Insurance and Annuity Association Peter C. Clapman
College Retirement Equities Fund Senior Vice President and Chief
Counsel, Investments
730 Third Avenue/New York, NY 10017-3206
212 490-9000
March 29, 1999
Dear Fellow Bergen Brunswig Shareholder:
TIAA-CREF is a long-time holder of equity in Bergen Brunswig and
currently owns 2.1 million shares, (or 1.9%) of Bergen's common stock. At
Bergen's April 22 annual meeting, we intend to propose a resolution (set forth
in Bergen's proxy statement) that requests the Board of Directors to redeem the
Company's "dead hand" poison pill unless shareholders vote otherwise. We are
asking for your support of our proposal.
BERGEN'S DEAD HAND PILL DISENFRANCHISES SHAREHOLDERS
Bergen's dead hand poison pill can be redeemed only with the consent
of Bergen's current directors (or future directors approved by them). Therefore,
if Bergen's directors were to reject an attractive third-party acquisition offer
that shareholders favored, the shareholders would have no ability to replace
Bergen's directors with directors who would have the power to redeem the pill
and allow shareholders to accept that offer. We cannot accept the premise that
Bergen's current directors (and their nominees) are the only individuals who can
accept or reject an acquisition bid for the company. We believe that Bergen's
directors have appropriated to themselves a power that should reside with the
shareholders, the owners of the company.
It is noteworthy that, while New Jersey courts have yet to rule on
the validity of dead hand pills, they have been declared illegal in Delaware,
the state in which the majority of U.S. public companies are incorporated.
BERGEN MISSES THE POINT IN ITS ARGUMENTS AGAINST OUR PROPOSAL
In its proxy statement, Bergen Brunswig argues against the TIAA-CREF
resolution mainly by presenting the logic behind poison pills in general. This
misses the point. Our resolution is focused on a particular provision of
Bergen's pill-the dead hand (or continuing directors) provision, which is not
included in the poison pills adopted by most other companies.
Bergen does make one argument specifically on the dead hand
provision, saying that "such provisions assure that persons with background and
experience in issues relating specifically to Bergen" deal with acquisition
offers. Again, this misses the point. Our concern is about the possibility of
entrenchment by the board and management should the company receive an
unsolicited takeover bid. The only practical way a potential acquirer could gain
control of sufficient voting power to replace the board-and thereby redeem the
pill in the face of opposition by current directors-is by soliciting our votes.
The dead hand ignores the will of the shareholders by subverting the voting
process. If the
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March 29, 1999
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potential acquirer tried to obtain sufficient voting power to replace the board
through stock purchases or voting agreements, Bergen's pill would be triggered
and the potential acquirer would suffer substantial economic dilution.
Therefore, a third party bidder could only replace the current board if Bergen's
other shareholders approved of the proposed transaction and granted that party
their proxies. This is how corporate governance is supposed to work.
OTHER COMPANIES HAVE PULLED THEIR DEAD HAND PROVISIONS
TIAA-CREF, the world's largest pension system and a significant
investor in virtually all major U.S. companies, has asked a number of other
companies to drop their dead hand provisions. Most of the companies receiving
our resolution have voluntarily amended their pills to remove the dead hand
provisions.
We are so concerned about Bergen's dead hand pill that we are
bringing this very important issue to our fellow shareholders. We would be happy
to discuss this matter with you in more detail. Please contact Ken Bertsch of
TIAA-CREF at (212) 916-4972 with any questions you might have.
Sincerely,
/s/ Peter C. Clapman
