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 the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes 4 No__

At November 30, 2000, 134,932,834 shares of Class A Common Stock were outstanding. The aggregate market value of the Class A Common Stock held by nonaffiliates of the registrant on November 30, 2000 was $1,950,823,860.

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

Within 120 days after September 30, 2000, the Company will either file a definitive proxy statement for its 2001 annual meeting of shareowners which will be incorporated by reference in Part III of this Annual Report on Form 10-K or will file an amendment to this Annual Report to provide the information called for by such Part III.

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

                       As of November 30, 2000, the Pharmaceutical Distribution segment operations were located in 38 leased and 15 owned locations ranging in size from approximately 1,000 to 220,000 square feet and have a combined area of approximately 3,949,000 square feet. The lease expiration dates of the leased facilities range from fiscal 2001 to fiscal 2008.

                       As of November 30, 2000, the PharMerica segment operations were located in 154 leased locations ranging in size from approximately 1,000 to 89,000 square feet and have a combined area of approximately 1,154,000 square feet. The lease expiration dates of the leased facilities range from fiscal 2001 through fiscal 2009.

                       As of November 30, 2000, the Other Businesses segment operations were located in one leased location comprising approximately 18,000 square feet. The lease expires in fiscal 2004.

                       The Company owns and leases an aggregate of approximately 249,000 square feet of general and executive offices in Orange, California and leases approximately 28,000 square feet of data processing offices in Montgomery, Alabama. The owned facility was purchased in October 1999. The lease expiration dates of the leased facilities range from fiscal 2004 to fiscal 2005.

                       The combined area of the Company's leased and owned facilities was approximately 3,360,000 and 2,038,000 square feet, respectively, as of November 30, 2000.

                       For additional information regarding the Company's lease obligations, see Note 9 of Notes to Consolidated Financial Statements appearing in Part II of this Annual Report.

                       There have been no new material matters in the legal proceedings as previously reported in Part I, Item 3 of the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1999 filed with the Securities and Exchange Commission on December 29, 1999 except as otherwise might be set forth below.

             1.1.1         As previously reported, 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, and on June 26, 1995, granted plaintiffs' motion for class certification of the consolidated actions. On September 8, 1995, the court entered an order staying all proceedings in the consolidated actions pending resolution of the federal action. To date, the action is still stayed. As previously reported, on May 2, 1994, the Company and Durr Drug Company were named as defendants, along with 25 other pharmaceutical related-industry companies, in a state antitrust class action in the Circuit Court of Greene County, Alabama entitled Durrett v. UpJohn Company, et al., No. 94-029 ("Alabama Complaint"). The Alabama Complaint alleges on behalf of a class of Alabama retail pharmacies and a class of Alabama consumers that the defendants conspired to discriminatorily fix prices to plaintiffs at artificially high levels. The Alabama Complaint seeks injunctive relief and treble damages. On June 25, 1999, the Alabama Supreme Court held that plaintiffs' claims are not valid under the Alabama antitrust statute. On November 29, 1999 the trial court dismissed the entire action in accordance with the mandate of the Alabama Supreme Court. Similar actions were also filed against the Company and other wholesalers and manufacturers in Mississippi, Montgomery Drug v. UpJohn, et. al., No. 97-0103, and in Tennessee, Graves v. Abbott, et. al., No. 25,109-II. The various state actions have not yet been set for trial.

             1.2.1         In addition to the above-mentioned state court actions in Section 1.1, the Company and other wholesaler defendants have been added as defendants in a series of related antitrust lawsuits brought by certain independent pharmacies who have opted out of the class action cases. After a successful motion by the Company and other wholesalers, the damage period in these cases was limited to October 1993 to the present. On July 17, 2000, the wholesaler defendants filed a motion for summary judgment. On November 6, 2000, the court granted the motion, dismissing all claims against the wholesalers. An Arkansas group of opt out plaintiffs filed a motion for reconsideration, requesting that their Arkansas state law claims not be dismissed. That motion is currently pending.

         On October 21, 1994, the Company entered into a sharing agreement with five other wholesalers and 26 pharmaceutical manufacturers. Among other things, the agreement provides that: (a) if a judgment is entered against both the manufacturer and wholesaler defendants, the total exposure for joint and several liability of the Company is limited to the lesser amount of either 1% of each shared judgment or an aggregate amount of $1 million on all shared judgments in all actions; (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 in an amount agreed to by the manufacturers (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 all antitrust actions raising the issues described above and which allege joint and several liability with at least one manufacturer, including the cases described in this Section.

             1.3.1         As previously reported, in February 1999, Perry Gottesfeld, an individual, filed a lawsuit against the Company and approximately sixteen other defendants in the case entitled, Perry Gottesfeld v. Alva-Amco, et. al., alleging that manufacturers and distributors of over the counter dandruff shampoos containing coal tar expose consumers to coal tar, a Proposition 65-listed carcinogen, without providing a warning. Shortly after Gottesfeld filed suit, the California Attorney General filed a separate action covering the same products. Under Proposition 65 and California's Business and Professions Code Section 17200 (Unfair Trade Practices), both Gottesfeld and the State are seeking substantial civil penalties, restitution, injunctive relief, attorney's fees and costs from the defendants. Both cases have been consolidated and are pending in San Francisco County Superior Court. The Company has filed an answer to both plaintiffs' claims and responded to discovery requests. Settlement discussions were ongoing until August 2000, but ceased when the plaintiffs demanded that defendants reformulate their products to below minimum levels set under the federal Food and Drug Administration ("FDA") Coal Tar Monograph, which defendants believe conflict irreconcilably with FFDCA requirements.

             1.3.2         On March 14, 2000, Gottesfeld filed a citizen's petition with the FDA requesting FDA to restrict the sale of pharmaceuticals containing coal tar to prescription only and to require additional warnings for cancer. The basis for the Gottesfeld Petition is an unvalidated scientific study concerning exposure to coal tar oil in mice, which is the same scientific evidence that both Gottesfeld and the Attorney General assert as the basis of their Proposition 65 claim.

             1.3.3         On September 22, 2000, the Court granted the Company's request for a stay of the action pending the FDA review of the Gottesfeld Petition, which is due by the end of January 2001. At the hearing on the stay, the Court evidenced a willingness to consider FDA's determination on the merits of plaintiffs' claims. Although the Company is cautiously optimistic that FDA will reaffirm its Monograph, and thereby uphold defendant's position that warnings are not required, the Company cannot guarantee that result. In any case, FDA's determination should provide an impetus for settlement, or reduce the duration of litigation.

             1.3.4         As of November 7, 2000, the court ordered a continuance of the Stay until January 31, 2001, at which time the parties will file a further status report.

             1.4.1         As previously reported, on or about March 5, 1999, the Company was notified that it was a potentially responsible party ("PRP") in connection with the Butterworth Landfill Site ("Butterworth Site") located in Grand Rapids, Michigan and that the U.S. EPA had entered into a Court-ordered consent decree ("Decree") with five principal PRP's to spend approximately $9.6 million on immediate responsive activities at the Butterworth Site, including remedial investigation and feasibility studies. In addition and pursuant to Section 107 of the CERCLA, the U.S. Department of the Interior has asserted a claim for damages caused to natural resources ("NRD Liability"). The present value of the expected remedial action at the Butterworth Site over the next thirty years is in excess of $20 million.

             1.4.2         The Company has tendered $53,000 in exchange for statutory contribution protection and a covenant not to sue in the Decree. The Decree was expected to be entered in the Fourth Quarter of 1999, but as of December 2000, still has not been entered. Upon entering the Decree, all EPA claims and NRD Liability against the Company will be released and any future contribution or cost recovery actions by other PRP's against the Company will be barred.

             1.4.3         The lengthy delay in filing to enter the Decree has been caused by an opposition to the same by a group of approximately 18 non-settling parties, known as the Varnum Group (the "Group"). The members of the Group are allegedly liable as generators of hazardous materials. The Group maintains that the settlement is unfair to them primarily because it does not include them, thereby leaving them exposed to an order from EPA to perform a portion of the work at the Butterworth Site and, potentially, to claims in contribution from the settling parties.

             1.4.4         In May 1999, the U.S. filed a Memorandum in Support of the Decree, which the Group opposed. In August 2000, the U.S. District Court Judge for the Western District of Michigan granted the United State's Motion for Entry of the Decree. However, in October 2000, the Company received service of the Group's notice to appeal. As of November 2000, the Group filed a motion to stay the appeal for seven weeks, pending ongoing settlement negotiations.

             1.5.1         In addition to the Butterworth Site and as previously reported, in January 1999, EPA identified the Company as a PRP at the Casmalia Superfund Site ("Casmalia Site") and sent the Company a demand for contribution of approximately $140,000. Working with a steering committee of counsel, the Company has negotiated a reduction in EPA's demands. On October 11, 1999, EPA revised its demands reducing the amounts demanded and providing two options through which PRPs may liquidate their liability. The current settlement demands range from $103,317 to $75,114. The Company has also asserted a defense that it should not be considered a PRP at the Casmalia Site on the ground that nearly all of the waste it sent to the Casmalia Site was covered by the so-called petroleum exclusion from the CERCLA. EPA has been considering the Company's claim to exclude this waste since June 9, 1999, and the Company does not expect a response in the foreseeable future.

             1.5.2         In December 1999, EPA set a "deadline" for the Company to indicate if it would accept one of the reduced settlement options. In June 2000, the Company conditionally accepted EPA's settlement terms. Both EPA and the PRP Steering Committee have entered into a tolling agreement to postpone the deadline for completing the settlement until EPA completes its review of the Company's claim that its waste was exempt from CERCLA.

             1.6.1         As previously reported, in November 1998 and February 1999, two putative securities class actions were filed against PharMerica and certain individuals ("Defendants") in the United States District Court for the Middle District of Florida. The Court consolidated the actions into one putative class action and appointed two groups as co-lead Plaintiffs for the proposed class, who filed a Consolidated Amended Complaint. The proposed classes consist of all persons who purchased or acquired stock of PharMerica between January 7, 1998 and July 24, 1998. The Consolidated Amended Complaint seeks monetary damages but does not specify an amount. In general, the Consolidated Amended Complaint alleges that the Defendants made material misrepresentations with respect to an alleged violation of generally accepted accounting principles, and omissions by withholding from the market information related to the costs associated with certain acquisitions. The Consolidated Amended Complaint alleges claims under Section 10(b) and 20(a) of the Securities Exchange Act of 1934. Defendants' motion to dismiss the Consolidated Amended Complaint with prejudice is pending before the Court.

             1.7.1         As previously reported, prior to the acquisition of PharMerica by the Company, the United States Department of Health and Human Services ("HHS"), during the course of a Medicare Audit of various nursing homes, requested PharMerica to produce records related to intravenous pharmaceuticals provided to particular nursing homes in 1997 and 1998. PharMerica cooperated with the audit and complied with the request. PharMerica has learned that HHS auditors allege that during the 1997-98 time frame, certain nursing homes, primarily operating in Texas, improperly billed Medicare for intravenous pharmaceuticals and related services. The government has been made aware that PharMerica did not bill the Medicare program for the goods and services it sold to nursing homes. On or about June 1, 2000, the government filed a lawsuit against one former chain of thirteen Texas nursing homes, Sensitive Care, in which the government alleges that Sensitive Care filed false claims for Medicare reimbursement. The government has not quantified the extent of any damages it allegedly suffered. Sensitive Care has filed for bankruptcy in the Northern District of Texas, thus, the government's complaint against Sensitive Care has been filed in bankruptcy court there, as a creditor's claim. In its Answer to the government's lawsuit, Sensitive Care has denied liability, but has further alleged that PharMerica is liable for any false claim liabilities that may be imposed against Sensitive Care under an indemnification clause contained in the pharmacy services contract(s) between PharMerica and the nursing homes Sensitive Care formerly operated. PharMerica was served with a copy of Sensitive Care's third-party complaint seeking indemnification and intends to defend vigorously against the imposition of any liability against it for fraudulent billings that an independent third-party organization, like Sensitive Care, may have submitted to the government.

             1.8.1         As previously reported, PharMerica had been informed by the State of Hawaii Medicaid Fraud Division that it had initiated an investigation into possible violations of Medicaid regulations by a pharmacy operated by PharMerica in Honolulu, Hawaii. PharMerica conducted an internal investigation in conjunction with the State. After extensive discussions with the responsible State authorities, the Company believes a resolution of this matter is probable in the near future, which would include monetary liability in an amount not material to the Company on a consolidated basis.

             1.8.2         In addition, due to the nature of the business of PharMerica that involves payments under various federal and state programs, PharMerica is regularly subject to audit, review and investigation processes of government entities, quasi-governmental entities and third-party payors.

             1.9.1         As previously reported, a United States federal investigation of Stadtlander with respect to possible violations of the Medicare and Medicaid provisions of the Social Security Act is being conducted ("OIG Investigation"). The commencement of the investigation predated the ownership of Stadtlander by Counsel Corporation, the entity that sold Stadtlander to the Company. More specifically, the Office of Inspector General ("OIG") is investigating whether Stadtlander properly issued credits or refunds to the Medicare and/or Medicaid programs in cases where such credits or refunds may have been due. The Company has been advised that while owned by Counsel Corporation, Stadtlander cooperated fully with the authorities investigating this matter, and the Company continues to do so. As announced in or about September 2000, the Company entered into an Asset Purchase Agreement ("Stadtlander Sale Agreement") with ProCare Pharmacy, Inc. and certain of its designated affiliates to sell substantially all of the assets and business operations of Stadtlander (except for the Corrections Division). Notwithstanding the completion of the sale of such assets and business operations, according to the terms of the Stadtlander Sale Agreement, the Company continues to remain responsible for any and all fees, costs and expenses and any resulting liability arising from matters such as the OIG Investigation.

         Although the amount of liability at September 30, 2000 with respect to the referenced proceedings in Section 1 above cannot be ascertained, in the opinion of management, based upon information currently available to management, any resulting liability is not likely to have a material adverse effect on the Company's consolidated financial position, results of operations or cash flows. This statement represents a forward-looking statement under the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from management's opinion based on a variety of factors, including the uncertainties involved in the proof of legal and factual matters in complex legal proceedings.

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

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

             2.1.3         Certain of the defendants made a motion to compel arbitration of the Company's claims against them, which the Court denied in January 2000. The same defendants then made a renewed motion to compel arbitration, which the Court was tentatively inclined to deny on April 28, 2000. On June 6, 2000, the Counsel defendants voluntarily withdrew their arbitration request.

             2.1.4         On July 28, 2000, the Company filed and served upon the Counsel defendants a First Amended Complaint, wherein it provided additional details concerning the accounting irregularities committed by the Counsel defendants in connection with the sale of Stadtlander to the Company.

             2.1.5         The Company subsequently dismissed voluntarily defendant John Feehan without prejudice, and defendant Feehan's motion to quash service of summons, filed on September 11, 2000 was taken off calendar.

             2.1.6         Defendants Counsel Corporation, Stadt Holdings, Inc., Allan C. Silber, Morris A. Perlis and James Sas filed and served an Answer to the First Amended Complaint on September 15, 2000, and defendants Counsel Corporation and Stadt Holdings, Inc. filed and served a Cross-Complaint against the Company on September 15, 2000. The Cross-Complaint purports to state two causes of action against the Company, for breach of the Amended and Restated Purchase Agreement governing the Stadtlander acquisition, and for breach of the implied covenant of good faith and fair dealing. On October 13, 2000, the Company filed and served an Answer to the Cross-Complaint, in which it denied the material allegations of the Cross-Complaint and disputes that Counsel Corporation and Stadt Holdings, Inc. are entitled to any damages or other relief whatsoever.

             2.1.7         At a Status Conference on August 17, 2000, the parties stipulated to the appointment of the Honorable Eli Chernow as discovery referee to hear and decide any and all discovery motions and disputes relevant to discovery in the lawsuit. An order of reference for the discovery referee was filed on October 12, 2000 and was signed by the Court on that date.

             2.1.8         The Court has set a tentative trial date in the action for August 20, 2001. Written discovery and document discovery have commenced in earnest. Apart from the deposition of defendant John Feehan on jurisdictional issues, no other depositions have been noticed or taken to date.

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

             2.2.1         As previously reported, following the Company's October 14, 1999 announcement that it would not meet analysts' consensus earnings estimates for its fourth quarter and fiscal year ended September 30, 1999, due to, in part, lower than expected results at Stadtlander and PharMerica, and following the Company's disclosures, in its complaint against the Counsel defendants, reported by the press on October 15, 1999, regarding the accounting irregularities involved in the Stadtlander acquisition, 10 purported shareholder class action lawsuits were commenced against the Company and certain of its officers and directors in federal court in California. By order of the Court, pursuant to the parties' stipulation, the 10 cases have been consolidated into a single action in the Southern Division of the United States District Court for the Central District of California (the "Bergen securities action").

             2.2.2         The Bergen securities action is purportedly brought on behalf of a class of the Company's shareholders who purchased or otherwise acquired the Company's common stock from March 16, 1999 through October 14, 1999, and were allegedly damaged thereby. The Bergen securities action asserts, among other things, various similar claims under sections 11, 12 and 15 of the Securities Act 1933, and under sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. In general, the Bergen securities action alleges that the Company and certain of its officers and directors made material omissions and misrepresentations in their PharMerica Proxy Statement/Prospectus, and in other public statements prior to October 14, 1999, by failing to disclose sooner certain accounting irregularities the Company uncovered at Stadtlander after its acquisition, and by allegedly failing to disclose sooner that the reserves for uncollectible accounts receivable at PharMerica were allegedly understated by approximately $35 million.

             2.2.3         On or about April 25, 2000, plaintiffs filed and served a consolidated amended complaint in the Bergen securities action. On June 23, 2000, the Company filed and served a motion to dismiss plaintiffs' consolidated amended complaint in the Bergen securities action. Plaintiffs have responded to the Company's motion, and the Company has filed and served its reply. The hearing currently is scheduled to take place on January 28, 2001.

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

             2.2.5         By order of the Court, pursuant to the parties' stipulation, the Trust securities cases also have been consolidated into a single action in the Southern Division of the United States District Court for the Central District of California (the "Trust securities action"), and have been coordinated with the Bergen securities action as related cases for pre-trial purposes. The Trust securities action purportedly is brought on behalf of a class of persons who purchased shares of the Trust's Preferred Securities pursuant to the May 26, 1999 offering of such securities, including, in two of the cases, persons who thereafter acquired any such Preferred Securities on the open market prior to October 14, 1999.

             2.2.6         The Trust securities action asserts claims under sections 11, 12 and 15 of the Securities Act of 1933, as well as claims under sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. In general, the Trust securities action contends that the Trust and the Company failed to fulfill a purported duty to disclose in the Company's 1999 Registration Statement, and in related offering materials with respect to the issuance of the Trust's Preferred Securities, and that the financial data provided by the Company was supposedly unreliable because Stadtlander was suffering from accounting irregularities as a result of the fraud of the Counsel defendants. The complaint in the Trust securities action also alleges that the Company should have disclosed PharMerica's problems arising from uncollectible accounts receivable sooner than it did.

             2.2.7         On or about June 8, 2000, Plaintiffs filed and served a consolidated amended complaint in the Trust securities action. On August 1, 2000, the Company filed and served a motion to dismiss the consolidated amended complaint in the Trust securities action. Plaintiffs have responded to the Company's motion, and the hearing currently is scheduled to take place on January 28, 2001.

             2.2.8         The Plaintiffs in the Bergen securities action and the Trust securities action seek damages in an unspecified amount, and/or rescission, as well as pre-judgment and post-judgment interest, costs and attorneys' fees. Pursuant to court order, "lead plaintiffs" and "lead counsel" have been appointed in the Bergen securities action and the Trust securities action under the Private Securities Litigation Reform Act of 1995 (the "PSLRA"). Except as set forth above, no motions are currently pending in any of the actions. No discovery has been commenced by any party to date in any of the actions, except for two third-party subpoenas issued to preserve evidence pending resolution of the pleadings. No trial dates have been set in any of the actions.

             2.2.9         On March 15, 2000, the Company accepted service of a purported shareholder derivative action pending in the Orange County Superior Court (the "Bergen derivative action"). The Bergen derivative action asserts several purported state law causes of action against the directors and certain senior officers of the Company (the "individual defendants"), and also against the Company (as a nominal defendant), alleging, in general terms, various alleged fiduciary breaches and related claims arising from the alleged failure of the individual defendants to conduct adequate due diligence before proceeding with the Stadtlander acquisition and causing Bergen to allegedly violate federal securities laws, as alleged in the Bergen securities action and Trust securities action.

             2.2.10         On Thursday, April 13, 2000, the Company and the individual defendants removed the Bergen derivative action to federal court, on the ground that the purported state law causes of action asserted in the complaint all derive from, and depend upon the resolution of, substantial questions of federal securities law. The plaintiff filed and served a motion to remand the Bergen derivative action to the Orange County Superior Court. The Company opposed plaintiff's motion to remand, to which the plaintiff replied. The Court issued an Order dated August 2, 2000, denying the plaintiff's motion to remand.

             2.2.11         The Company and the individual defendants requested that the derivative complaint be consolidated and/or coordinated with the Bergen securities action and the Trust securities action. To that end, the Bergen derivative action has been assigned to the same Court in which the Bergen securities action and the Trust securities action are pending.

             2.2.12         The Company filed and served a motion to dismiss the complaint in the Bergen derivative action. The plaintiff filed an opposition to that motion, to which the Company replied. On November 28, 2000, the Court issued an order granting the Company's motion to dismiss the derivative action, pursuant to which it dismissed the derivative complaint without leave to amend. On December 7, 2000, the plaintiff in the Bergen derivative action filed and served a motion for reconsideration of the Court's order dismissing the action. The hearing on plaintiff's motion for reconsideration is set for hearing on February 26, 2001. The Company intends to oppose the motion.

             2.2.13         The Company has reached a tentative settlement agreement with plaintiffs' counsel in the various actions, together with its directors' and officers' liability insurance carriers. The Company has submitted for filing and service a third party complaint against its carriers in connection with their settlement and indemnification obligations. The time for the carriers' response to the third party complaint will be set at the time of formal service of the complaint.

             2.2.14         The Company believes that it is likely that the cases will be settled in accordance with the parties' mediated settlement proposal, as modified by the Company's subsequent discussions with its insurance carriers. However, pending confirmation of the settlement and its approval by the Court, the Company intends to vigorously defend against the claims asserted in the various purported shareholder class action lawsuits and the Bergen derivative action. Due to the incipient stage of the litigation, its ongoing status, and the necessary uncertainties involved in all litigation, the Company does not believe it is feasible at this time to assess the likely outcome of the foregoing litigation, the timing of its resolution, or its ultimate impact, if any, on the Company's financial condition, results of operations and cash flows.

The proceedings referenced in Section 2 are in their early stages and discovery has not been completed. The Company does not believe it is currently feasible to predict or determine the outcome or resolution of these proceedings, or to estimate the amounts of, or potential range of, loss, if any, with respect to these proceedings.