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 December 31, 1998
Commission File Number 1-1136
BRISTOL-MYERS SQUIBB COMPANY
 (Exact name of registrant as specified in its charter)

              Delaware                                22-079-0350
    (State or other jurisdiction of          (IRS Employer Identification No.)
    incorporation or organization)

345 Park Avenue, New York, N.Y. 10154
(Address of principal executive offices)

Telephone: (212) 546-4000
Securities registered pursuant to Section 12(b) of the Act:

                                                 Name of each exchange on
Title of each class                                  which registered

Common Stock, $.10 Par Value                     New York Stock Exchange
                                                 Pacific Exchange, Inc.

$2 Convertible Preferred Stock, $1 Par Value     New York Stock Exchange
                                                 Pacific Exchange, Inc.	

Securities registered pursuant to Section 12(g) of the Act: None
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 the 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 [ ]
The aggregate market value of voting stock held by non-affiliates of the registrant as of February 28, 1999 was $124,844,900,316. At February 28, 1999, there were 1,985,569,810 shares of common stock outstanding.
Documents incorporated by reference
Proxy Statement for Annual Meeting of Stockholders on May 4, 1999. Part III

PART I
Item 1.BUSINESS.
DESCRIPTION OF BRISTOL-MYERS SQUIBB COMPANY

General:
Bristol-Myers Squibb Company ("Bristol-Myers Squibb" or the "Company") was incorporated under the laws of the State of Delaware in August 1933 under the name Bristol-Myers Company as successor to a New York business started in 1887. In 1989, the Bristol-Myers Company changed its name to Bristol-Myers Squibb Company, as a result of a merger. The Company, through its divisions and subsidiaries, is a major producer and distributor of pharmaceuticals, consumer medicines, nutritionals, medical devices and beauty care products. In general, the business of the Company's segments is not seasonal.
BUSINESS SEGMENTS
Reference is made to Note 4 Acquisitions and Divestitures and Note 13 Segment Information in the Notes to Consolidated Financial Statements included in
Part II, Item 8 of this Form 10-K Annual Report.
DESCRIPTION OF SEGMENTS

MEDICINES:
This segment includes sales of pharmaceuticals, mainly cardiovascular, anti-cancer, anti-infective and central nervous system drugs, and consumer medicines, mainly analgesics.

                             1998          1997           1996
                           ------       -------        -------
Cardiovascular             $3,210        $2,905         $2,816
Anti-cancer                 2,925         2,420          1,971
Anti-infective              2,412         2,235          1,856
Central nervous system      1,099           955            760
Analgesics                    722           739            718
Other                       2,205         1,957          1,727
                           ------       -------        -------
Total Segment             $12,573       $11,211         $9,848
                           ------       -------        -------	

1

The principal products in this segment are:

Cardiovascular:
---------------

PRAVACHOL*           pravastatin sodium, an HMG Co-A reductase inhibitor.
                     Patents expire in the U.S. in October 2005 and in
                     international markets from 2000 through 2010.

CAPOTEN*/CAPOZIDE*   captopril, an angiotensin converting enzyme (ACE)
                     inhibitor.  Patents have expired in the U.S. and in all
                     significant international markets.

MONOPRIL*            fosinopril sodium, a second-generation ACE inhibitor with
                     convenient once-a-day dosing.  U.S. patent expires in
                     December 2002 and in international markets from 2001
                     through 2008.

PLAVIX               clopidogrel, a platelet inhibitor, co-developed and
                     jointly marketed with Sanofi S.A.

AVAPRO               irbesartan, an angiotensin II receptor antagonist,
                     co-developed and jointly marketed with Sanofi S.A.

SOTACOR*             sotalol, a beta blocker with unique antiarrhythmic
                     qualities

QUESTRAN*            cholestyramine, a cholesterol-reducing agent

CORGARD*/CORZIDE*    nadolol, a once-a-day beta blocker used in the treatment
                     of hypertension and angina pectoris

Anti-cancer:
------------

TAXOL*(R)            paclitaxel, used in the treatment of refractory ovarian
                     cancer, the second-line treatment of AIDS-related
                     Kaposi's sarcoma, and in treatment of breast cancer after
                     failure of combination chemotherapy for metastatic
                     disease or relapse within six months of adjuvant
                     chemotherapy.  Three hour infusion method of
                     administration patent expiring from 2012 through 2013.
                     Hatch-Waxman exclusivity for first line ovarian cancer
                     expires April 2001.

PARAPLATIN*          carboplatin, a chemotherapeutic agent used in the
                     treatment of ovarian cancer. Patent expires in the U.S.
                     in April 2004 and in France in June 2000.

PLATINOL*            cisplatin, used in the treatment of ovarian, testicular
                     and advanced bladder cancer

VEPESID*             etoposide, used in the treatment of small-cell lung
                     cancer and refractory testicular cancer	

* Indicates brand names of products which are registered trademarks owned by the Company.
2

IFEX*                ifosfamide, injectable alkylating agent used as third-line
                     therapy of germ cell testicular cancer

Anti-infective:
---------------

ZERIT*               stavudine, used in the treatment of persons with advanced
                     HIV disease.  Patent expires in the U.S. in June 2008 and
                     internationally from 2007 through 2008.

CEFZIL*              cefprozil, an oral cephalosporin used in the treatment of
                     respiratory infections and sinusitis

DURICEF*             cefadroxil, an oral cephalosporin.  U.S. patent expires
                     March 2002.

VIDEX*               didanosine, an antiretroviral drug used in the treatment
                     of adult and pediatric patients with advanced human
                     immunodeficiency virus (HIV) infection. Patent expires in
                     the U.S. in August 2006 and internationally from 2006
                     through 2009.

MAXIPIME*            cefepime, a fourth generation injectable cephalosporin

VELOSEF*             cephradine, an oral cephalosporin

AMIKIN*              amikacin, an aminoglycoside

AZACTAM*             aztreonam, a monobactam antibiotic	

Central nervous system:

BUSPAR*              buspirone, a novel anti-anxiety agent that effectively
                     relieves persistent anxiety with or without accompanying
                     depressive symptoms.  U.S. anxiolytic use patent expires
                     in May 2000.  Other international patents expire in May
                     1999.

SERZONE*             nefazodone, an antidepressant treatment which offers a
                     low incidence of side-effects. Patent expires in the U.S.
                     in March 2003 and internationally from 2002 through 2010.

STADOL NS*           butorphanol NS, a prescription nasal spray analgesic.
                     U.S. patent expires August 2001.

Analgesics:
-----------

EXCEDRIN*            an analgesic with acetaminophen and caffeine

EFFERALGAN*          an analgesic which uses effervescent technology

BUFFERIN*            an analgesic with buffered aspirin	

3

Other:
------

GLUCOPHAGE           metformin, an oral anti-diabetes agent for type 2
                     non-insulin-dependent diabetes. Hatch-Waxman exclusivity
                     expires in March 2000.

DOVONEX*             calcipotriene, a vitamin D3 analog for the treatment of
                     moderate psoriasis

ESTRACE*             stradiol, a low-dose estrogen replacement therapy

KERI*                a line of moisturizing body lotions and shower and bath
                     oils

COMTREX*             a multi-symptom cold reliever	

BEAUTY CARE:
This segment includes sales of haircoloring and hair care preparations and other beauty care products.

                         1998          1997          1996
                      --------      --------      --------
Hair care              $1,179        $  794        $  586
Haircolor                 894           841           812
Other                     232           260           265
                      --------      --------      --------
Total Segment          $2,305        $1,895        $1,663
                      --------      --------      --------	

The principal products in this segment are:

NICE 'N EASY*         haircolorings
MISS CLAIROL*
HYDRIENCE*
NATURAL INSTINCTS*
ULTRESS*
LOVING CARE*
REVITALIQUE*

HERBAL ESSENCES*      complete lines of shampoos and conditioners	

AUSSIE*
INFUSIUM 23*
DAILY DEFENSE*
4

SYSTEME BIOLAGE*      professional hair care products sold
MATRIX ESSENTIALS*    exclusively in beauty salons
VITAL NUTRIENTS*
VAVOOM*

MUM*                  anti-perspirants and deodorants

SEA BREEZE*           skin care products	

NUTRITIONALS:
This segment includes sales of infant formulas and other nutritional products.

                             1998          1997         1996
                          --------      --------     --------
Infant formulas            $1,203        $1,219       $1,201
Other                         556           574          493
                          --------      --------     --------
Total Segment              $1,759        $1,793       $1,694
                          --------      --------     --------	

The principal products in this segment are:

ENFAMIL*/ENFALAC*     infant formula products
PROSOBEE*
NUTRAMIGEN*
LACTOFREE*

ENFAPRO*              follow-up formula products for older babies	

NEXT STEP*
ALACTA NF*
ENFAGROW*

SUSTAGEN*             nutritional supplements and specialties
CHOCO MILK*
ISOCAL*
SUSTACAL*
NUTRAMENT*
BOOST*

PLUSSSZ*              vitamins	

POLY-VI-SOL*
POLY-VI-FLOR*
NATALINS*
5

MEDICAL DEVICES:
This segment includes sales of orthopaedic implants, ostomy and wound care products and other medical devices.

                             1998         1997        1996
                          --------     --------    --------
Orthopaedic implants       $  596       $  615      $  644
Ostomy                        464          451         452
Other                         587          736         764
                          --------     --------    --------
Total Segment              $1,647       $1,802      $1,860
                          --------     --------    --------	

The principal products in this segment are:

NEXGEN*               Complete Knee Solution

VERSYS*               Hip System

CENTRALIGN*           Precoat Hip Prosthesis orthopaedic implants

ACTIVE LIFE/          ostomy care products	

COLODRESS*
SUR-FIT/
COMBIHESIVE/SECURE*
DUODERM* wound care products
SOURCES AND AVAILABILITY OF RAW MATERIALS
Bristol-Myers Squibb, for the most part, purchases the principal raw materials and supplies used in each industry segment in the open market. Substantially all such materials are obtainable from a number of sources so that the loss of any one source of supply would not have a material adverse effect on the Company.
PATENTS, TRADEMARKS AND LICENSES
The Company owns or is licensed under a number of patents in the United States and foreign countries covering products, principally in the medicines and medical devices segments, and has also developed many brand names and trademarks for products in each industry segment. The Company considers the overall protection of its patent, trademark and license rights to be of material value and acts to protect these rights from infringement. The Company believes that no single patent or license is of material importance in relation to the business as a whole.
6

COMPETITION, DISTRIBUTION AND CUSTOMERS
The markets in which Bristol-Myers Squibb competes are generally broad based, heavily competitive and include many competitors. The principal means of competition utilized to market the products of Bristol-Myers Squibb include quality, service, price and product performance. The pharmaceutical products of the medicines segment and the products of the medical devices segment are promoted on a national and international basis in medical journals and directly to the medical profession. The Company is also utilizing direct-to-consumer advertising for a number of its pharmaceutical products. Most of the other products of Bristol-Myers Squibb are generally advertised and promoted on a national and international basis through the use of television, radio, print media, consumer offers, and window and in-store displays. Bristol-Myers Squibb's products are principally sold to the wholesale and retail trade both nationally and internationally. Certain products of the medicines and medical devices segments are also sold to other drug manufacturers, hospitals and the medical profession. None of the segments is dependent upon a single customer, or a few customers, such that the loss of any one or more would have a material adverse effect on the segment.
RESEARCH AND DEVELOPMENT
Research and development is essential to Bristol-Myers Squibb's businesses, particularly to the Medicines Segment. Management continues to emphasize leadership, innovation and productivity as strategies for success in the Research Institute. Pharmaceutical research and development is carried out by the Bristol-Myers Squibb Pharmaceutical Research Institute which has major facilities in Princeton, Hopewell and New Brunswick, New Jersey; and Wallingford, Connecticut. Pharmaceutical research and development is also carried out at various other facilities in the United States and in Belgium, France, Italy, Japan, and the United Kingdom.
Bristol-Myers Squibb spent $1,577 million in 1998, $1,385 million in 1997 and $1,276 million in 1996 on Company sponsored research and development activities. Pharmaceutical research and development spending, as a percentage of pharmaceutical sales, was 12.4% in 1998 compared to 12.0% in 1997 and 12.3% in 1996.
REGULATION
Most aspects of the Company's business are subject to some degree of government regulation in the countries in which its operations are conducted. The Company's policy is to comply fully with all regulatory requirements applying to its products and operations. For some products, and in some countries, government regulation is significant and, in general, there is a trend to more stringent regulation. The Company devotes significant time, effort and expense addressing the extensive governmental regulatory requirements applicable to its business. Governmental regulatory actions can result in the recall or seizure of products, suspension or revocation of the authority necessary for the production or sale of a product, and other civil and criminal sanctions.
In the United States, the drug, medical device, diagnostic, food and cosmetic industries in which the Company operates have long been subject to regulation by various federal, state and local agencies, primarily as to product manufacture, safety, efficacy, advertising and labeling. Assuring compliance with appropriate laws and regulations requires increasing expenditures of time and resources.
7

In addition, governmental bodies in the United States as well as other countries have expressed concern about costs relating to health care and, in some cases, have focused attention on the pricing of drugs and on appropriate drug utilization. Government regulation in these areas already exists in some countries and may be expanded significantly in the United States and other countries in the future.
While the Company is unable to predict the extent to which its business may be affected by future regulatory developments, it believes that its substantial experience dealing with governmental regulatory requirements and restrictions on its operations throughout the world and its development of new and improved products should enable it to compete effectively within this environment.
EMPLOYEES
Bristol-Myers Squibb employed approximately 54,700 people at December 31, 1998.
DOMESTIC AND FOREIGN OPERATIONS
Reference is made to Note 11 Financial Instruments, and Note 13 Segment Information in the Notes to Consolidated Financial Statements included in
Part II, Item 8 of this Form 10-K Annual Report.
International operations are subject to certain risks which are inherent in conducting business abroad, including possible nationalization or expropriation, price and exchange controls, limitations on foreign participation in local enterprises and other restrictive governmental actions. In addition, changes in the relative value of currencies take place from time to time and their effects may be favorable or unfavorable on Bristol-Myers Squibb's operations. There are currency restrictions relating to repatriation of earnings in certain countries.
Item 2. PROPERTIES.
Bristol-Myers Squibb's world headquarters is located at 345 Park Avenue, New York, New York, where it leases approximately 635,500 square feet of floor space, approximately 301,800 square feet of which is sublet to others. The headquarters for the Company's segments are as follows: Medicines world headquarters is located in Princeton, New Jersey; Beauty Care in Stamford, Connecticut; Nutritionals in Evansville, Indiana; and Medical Devices in Warsaw, Indiana and Skillman, New Jersey.
Bristol-Myers Squibb manufactures products at forty-three major worldwide locations with an aggregate floor space of approximately 12,950,000 square feet. Forty-one facilities are owned by Bristol-Myers Squibb and two are leased. The following table illustrates the segment and geographic location of the Company's significant manufacturing facilities.
8

                                         Beauty                Medical
                              Medicines   Care   Nutritionals  Devices   Total
                              ---------  ------  ------------  -------   -----
United States                        8       2            2         3       15
Europe, Mid East and Africa          9       1            1         1       12
Other Western Hemisphere             7       1            2         -       10
Pacific                              5       -            1         -        6
                                  ----    ----         ----      ----     ----
Total                               29       4            6         4       43
                                  ----    ----         ----      ----     ----	

Portions of these facilities and other facilities owned or leased by Bristol-Myers Squibb in the United States and elsewhere are used for research, administration, storage and distribution. Bristol-Myers Squibb's facilities are well-maintained, adequately insured and in satisfactory condition.
Item 3. LEGAL PROCEEDINGS.
Breast Implant Litigation
Reference is made to Note 16 Contingencies in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K Annual Report.
The Company, together with its subsidiary, Medical Engineering Corporation (MEC), and certain other companies, has been named as a defendant in a number of claims and lawsuits alleging damages for personal injuries of various types resulting from breast implants formerly manufactured by MEC or a related company. Of the more than 90,000 claims or potential claims against the Company in direct lawsuits or through registration in the national class action Revised Settlement Program (described below), most have been dealt with through the Revised Settlement, other settlements, or trial. As of January 1, 1999, the Company's contingent liability in respect of breast implant claims was limited to residual unpaid Revised Settlement Program obligations and to roughly 6,000 remaining opt-outs who have pursued or may pursue their claims in court.
As of December 31, 1998, approximately 15,000 United States and 1,300 foreign breast implant recipients were plaintiffs in lawsuits pending in federal and state courts in the United States and in certain courts in Canada and Australia. These figures include the claims of plaintiffs that are in the process of being settled and/or dismissed. In these lawsuits, about 10,200 U.S. and 400 foreign plaintiffs opted out of the Revised Settlement. The lawsuits of the 4,800 U.S. plaintiffs who did not opt out are expected to be dismissed since these plaintiffs are among the estimated 74,000 women with MEC implants who chose to participate in the nationwide settlement. Of the remaining opt-out plaintiffs, some have claims based upon products that were not manufactured and sold by MEC; many others have claims that are in the process of being settled. Under the terms of the Revised Settlement Program, additional opt-outs are expected to be minimal since the deadline for U.S. class members to opt out has passed. In addition, the Company's remaining obligations under the Revised Settlement Program are limited because most payments to "Current Claimants" (see below) have already been made, no additional "Current Claims" may be filed without court approval, and payments of claims to so-called "Other Registrants" and "Late Registrants" are limited by the terms of the Revised Settlement Program. The Company believes it will be able to address remaining opt-out claims as well as expected remaining obligations under the Revised Settlement Program within its reserves described below.
9

Breast implants were manufactured by several companies, including MEC, which the Company acquired in 1982. Until 1991, MEC manufactured two types of breast implants, polyurethane-covered silicone breast implants and smooth-walled silicone breast implants. In these lawsuits, plaintiffs typically contend that silicone in breast implants causes systemic disease and/or local complications. Some plaintiffs with polyurethane-covered silicone breast implants contend that the polyurethane component causes injury, including cancer. Most of the disease claims involve non-specific complaints such as chronic fatigue, aches and pains and other symptoms that commonly affect the population at large. Many women claim local complications such as rupture, hardening or contracture, and disfigurement or scarring. The plaintiffs typically seek compensatory damages for alleged medical conditions and emotional distress as well as punitive damages. The defendants have based their defense in part on the lack of credible scientific evidence that breast implants cause disease. Many large scale epidemiological studies have found no connection between breast implants and the alleged diseases. Defendants also contend that warnings set forth in the product literature adequately advised physicians and surgeons of the risks of local complications.
The Company is a participant in the national class action Revised Settlement Program approved on December 22, 1995, by the Honorable Sam C. Pointer, Jr., Chief Judge of the United States District Court for the Northern District of Alabama (Lindsey, et al., v. Dow Corning, et al., CV-94-P-11558-S), before whom all federal breast implant cases were consolidated for pretrial purposes. The Revised Settlement arises out of the class action settlement approved by the Court on September 1, 1994. All appeals from the Order approving the Revised Settlement have been dismissed. On January 16, 1996, the Company, Baxter Healthcare Corporation and Baxter International (collectively, Baxter), and Minnesota, Mining and Manufacturing Company (3M) (hereinafter, the Settling Defendants) each paid $125 million into a court-established fund as an initial reserve to pay claims under the Revised Settlement. The Company has made and will make additional contributions to the court-established fund.
The fifteen-year Revised Settlement provides benefits to those U.S. breast implant recipients who have had at least one breast implant manufactured by one of the Settling Defendants (or their related companies). Several kinds of benefits are available for eligible participants with breast implants made by companies affiliated with the Company, Baxter and 3M: (1) for Current Claimants, compensation generally ranging from $10,000 to $50,000 based on disease and disability definitions of the original settlement, plus supplemental benefits of an additional $15,000 to $50,000 for claimants with ruptured implants; (2) for Current Claimants seeking higher benefits and for Other and Late Registrants, compensation ranging from $75,000 to $250,000 based on more stringent disease and disability definitions (Long-Term Benefits); and (3) although the Settling Defendants are not recommending removal of implants absent some specific medical reason, a $3,000 payment for those class members (other than Late Registrants) who seek removal of implants. Current Claimants are eligible for an advance payment of $5,000, and Other Registrants are eligible for an advance payment of $1,000. Other Registrants who receive their $1,000 advance payment by June 15, 1999, are eligible for an additional $2,500 payment if they relinquish their rights to further benefits under the Revised Settlement and provide a full release of their breast implant claims. For Current Claimants, benefits are payable regardless of the number of claimants seeking compensation, and regardless of the total dollar value of approved claims. For Other and Late Registrants, benefits are subject to an aggregate $725 million limit for the three Settling Defendants over the fifteen-year life of the program. The Company's individual aggregate limit for such benefits is $400 million. In the event the dollar value of the claims subject to the limit were to exceed this amount, claimants may be afforded additional opt-out rights but without the right to assert punitive or other statutory multiple damage claims. The Company's obligations to make payments under the Revised Settlement are not affected by the number of class members electing to opt out of the settlement or the number of class members making claims under it except to the extent of the above-mentioned dollar limits.
10

In addition to individual suits and the Lindsey class action, the Company continues as a defendant, together with other defendants, in two other class action proceedings. On April 11, 1996, a class action on behalf of all women in the Canadian province of British Columbia was certified in the provincial court of British Columbia on the single issue of whether silicone gel breast implants are reasonably fit for their intended purpose (Harrington v. Dow Corning Corporation et al., Supreme Court, British Columbia, C954330). Also, there is an action pending on behalf of children allegedly exposed to silicone in utero and through breast milk (Feuer, et al., v. McGhan, et al., U.S.D.C., E.D.N.Y., 93-0146), which has not been certified as a class action, and which names all breast implant manufacturers as defendants and seeks to establish a medical monitoring fund.
The Company entered into several other settlements of breast implant-related claims. In July of 1995, the Company entered into a $20.5 million (U.S. funds) class action settlement with plaintiff representatives in the provinces of Ontario and Quebec. The class includes persons who have or had MEC breast implants and who reside in Ontario and Quebec or who received their MEC implants there. The settlement, which had minimal opt-outs, has been approved by the provincial courts of Ontario and Quebec. In May of 1996, the Company, together with other Settling Defendants in the Revised Settlement Program, entered into a $50 million settlement of claims asserted by certain health insurers based upon payments made or benefits provided by insurers and represented health plans to participating registrants that allegedly involve or relate to silicone gel breast implants. The Company has contributed $22.5 million to the settlement, which extinguishes the potential claims of the majority of the U.S. commercial and non-governmental health care insurer market against both the defendants and settlement class members. In November 1996, the benefits of the Revised Settlement were extended, with certain modifications, to foreign breast implant recipients. Pursuant to this settlement, the Settling Defendants paid (on an equal basis) an aggregate of $25 million into a court-approved settlement fund as an initial reserve for payment of foreign claims.
The Company's insurers were notified of the breast implant claims and the Revised Settlement, and a number reserved their rights or declined coverage. The Company reached settlement with many of these insurers in connection with coverage litigation filed by it in state court in Texas. In 1993, the Company offset its breast implant product liability special charges by $1.0 billion of expected insurance proceeds (recorded as Insurance Recoverable). The Company now believes that it will obtain additional amounts of insurance proceeds above that amount and has recorded an additional Insurance Recoverable in the fourth quarter of 1998 of approximately $100 million.
While there have been a few large judgments, defendants have won more trials than they have lost, and the Company's trial experience has been mostly favorable. The Company has maintained throughout this litigation that breast implants do not cause disease, and medical and scientific data support the Company's position. The Company's view has found support in the trial courts. Courts in several states have ruled to exclude the testimony of plaintiffs' experts concerning a causal link between silicone gel breast implants and systemic illness on the ground that it fails to satisfy standards for reliability under current U.S. Supreme Court guidelines. A national science panel of four independent experts appointed by Judge Pointer has recently issued its unanimous report, based on a comprehensive review of the medical and scientific literature, that there is no evidence linking silicone breast implants and systemic disease. The Company intends to dispose of the claims of remaining opt-outs by continuing to implement its plan to settle cases at values it deems acceptable, and to wage a vigorous defense, including taking cases to trial, of those cases that do not settle at such values.
In the fourth quarter of 1993, the Company recorded a charge of $500 million before taxes ($310 million after taxes) in respect of breast implant cases. The charge consisted of $1.5 billion for potential liabilities and expenses, offset by $1.0 billion of expected insurance proceeds. In the fourth quarters of 1994 and 1995, the Company recorded additional special charges of $750 million before taxes ($488 million after taxes) and $950 million before taxes ($590 million after taxes), respectively, related to breast implant product liability claims. In the fourth quarter of 1998, the Company recorded an additional special charge to earnings in the amount of $800 million before taxes and increased its insurance receivable in the amount of $100 million, resulting in a net charge to earnings of $433 million after taxes in respect of breast implant product liability claims.
11

Infant Formula Matters
The Company, one of its subsidiaries, and others have been defendants in a number of antitrust actions in various states filed on behalf of purported statewide classes of indirect purchasers of infant formula products and by the Attorneys General of Louisiana, Minnesota and Mississippi, alleging a price fixing conspiracy and other violations of state antitrust or deceptive trade practice laws and seeking penalties and other relief. The Company has resolved all of these cases, except for a private action in Louisiana. On November 6, 1997, the court in Louisiana dismissed the plaintiffs' case. The plaintiffs appealed the dismissal to the United States Court of Appeals for the Fifth Circuit. The Company believes that this action is without merit and that its ultimate disposition will not have a material adverse effect on the Company's results of operations, liquidity or consolidated financial position.
Prescription Drug Litigation
As of December 31, 1998, the Company is a defendant in over 100 actions brought against the Company and more than 30 other pharmaceutical manufacturers, drug wholesalers and pharmacy benefit managers in various federal district courts by certain chain drugstores, supermarket chains and independent drugstores, suing individually. These cases, which have been coordinated for pretrial purposes in the United States District Court for the Northern District of Illinois, seek treble damages and injunctive relief on account of an alleged antitrust conspiracy concerning the pricing and marketing of brand name prescription drugs in violation of the Sherman Act and also assert claims of unlawful price discrimination under the Robinson- Patman Act. The Company and a number of other pharmaceutical manufacturers previously settled a class action case brought against it and other pharmaceutical manufacturers and wholesalers that made similar claims under the Sherman Act and has also settled claims brought by some of the in dividual plaintiffs who opted out of the retailer class action. On August 4, 1998, the court denied motions made in the individual retailer cases by manufacturer defendants, including the Company, for partial summary judgment dismissing the plaintiffs' Sherman Act damage claims to the extent based on purchases from wholesalers that occurred more than four years prior to November 20, 1997, when the court permitted those plaintiffs to amend their complaints to name wholesalers as defendants. On December 15, 1998, the United States Court of Appeals for the Seventh Circuit declined to accept an interlocutory appeal from the ruling denying partial summary judgment. A trial in the class action case against the manufacturer and wholesaler defendants who had not settled the class action commenced on September 14, 1998, and ended on November 30, 1998, when the court granted the defendants' motion for a directed verdict. The class plaintiffs have appealed from that ruling. Cases brought by retail pharmacies in state court under state law alleging similar grounds are pending in Alabama, California and Mississippi. Settlements of cases brought as class actions in state court on behalf of consumers in those states have received final approval in Arizona, the District of Columbia, Florida, Kansas, Maine, Michigan, Minnesota, New York, North Carolina and Wisconsin; settlements of such cases are subject to final court approval in California and Tennessee. A purported class action on behalf of consumers in Alabama and eight other states that was brought in state court in Alabama against the Company and other pharmaceutical manufacturers remains pending; on December 29, 1998, activity in that case was stayed pending resolution of certain appeals, including an appeal in the Alabama retailer case, by the Supreme Court of Alabama. On June 16, 1998, a purported class action on behalf of consumers in Tennessee and 12 other states was filed in state court in Tennessee against the Company and other pharmaceutical manufacturers. On July 6, 1998, a class consisting of consumers in Tennessee and the other states was conditionally certified, without notice to the defendants. By order dated November 13, 1998, the court in that action denied the defendants' motion to vacate the conditional class certification and also stayed all further proceedings pending further order of the court. On March 9, 1999, a purported class action on behalf of consumers in North Dakota was brought in state court in North Dakota against the Company and other pharmaceutical manufacturers. In the fourth quarter of 1998, the Company recorded a special charge to earnings in the amount of $100 million before taxes ($62 million after taxes) in respect of prescription drug litigation.
12

Environmental Matters
The Company, together with others, is a party to, or otherwise involved in, a number of proceedings brought by the Environmental Protection Agency or comparable state agencies under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund) or comparable state laws directed at the cleanup of hazardous waste sites. While it is not possible to predict with certainty the outcome of these cases, the Company believes that the ultimate disposition of these matters will not have a material adverse effect on the Company's results of operations, liquidity or consolidated financial position.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
13

PART IA

EXECUTIVE OFFICERS OF THE REGISTRANT
 The following are the executive corporate officers and the other executive officers of the Registrant:

                                  Positions and Offices Presently
 Name                     Age     Held with the Registrant
------                    ---     -------------------------------

Charles A. Heimbold, Jr.   65     Chairman of the Board, Chief Executive
                                  Officer and Director

Hamed M. Adbou, Ph.D.      58     President, Technical Operations, Worldwide
                                  Medicines Group

Harrison M. Bains, Jr.     55     Treasurer and Vice President, Corporate Staff

Alice C. Brennan           46     Secretary, Head of the Office of Corporate
                                  Conduct and Vice President, Corporate Staff

Peter R. Dolan             43     Senior Vice President, Strategy and
                                  Organizational Effectiveness, Corporate Staff

Donald J. Hayden, Jr.      43     President, Worldwide Medicines Group and
                                  Senior Vice President, Corporate Staff

George P. Kooluris         54     Senior Vice President, Corporate Development,
                                  Corporate Staff

Richard J. Lane            48     President, U.S. Medicines and Global
                                  Marketing

John L. McGoldrick         58     President, Medical Devices Group and General
                                  Counsel and Senior Vice President,
                                  Corporate Staff

Michael F. Mee             56     Chief Financial Officer and Senior Vice
                                  President, Corporate Staff

Christine A. Poon          46     President, International Medicines

Peter S. Ringrose, Ph.D.   53     President, Bristol-Myers Squibb
                                  Pharmaceutical Research Institute

Stephen I. Sadove          47     President, Worldwide Beauty Care and
                                  Nutritionals and Senior Vice President,
                                  Corporate Staff

Frederick S. Schiff        51     Controller and Vice President, Financial
                                  Operations, Corporate Staff	

14

John L. Skule              55     Senior Vice President, Corporate and
                                  Environmental Affairs, Corporate Staff

Charles G. Tharp, Ph.D.    47     Senior Vice President, Human Resources,
                                  Corporate Staff

Kenneth E. Weg             60     Executive Vice President and Director	

Persons who hold titles as elected corporate officers of the Registrant were last elected or reelected to the office held at the general election of officers by the Registrant's Board of Directors on May 5, 1998. Officers of the Registrant serve in such capacity at the pleasure of the Board of Directors of the Registrant.
CHARLES A. HEIMBOLD, JR. - From 1992 to 1996, President of the Registrant. Mr. Heimbold has been a director of the Registrant since 1989, the Chief Executive Officer of the Registrant since 1994 and Chairman of the Board of Directors of the Registrant since 1995.
HAMED M. ABDOU, Ph.D. - From 1993 to 1995, Vice President QA/QC, Technical Operations PG, a division of the Registrant, and from 1995 to 1997, Senior Vice President, North America and Intercontinental Manufacturing, Technical Operations PG, a division of the Registrant. Dr. Abdou has been President, Technical Operations, Worldwide Medicines Group, a division of the Registrant since 1997.
HARRISON M. BAINS, JR. - Mr. Bains has been Treasurer and Vice President, Corporate Staff of the Registrant since 1988.
ALICE C. BRENNAN - Ms. Brennan has been Secretary and Vice President, Corporate Staff of the Registrant since 1994 and Head of the Office of Corporate Conduct since 1997.
PETER R. DOLAN - From 1993 to 1995, President, Bristol-Myers Products, a division of the Registrant, from 1995 to 1996, President, Mead Johnson Nutritional Group, a division of the Registrant, from 1996 to 1997, President, Nutritionals and Medical Devices Group, a division of the Registrant and from 1997 to 1998, President, Pharmaceutical Group - Europe, a division of the Registrant. Mr. Dolan has been Senior Vice President, Strategy and Organizational Effectiveness, Corporate Staff of the Registrant since 1998.
DONALD J. HAYDEN, JR. - From 1993 to 1994, Vice President & General Manager, Bristol-Myers Oncology Division, Specialty Pharmaceuticals, a division of the Registrant, in 1994, Vice President & General Manager, Bristol-Myers Oncology Division, a division of the Registrant, from 1994 to 1995, Vice President & General Manager, Bristol-Myers Oncology/Immunology Division, a division of the Registrant, in 1995, President Oncology & Immunology, a division of the Registrant, from 1995 to 1997, Senior Vice President, Worldwide Franchise Management and Business Development, a division of the Registrant, in 1997, President, Intercontinental Pharmaceutical Group and Senior Vice President, Worldwide Business Development, Worldwide Medicines Group, a division of the Registrant and from 1997 to 1998, President, Intercontinental, Worldwide Medicines Group, a division of the Registrant. Mr. Hayden has been President, Worldwide Medicines Group, a division of the Registrant, and Senior Vice President, Corporate Staff since 1998.
15

GEORGE P. KOOLURIS - Mr. Kooluris has been Senior Vice President, Corporate Development, Corporate Staff of the Registrant since 1994.
RICHARD J. LANE - From 1993 to 1994, President, Human Health - U.S., Merck Co., Inc., in 1994, President, Human Health N.A., Merck & Co., Inc., a pharmaceutical company, from 1994 to 1995, consultant Schering-Plough Corporation, a pharmaceutical company, in 1995, Senior Vice President Marketing Operations, Sandoz Pharmaceuticals, a pharmaceutical, nutritionals and chemicals company, from 1995 to 1997, Senior Vice President Marketing, U.S. Pharmaceuticals, a division of the Registrant, in 1997, President, U.S. Primary Care, a division of the Registrant and from 1997 to 1998, President, U.S. Pharmaceuticals, a division of the Registrant. Mr. Lane has been President, U.S. Medicines and Global Marketing, a division of the Registrant since 1998.
JOHN L. McGOLDRICK - From 1974 to 1994, Partner, McCarter & English, 1995 to 1997, General Counsel and Senior Vice President, Corporate Staff of the Registrant and from 1997 to 1998, General Counsel and Senior Vice President, Law and Strategic Planning, Corporate Staff of the Registrant. Mr. McGoldrick has been General Counsel and Senior Vice President, Corporate Staff of the Registrant and President, Medical Devices Group, a division of the Registrant since 1998.
MICHAEL F. MEE - Mr. Mee has been Chief Financial Officer and Senior Vice President, Corporate Staff of the Registrant since 1994.
CHRISTINE A. POON - From 1994 to 1995, President & General Manager - Canada, Pharmaceutical Group - Intercontinental, a division of the Registrant, in 1995, Vice President OPS-Planning - Intercontinental & President, Canada, a division of the Registrant, from 1995 to 1996, Vice President, Northern Region Latin America, Intercontinental, a division of the Registrant, from 1996 to 1997, Senior Vice President, Intercontinental Northern Region & Canada, a division of the Registrant, in 1997, President, Latin America and Canada, Worldwide Pharmaceutical Group, a division of the Registrant and from 1997 to 1998, President, Medical Devices Group, a division of the Registrant. Ms. Poon has been President, International Medicines, a division of the Registrant since 1998.
PETER S. RINGROSE, Ph.D. - From 1992 to 1994, Senior Vice President, Medicinal Research & Development, Europe and from 1994 to 1996, Senior Vice President, Worldwide Discovery and Medicinal Research & Development, Europe of Pfizer Inc., a health care company. Dr. Ringrose has been President, Bristol-Myers Squibb Pharmaceutical Research Institute, a division of the Registrant since 1997.
STEPHEN I. SADOVE - From 1991 to 1994, President, Clairol Incorporated, a division of the Registrant, from 1994 to 1996, President, Worldwide Clairol, a division of the Registrant, and from 1996 to 1997, President, Worldwide Beauty Care, a division of the Registrant. Mr. Sadove has been President, Worldwide Beauty Care and Nutritionals, a division of the Registrant since 1997 and Senior Vice President, Corporate Staff of the Registrant since 1998.
16

FREDERICK S. SCHIFF - From 1990 to 1997, Controller and Vice President, Corporate Staff of the Registrant. Mr. Schiff has been Controller and Vice President, Financial Operations, Corporate Staff of the Registrant since 1997.
JOHN L. SKULE - From 1993 to 1997, Vice President, Public Affairs, Corporate Staff of the Registrant. Mr. Skule has been Senior Vice President, Corporate and Environmental Affairs, Corporate Staff of the Registrant since 1998.
CHARLES G. THARP, Ph.D. - Dr. Tharp has been Senior Vice President, Human Resources, Corporate Staff of the Registrant since 1993.
KENNETH E. WEG - From 1993 to 1996, President, Bristol-Myers Squibb Pharmaceutical Group, a division of the Registrant, and from 1997 to 1998, President, Worldwide Medicines Group, a division of the Registrant. Mr. Weg has been director and Executive Vice President of the Registrant since 1995 and a member of the Office of the Chairman since 1998.
In addition to the positions and offices heretofore listed, all of the foregoing executive corporate officers and other executive officers of the Registrant are directors and/or officers of one or more affiliates of the Registrant, with the exception of Mr. Skule and Dr. Tharp.
17

PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS.
MARKET PRICES
Bristol-Myers Squibb common and preferred stocks are traded on the New York Stock Exchange and the Pacific Exchange, Inc. (symbol: BMY). A quarterly summary of the high and low market prices is presented below:

                                 1998                          1997
                       -------------------------     -------------------------
                          High            Low            High           Low
                       ----------    -----------     -----------    ----------
Common:

First Quarter           $54  1/4      $44  29/32       $34   5/8     $26   5/8
Second Quarter           59  7/32      49  19/32        42   7/8      28   5/8
Third Quarter            62  29/32     48  15/16        44  5/16      35   1/2
Fourth Quarter           66  29/32     46  1/8          49  3/32      40	

Preferred:
The Company's preferred stock traded at a high of $906 and a low of $906 during the first quarter of 1998. During the second, third and fourth quarters of 1998, and all four quarters of 1997, there were no trades of the Company's preferred stock.
HOLDERS OF COMMON STOCK
The approximate number of record holders of common stock at December 31, 1998 was 121,840.
The number of record holders is based upon the actual number of holders registered on the books of Bristol-Myers Squibb at such date and does not include holders of shares in "street names" or persons, partnerships, associations, corporations or other entities identified in security position listings maintained by depository trust companies.
18

DIVIDENDS
Dividend payments per share in 1998 and 1997 were:

                              Common                         Preferred
                     ------------------------       -------------------------
                        1998          1997              1998           1997
                     ---------    -----------       ----------      ---------
First Quarter        $  .19 1/2      $ .19              $ .50          $ .50
Second Quarter          .19 1/2        .19                .50            .50
Third Quarter           .19 1/2        .19                .50            .50
Fourth Quarter          .19 1/2        .19                .50            .50
                     ----------   -----------       ----------      ---------
Year                 $  .78          $ .76              $2.00          $2.00
                     ==========   ===========       ==========      =========	

In December 1998, the Board of Directors of the Company declared a quarterly dividend of $.21 1/2 per share on the common stock of the Company, payable on February 1, 1999 to shareholders of record as of January 8, 1999, and will be paid on a pre-split basis. The 1999 indicated annual payment of $.86 per share represents the twenty-seventh consecutive year that the Company has raised the dividend on its common stock.
19

Item 6. SELECTED FINANCIAL DATA.
FIVE-YEAR FINANCIAL SUMMARY
 OPERATING RESULTS
 (in millions, except per share amounts)

                               1998      1997      1996      1995      1994
                           --------  --------  --------  --------  --------
Net Sales                   $18,284   $16,701   $15,065   $13,767   $11,984
                           --------  --------  --------  --------  --------
Expenses:
Cost of products sold         4,856     4,464     3,965     3,637     3,122
Marketing, selling and
  administrative              4,418     4,173     3,925     3,670     3,166
Advertising and product
  promotion                   2,312     2,241     1,946     1,646     1,367
Research and development      1,577     1,385     1,276     1,199     1,108
Other(*)                        853       (44)      (60)    1,213       666
                           --------  --------  --------  --------  --------
                             14,016    12,219    11,052    11,365     9,429
                           --------  --------  --------  --------  --------

Earnings Before Income
   Taxes(*)                   4,268     4,482     4,013     2,402     2,555

Provision for income taxes    1,127     1,277     1,163       590       713
                           --------  --------  --------  --------  --------

Net Earnings(*)             $ 3,141   $ 3,205   $ 2,850   $ 1,812   $ 1,842
                           ========  ========  ========  ========  ========

Dividends paid on common
  and preferred stock       $ 1,551   $ 1,515   $ 1,507   $ 1,495   $ 1,485
Earnings per
  common share - Basic(*)      1.58      1.61      1.42       .89       .91
Earnings per
  common share - Diluted(*)    1.55      1.57      1.40       .89       .90

Dividends per common share      .78       .76       .75       .74       .73	

(*) Includes a gain on the sale of a business of $201 million before taxes, $125 million after taxes, in 1998; and $225 million before taxes, $140 million after taxes, in 1997. Includes a special charge for prescription drug pricing litigation of $100 million before taxes, $62 million after taxes, or $.03 per common share, basic and diluted, in 1998. Includes a special charge for pending and future product liability claims of $700 million before taxes, $433 million after taxes, or $.22 per common share, basic, and $.21 per common share, diluted, in 1998; $950 million before taxes, $590 million after taxes, or $.29 per common share, basic and diluted in 1995; and $750 million before taxes, $488 million after taxes, or $.24 per common share, basic and diluted in 1994. Includes a provision for restructuring of $201 million before taxes, $125 million after taxes, in 1998; $225 million before taxes, $140 million after taxes, in 1997; and $310 million before taxes, $198 million after taxes, in 1995.
20

Item 6. SELECTED FINANCIAL DATA. (Con't.)
FIVE-YEAR FINANCIAL SUMMARY
 FINANCIAL POSITION AT DECEMBER 31
 (in millions, except per share amounts)

                               1998      1997      1996       1995       1994
                           --------  --------  --------   --------   --------

Current assets              $ 8,782   $ 7,736   $ 7,528    $ 7,018    $ 6,710
Property, plant and
   equipment                  4,429     4,156     3,964      3,760      3,666

Total assets                 16,272    14,977    14,685     13,929     12,910

Current liabilities           5,791     5,032     5,050      4,806      4,274
Long-term debt                1,364     1,279       966        635        644
Total liabilities             8,696     7,758     8,115      8,107      7,206

Stockholders' equity        $ 7,576   $ 7,219   $ 6,570    $ 5,822    $ 5,704

Average common shares
  outstanding - Basic         1,987     1,992     2,007      2,024      2,035

Average common shares
  outstanding - Diluted       2,031     2,042     2,035      2,032      2,039	

Reference is made to Note 4 Acquisitions and Divestitures, Note 8 Property, Plant and Equipment and Note 16 Contingencies, appearing in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K Annual Report.
21

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Summary
In 1998, Bristol-Myers Squibb achieved record levels of sales, with all four of the Company's business segments reporting sales increases, excluding the effects of foreign exchange and divestitures. Worldwide sales grew to $18.3 billion, a 9% increase over 1997. Domestic sales, which represent 61% of worldwide sales, increased 15% to $11.1 billion, while international sales increased 2% to $7.2 billion. Sales growth resulted from a 10% increase due to volume and a 2% increase from changes in selling prices. Exchange rate fluctuations had an unfavorable effect of 3% on worldwide sales and 7% on international sales, primarily due to Asian and Latin American currencies.
In 1998, the Company's most important products, most of which experienced double-digit sales increases on a worldwide basis, made significant contributions to the Company's sales growth. Two products, PRAVACHOL* and TAXOL*(R) (paclitaxel), exceeded $1 billion in sales for 1998. An additional seven products exceeded over a half billion dollars in annual sales. By the end of 1998, Bristol-Myers Squibb had 64 product lines with more than $50 million in annual sales, 36 of which had more than $100 million in annual sales.
Earnings before income taxes, excluding the 1998 special charge, increased 13% to $5.1 billion in 1998. Net earnings, on this basis, increased 13% to $3.6 billion; basic and diluted earnings per share increased 14% to $1.83 and $1.79, respectively. Net earnings and diluted earnings per share, excluding special charges, have both increased at a compound annual growth rate of 10% over the past five years.
Bristol-Myers Squibb's financial position remains strong. At December 31, 1998, the Company held $2.5 billion in cash, time deposits and marketable securities. Cash provided by operating activities reached an all time high of $4.1 billion. Returns to shareholders included dividend distributions of $1.6 billion and treasury stock repurchases of $1.6 billion. Dividends per common share were $.78 in 1998, increasing from $.76 per share paid in 1997. The Company's payout ratio was 43%, 47% and 53% of net income in 1998, 1997 and 1996, respectively, excluding the 1998 special charge. In December 1998, the Company announced another dividend increase, the 27th consecutive year that dividends have increased. The 1999 indicated annual payment is $.86 per share, a 10% increase over 1998. Bristol-Myers Squibb's strong financial position is evidenced further by its triple-A credit rating from both Moody's and Standard & Poor's, making Bristol-Myers Squibb one of only eight U.S. industrial companies with this distinction.
Bristol-Myers Squibb's priorities over the past five years have been focused on growth, productivity and a dynamic operating culture. In 1997, the Company established a long-term strategic objective to be the number one company in earnings per share growth year after year within its competitive universe. To help achieve this objective, the Company is making strategic investments behind a number of high priority projects. During the year, progress was made in a number of areas in these projects, including:
22

* All goals for pharmaceutical research and development were exceeded. Eleven major regulatory approvals were obtained and nine major dossiers were filed during the year.
* PRAVACHOL*, a cholesterol-lowering agent, was shown to provide additional cardiovascular benefits in addition to the established reduction in deaths from coronary heart disease and the risk of heart attacks.
* TAXOL*, the Company's leading anti-cancer agent, received a new indication in combination with cisplatin for first-line ovarian cancer.
* GLUCOPHAGE, the leading branded oral medication for treatment of non-insulin-dependent (type 2) diabetes, was shown to have an excellent therapeutic efficacy profile in the treatment of type 2 diabetes and is the leader in the U.S. Oral Anti-diabetic market.
* HERBAL ESSENCES* became number two in the U.S. shampoo/conditioner category after only three years on the market.
* The Company's productivity for growth program contributed more than $600 million in incremental benefits.
Total equity market capitalization was $133 billion as of December 31, 1998, a 42% increase over last year. 1997 equity market capitalization was $94 billion, an increase of 72% over 1996. Total return to stockholders, share price appreciation together with reinvested dividends, was 43.0% for 1998, 77.0% for 1997 and 32.1% for 1996. The 1998 return compares favorably to the 28.6% return of the Standard & Poor's 500 Index.
On December 1, 1998, the Company's Board of Directors declared a two-for-one stock split of the common stock of the Company, effective February 1999. This is the second stock split in the past two years. The Board of Directors also recommended that an amendment be considered for stockholder approval at the annual meeting of stockholders to increase the number of authorized shares of common stock from 2.25 billion to 4.5 billion. All share and per share information presented herein has been adjusted for the effect of the stock split.
Net Sales and Earnings
Worldwide sales increased 9% in 1998 to $18.3 billion, compared with increases of 11% and 9% in 1997 and 1996, respectively. The consolidated sales growth resulted from a 10% increase due to volume, a 3% decrease due to foreign exchange rate fluctuations and a 2% increase due to changes in selling prices. In 1997, the 11% increase in sales reflected a 14% increase due to volume, a 3% decrease due to foreign exchange rate fluctuations and no changes overall from pricing activity. In 1996, the 9% increase in sales reflected an 11% increase due to volume, a 2% decrease due to foreign exchange rate fluctuations and no changes overall from pricing activity. Domestic sales increased 15% in 1998, 14% in 1997 and 10% in 1996, while international sales increased 2% in 1998 (9% excluding foreign exchange), 7% in 1997 (15% excluding foreign exchange) and 9% in 1996 (13% excluding foreign exchange). In general, the businesses of the Company's industry segments are not seasonal.
As described in Notes 2 and 16 to the financial statements, the Company has determined the final cost of its breast implant product liability (related to a previously discontinued business of a subsidiary) and the cost of litigation for prescription drug pricing cases. Accordingly, in the fourth quarter of 1998, the Company recorded a special charge of $800 million before taxes, $495 million after taxes, or $.24 per diluted share, to augment the reserve for breast implant liability and for the prescription drug pricing litigation, offset by expected insurance recoveries. The breast implant component of the charge is $700 million before taxes ($800 million of liability offset by insurance receivables of $100 million), and the prescription drug pricing component is $100 million before taxes. As a result of the special charge, 1998 net earnings were $3,141 million, basic earnings per share were $1.58 and diluted earnings per share were $1.55.
23

Net earnings, excluding the special charge, were $3,636 million, a 13% increase over the prior year. Basic earnings per share were $1.83 and diluted earnings per share were $1.79, both increasing 14% over 1997. In 1997, net earnings of $3,205 million increased 12% from $2,850 million in 1996. Basic and diluted earnings per share of $1.61 and $1.57, respectively, increased 13% and 12%, from $1.42 and $1.40, respectively, in 1996. Net earnings margins, excluding the special charge, increased to 19.9% in 1998 from 19.2% in 1997 and 18.9% in 1996.
The effective income tax rate on earnings before income taxes was 28.3% in 1998, excluding the special charge, compared to 28.5% and 29.0% in 1997 and 1996, respectively. The effective income tax rate has decreased since 1996 due to increased income in lower tax rate jurisdictions.
As described in Note 4 to the financial statements, in 1998 the Company completed the acquisition of Redmond Products, Inc., a leading hair care manufacturer in the United States. The Company also, in 1998, acquired Phytoervas, a line of premium retail hair care products in Brazil, and Dong-A Biotech Co., Ltd., a marketer and distributor of pharmaceutical products in South Korea. In 1997, the Company acquired Abeefe S.A., Peru's largest pharmaceutical manufacturer and marketer. The Company also, in 1997, acquired CHOCO MILK*, Mexico's leading milk-based nutritional supplement, and SAL DE UVAS PICOT*, a leading effervescent antacid product in Mexico. In 1996, the Company acquired Pharmavit, one of Hungary's leading manufacturers of over-the-counter medicines, nutritional products and generic pharmaceuticals. The Company also, in 1996, acquired Argentia S.A., one of Argentina's largest manufacturers and marketers of ethical pharmaceuticals, and completed the acquisition of Oncology Therapeutics Network, a specialty distributor of anti-cancer medicines and related products.
As described in Note 4 to the financial statements, in the first quarter of 1998, the Company divested its BAN brand of anti-perspirants and deodorants. In the second quarter of 1998, the Company divested A/S GEA, a Denmark-based generic drug business, and Hexachimie, a specialty chemical manufacturer based in France. In the fourth quarter of 1997, the Company divested Linvatec Corporation, its arthroscopy and surgical powered instrument business. These divestitures resulted in gains before taxes of $201 million in 1998 and $225 million in 1997.
The Company recorded restructuring charges of $201 million in 1998 and $225 million in 1997. These restructuring charges consist primarily of asset write-downs and employee-related costs related to the consolidation and closure of plants and facilities.
Expenses
Total costs and expenses as a percentage of sales, excluding the special charge, were 72.3% in 1998 compared with 73.2% in 1997 and 73.4% in 1996.
As a percentage of sales, cost of products sold remained relatively unchanged at 26.6% in 1998 compared to 26.7% in 1997. In 1997, cost of products sold as a percentage of sales increased to 26.7% from 26.3% in 1996, principally due to incremental lower margin Oncology Therapeutics Network sales, partially offset by increased sales of higher margin promoted pharmaceutical products.
Following a 15% increase in advertising and promotion expenses in 1997 due to product launches and direct-to-consumer campaigns for our high priority pharmaceutical products, 1998 expenses increased 3% to $2,312 million from $2,241 million.
24

Marketing, selling and administrative expenses, as a percentage of sales, decreased to 24.2% in 1998 from 25.0% in 1997 and 26.1% in 1996. This decreasing trend is a direct result of the Company's productivity programs partially offset by increases in pharmaceutical sales force personnel.
The Company's investment in research and development totaled $1,577 million in 1998, an increase of 14% over 1997, and as a percentage of sales, increased to 8.6% in 1998 from 8.3% in 1997. This spending level reflects the Company's commitment to research over a broad range of therapeutic areas and to clinical development in support of new products. Over the past 10 years, research and development expenses have increased at a compound annual growth rate of 9%. In 1998, research and development spending dedicated to the research and development of pharmaceutical products increased 16%, and was 12.4% of pharmaceutical sales compared to 12.0% and 12.3% in 1997 and 1996, respectively. In 1998, the Company initiated filings with the U.S. Food and Drug Administration (FDA) for ORZEL, the first oral agent for colorectal cancer in the U.S., and TEQUIN, a broad-spectrum oral quinolone antibiotic. Additional filings are expected in 1999 for omapatrilat, a novel antihypertensive. During 1998, 1997 and 1996, the Company entered into a number of research alliances, licensing agreements and biotechnology collaborations. These agreements are providing important new products, early-stage compounds for further development and new processes that will help the Company screen for new drugs more effectively.
Business Segments
All four of the Company's business segments - Medicines, Nutritionals, Medical Devices and Beauty Care - reported sales increases, excluding foreign exchange and divestitures, during the year.
Sales in the Medicines Segment (Pharmaceuticals and Consumer Medicines), which is the Company's largest segment at 69% of the total Company, increased 12% to $12,573 million in 1998. Sales growth resulted from a 13% increase due to volume and a 2% increase from selling prices, offset by a 3% decrease due to the effect of foreign exchange rate fluctuations. Domestic sales increased 20% and international sales increased 8%, excluding foreign exchange, primarily due to volume growth.
Sales of PRAVACHOL*, the Company's largest-selling product, were $1.6 billion, an increase of 14%. Domestic sales increased 17% to $1,022 million. In November 1998, results from the landmark LIPID trial were published in the New England Journal of Medicine showing that PRAVACHOL* improved total mortality, improved results for patients with unstable angina and reduced total hospitalizations. In July 1998, additional findings of the Cholesterol and Recurrent Events (CARE) Trial were published in the Journal of the American College of Cardiology, demonstrating cardiovascular protection in women, the subgroup studied, as well as for a broad range of patients. In June 1998, the FDA cleared enhanced drug interaction labeling for PRAVACHOL*, for reduced potential to interact with some commonly prescribed medications. In March 1998, the FDA cleared PRAVACHOL* for use in reducing the risk of stroke in patients who have had a heart attack and have normal cholesterol levels. PRAVACHOL* is the only drug of its type indicated to reduce the risk of a heart attack in patients with and without established coronary heart disease. Sales of MONOPRIL*, a second generation angiotensin converting enzyme (ACE) inhibitor with once-a-day dosing, increased 16% to $380 million, with strong growth in both domestic and international markets and strong acceptance among managed care organizations in the United States. Products from the Bristol-Myers Squibb and Sanofi S.A. joint venture, AVAPRO and PLAVIX, were launched in the fourth quarter of 1997 and first quarter of 1998, respectively. PLAVIX, a platelet aggregation inhibitor for the reduction of stroke, heart attack and vascular death in atherosclerotic patients, reached sales of $144 million for the year, and AVAPRO, an angiotensin II receptor blocker for the treatment of hypertension, had sales of $120 million. Sales of cardiovascular drugs, the largest product group in the Medicines segment, increased 11% to $3,210 million. Due to the loss of patent exclusivity in several European countries in the first quarter of 1997, and in the United States in February 1996, sales of captopril, an ACE inhibitor sold primarily under the trademark CAPOTEN*, declined 20% to $636 million. Excluding CAPOTEN* sales, cardiovascular drug sales increased 22%.
25

Sales of anti-cancer drugs increased 21% to $2,925 million. Sales of TAXOL* increased 28% to $1,206 million. In September 1998, the FDA approved Genentech Inc.'s product, Herceptin(R), as a first-line therapy in combination with TAXOL* for treatment of patients with metastatic breast cancer. Also in September, the European Community approved a TAXOL* indication for non-small cell lung cancer. In May 1998, a U.S.-based cooperative group study, sponsored under the Bristol-Myers Squibb Cooperative Research and Development Agreement with the National Cancer Institute, showed that by adding TAXOL* to a regimen with other commonly used chemotherapy drugs, the risk of death for women with early-stage breast cancer was reduced by 26%. This study, which enrolled over 3,000 women, was the first to show such a significant survival benefit in early-stage breast cancer in over 20 years. In April 1998, TAXOL*, in combination with cisplatin, was approved by the FDA for first line treatment of ovarian cancer. Sales of PARAPLATIN*, which is used in combination therapy for the treatment of ovarian cancer, increased 20% to $525 million. Sales by the Oncology Therapeutics Network (OTN) were $657 million.
Anti-infective drug sales were $2,412 million, an increase of 8% over the prior year. Sales of ZERIT*, an antiretroviral agent, increased 38% to $551 million, and sales of VIDEX* grew 7% to $162 million. ZERIT* is the most commonly prescribed thymidine nucleoside reverse transcriptase inhibitor in HIV therapy in the United States. In June 1998, the Company announced a large phase III study to evaluate the safety and efficacy of once-daily dosing of VIDEX*, as Bristol-Myers Squibb seeks to develop a more convenient dosing regimen for HIV patients. Sales of CEFZIL*, an oral cephalosporin used in the treatment of respiratory infections and sinusitis, and MAXIPIME*, a fourth generation injectable cephalosporin, also contributed to the growth of anti-infectives.
Sales of central nervous system drugs increased 15% to $1,099 million, due to the strong growth of BUSPAR*, the Company's novel anti-anxiety agent, and SERZONE*, an antidepressant. Sales of BUSPAR* increased 20% to $531 million, while sales of SERZONE* increased 39% to $257 million.
GLUCOPHAGE continued to experience strong growth, with sales increasing 49% to $861 million. In September 1998, results of the United Kingdom Prospective Diabetes Study demonstrated the excellent therapeutic efficacy profile of GLUCOPHAGE in the treatment of type 2 diabetes.
Sales of EXCEDRIN* increased 17% to $241 million following clearance by the FDA in January 1998 to market EXCEDRIN* Migraine, the first and only non-prescription medication approved for relief of migraine pain.
In 1997, Medicines Segment sales increased 14% over 1996 levels. Increases in sales of PRAVACHOL*, TAXOL*, PARAPLATIN*, ZERIT*, MONOPRIL*, BUSPAR*, CEFZIL*, GLUCOPHAGE, SERZONE*, VIDEX* and volume growth of EFFERALGAN* and ASPIRINE UPSA* from the UPSA Group were partially offset by decreases in sales of CAPOTEN*.
26

The margin on earnings before taxes decreased slightly to 27.8% in 1998 from 27.9% in 1997, as increases, as a percentage of sales, in research and development expenditures and sales force expenditures were offset by decreases in advertising and promotional spending and general administrative expenses, In 1997, the margin on earnings before taxes decreased to 27.9% from 28.0% in 1996 due to increased investment in advertising and promotion expenses in support of high priority products and lower margin sales for OTN.
Sales in the Medical Devices Segment, excluding the December 1997 divestiture of Zimmer's arthroscopy and surgical powered instrument business, increased 7% over prior year levels to $1,647 million, reflecting a 10% increase due to volume, a 3% decrease due the effect of foreign exchange and no effect from selling prices. Domestic sales increased 9% and international sales increased 6% (11% excluding the effect of foreign exchange). Including the divestiture, Medical Device sales decreased 9%. The Company's ConvaTec division is the worldwide market share leader in ostomy and advanced wound care products. Sales of ostomy and wound care products increased 5% and 9%, respectively, excluding foreign exchange. Worldwide sales of knee prosthetic joint implants increased 1% and hip replacement sales decreased 2%, excluding the effect of foreign exchange.
In 1997, worldwide sales of Medical Devices decreased 3%, an increase of 1% excluding foreign exchange.
The margin on earnings before taxes in the Medical Devices Segment improved to 20.5% in 1998, from 19.5% in 1997 due to decreases, as a percentage of sales, in other marketing and general administrative expenses, partially offset by increases in cost of products sold due to higher costs for products sold under a distribution agreement with the acquirer of Linvatec. The margin on earnings before taxes in the Medical Devices Segment decreased to 19.5% in 1997 from 22.5% in 1996, due to incremental manufacturing costs in connection with recently introduced products.
Sales in the Nutritionals Segment decreased 2% to $1,759 million, reflecting a 2% increase due to volume, a 6% decrease due to the effect of foreign exchange rate fluctuations primarily in Asia and a 2% increase due to changes in selling prices. International sales decreased 7% (an increase of 7% excluding the effect of foreign exchange), and domestic sales increased 2%. Mead Johnson continues to be the leader in the worldwide and U.S. infant formula markets. Total infant formula sales decreased 1% to $1,203 million (an increase of 2% excluding foreign exchange). Sales of ENFAMIL*, the Company's largest selling infant formula, decreased 3% to $649 million worldwide (a decrease of 1% excluding foreign exchange). Gains were recorded for NUTRAMIGEN* and LACTO FREE* specialty infant formulas. BOOST*, an adult nutritional beverage, and CHOCO MILK*, a milk-based nutritional supplement acquired in July 1997, also contributed to sales growth.
In 1997, worldwide sales of Nutritionals increased 6% from 1996 levels, primarily due to growth of NUTRAMIGEN*, LACTO FREE* and PROSOBEE* specialty infant formulas, and adult consumer nutritionals.
The margin on earnings before taxes improved to 21.4% in 1998 from 20.6% in 1997, primarily due to a decrease, as a percentage of sales, in cost of products sold, resulting from improved manufacturing efficiencies and productivity programs. The margin on earnings before taxes in the Nutritionals Segment decreased to 20.6% in 1997 from 21.1% in 1996.
27

Sales in the Beauty Care Segment increased 22% in 1998 to $2,305 million, reflecting a 22% increase due to volume, a 3% increase due to pricing and a 3% decrease due to foreign exchange rate fluctuations. Excluding the effect of foreign exchange, international sales increased 26% over 1997, while domestic sales increased 25%. The Company's Clairol division continues to be the number one hair products company in the United States. Sales of the Company's hair care products were especially strong, increasing 49% in 1998, primarily due to sales of the HERBAL ESSENCES* complete line of shampoos, conditioners, styling aids and body wash, which increased 60% to $561 million. HERBAL ESSENCES* is the number two brand in the total shampoo and conditioner market in the U.S. after only three years on the market, and number three in body wash after less than two years on the market. The Redmond AUSSIE* brand, acquired in January 1998, has added more than $100 million in sales for the year. DAILY DEFENSE* and VITAL NUTRIENTS*, both launched in September 1997, contributed $82 million and $34 million, respectively, in sales for the year. Haircoloring product sales increased 6%, benefiting from the continued success of HYDRIENCE*, NATURAL INSTINCTS*, salon haircolorings and the launch of REVITALIQUE*, a new premium permanent haircolor.
In 1997, sales in the Beauty Care Segment increased 14% from 1996 levels, primarily due to increased sales of hair care products, led by HERBAL ESSENCES*.
The margin on earnings before taxes in 1998 improved to 15.7% from 14.8% in 1997 and 14.4% in 1996, primarily due to higher volumes and manufacturing efficiencies due to productivity programs, partially offset by investment spending behind new product introductions.
Geographic Areas
Bristol-Myers Squibb products are available in virtually every country in the world; its largest markets are the United States, France, Japan, Germany and Canada.
Sales in the U.S., net of inter-area sales, increased 15% in 1998. Sales in the Medicines and Beauty Care Segments, comprised 68% and 15%, respectively, of the region's sales. Products with strong growth in the region included GLUCOPHAGE, TAXOL*, PRAVACHOL*, HERBAL ESSENCES*, BUSPAR*, PARAPLATIN*, and initial sales of PLAVIX and AUSSIE* hair care products. The margin on earnings before taxes increased to 26.2% in 1998 from 24.5% in 1997 primarily due to decreases, as a percentage of sales, in cost of products sold, advertising and general administrative expenses. In 1997, sales in the U.S. increased 14%, net of inter-area sales, primarily due to anti-cancer and anti-infective drugs from the Medicines Segment, specialty infant formulas from the Nutritionals Segment and hair care products from the Beauty Care Segment. The margin on earnings before taxes decreased to 24.5% in 1997 from 26.0% in 1996 primarily due to increases, as a percentage of sales, in cost of products sold and advertising and promotion expenses.
Sales in Europe, Mid-East and Africa, net of inter-area sales, increased 4% (6% excluding foreign exchange). Medicines Segment comprise nearly 77% of sales in the region. Products with strong growth in the region included TAXOL*, ZERIT*, PRAVACHOL*, HERBAL ESSENCES* and initial sales of AVAPRO. Increases in sales of these products were partially offset by decreases in sales of CAPOTEN* of $104 million due to the loss of exclusivity in several European countries in early 1997. The margin on earnings before taxes decreased to 23.4% in 1998 from 23.8% in 1997 primarily due to increases, as a percentage of sales, in promotional expenses. In 1997, sales in Europe, Mid-East and Africa, net of inter-area sales, increased 2% (12% excluding foreign exchange), due to sales growth of products from the Medicines Segment including anti-cancer, antiretroviral and analgesic products, and the introductions of HERBAL ESSENCES* and HYDRIENCE* from the Beauty Care segment. These increases were partially offset by decreases in sales of CAPOTEN* due to loss of exclusivity. The margin on earnings before taxes increased to 23.8% in 1997 from 21.9% in 1996 due to manufacturing efficiencies as a result of the Company's productivity programs.
28

Sales in Other Western Hemisphere countries, net of inter-area sales, increased 11% in 1998 (20% excluding foreign exchange). Medicines and Beauty Care Segments comprised nearly 62% and 18%, respectively, of the region's sales. Products with strong growth included HERBAL ESSENCES* and CHOCO MILK*, due to their recent introductions into the region. The margin on earnings before taxes decreased to 12.8% in 1998 from 14.2% in 1997 reflecting increases, as a percentage of sales, in cost of products sold. In 1997, sales in Other Western Hemisphere countries, net of inter-area sales, increased 25% (26% excluding foreign exchange), due to increased sales of cardiovascular, anti-cancer and anti-infective drugs from the Medicines Segment, introductory sales of HYDRIENCE* and HERBAL ESSENCES* from the Beauty Care Segment, and sales from the acquisitions of CHOCO MILK* and SAL DE UVAS PICOT*. The margin on earnings before taxes increased to 14.2% in 1997 from 11.1% in 1996, reflecting improved gross margins due to manufacturing efficiencies.
Sales in the Pacific region increased 5% in 1998, net of inter-area sales and excluding the effect of foreign exchange. Including foreign exchange, sales decreased 11% primarily due to currency fluctuations in Japan, the Philippines, Thailand and Australia and economic downturns in the region. Medicines and Nutritionals Segments comprised 45% and 22%, respectively, of the region's sales. Increases in TAXOL* and HERBAL ESSENCES* (launched in the region in 1997) were offset in part by decreases in infant formulas and CAPOTEN*, which lost patent exclusivity in Japan in 1997. As a result of economic downturns and unfavorable fluctuations in exchange rates, earnings before taxes in the Pacific region were minimal in 1998. In 1997, sales in the Pacific region, net of inter-area sales, increased 5% (13% excluding foreign exchange), as a result of increased sales from pharmaceuticals, skin care products, infant formulas and the launch of HERBAL ESSENCES*. The margin on earnings before taxes decreased to 3.2% in 1997 from 4.4% in 1996, primarily as a result of increases, as a percentage of sales, in cost of products sold and sales force expenses.
Financial Instruments
Cash and cash equivalents, time deposits and marketable securities totaled $2.5 billion at December 31, 1998, compared to $1.8 billion and $2.2 billion at December 31, 1997 and 1996, respectively. Working capital was $3.0 billion at December 31, 1998, compared to $2.7 billion and $2.5 billion at December 31, 1997 and 1996, respectively. Cash and cash equivalents, time deposits and marketable securities, and the conversion of other working capital items are expected to fund near-term operations of the Company.
The Company is exposed to market risk, including changes in currency exchange rates and interest rates. To reduce these risks, the Company enters into certain derivative financial instruments where available on a cost-effective basis to hedge its underlying economic exposure. These instruments also are managed on a consolidated basis to efficiently net exposures and thus take advantage of any natural offsets.
It is the Company's policy to hedge certain underlying economic exposures to reduce foreign exchange and interest rate risk. Derivative financial instruments are not used for trading purposes. Gains and losses on hedging transactions are offset by gains and losses on the underlying exposures being hedged.
29

Foreign exchange option contracts and, to a lesser extent, forward contracts are used to hedge anticipated transactions. The Company's primary foreign currency exposures in relation to the U.S. dollar are the French franc, Deutsche mark and Japanese yen.
The table below summarizes the Company's outstanding foreign exchange option contracts as of December 31, 1998. The fair value of option contracts, which will change over time, is estimated based on forward currency rates and other relevant market factors. The fair value of option contracts should be viewed in relation to the fair value of the underlying hedged transactions and the overall reduction in exposure to adverse fluctuations in foreign currency exchange rates.

Dollars in Millions

                     Weighted
                      Average      Notional     Carrying     Fair
                   Strike Price      Amount       Value      Value     Maturity
                   ------------    --------     --------     -----     --------

Option Contracts Purchased

Right to Sell:
 French franc          FF 5.60        $342          $6          $ 6        1999
 Deutsche mark         DM 1.69         388           7            6        1999
 Other Currencies      Various         312           9            6        1999

Other Contracts        Various         265           5           13        1999
                                    ------         ---          ---
                                    $1,307         $27          $31
                                    ======         ===          ===	

At December 31, 1997, the Company held right to sell option contracts with an aggregate notional amount, carrying value and fair value of $1,035 million, $17 million and $48 million, respectively. These contracts primarily related to option contracts with the right to sell French francs and Deutsche marks. The Company also held right to buy option contracts, primarily to buy Japanese yen for U.S. dollars and Japanese yen for Deutsche marks, with an aggregate notional amount, carrying value and fair value of $244 million, $5 million and $7 million, respectively.
The Company maintains cash and cash equivalents, time deposits and marketable securities with various financial institutions. These financial institutions are located primarily in the U.S. and Europe, and Company policy is designed to limit exposure to any one financial institution.
Recently Issued Accounting Standard
On June 15, 1998, the Financial Accounting Standards Board (FASB) issued SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (FAS 133), which becomes effective for financial statements beginning January 1, 2000. FAS 133 requires that companies recognize all derivatives as either assets or liabilities on the balance sheet and measure these instruments at fair value. The Company is currently evaluating this statement and its impact on the Company's existing accounting policies and financial reporting disclosures.
30

Year 2000
The Company has reviewed its information systems for Year 2000 compliance. The Year 2000 problem arises because many computer systems use only two digits to represent the year. These programs may not process dates beyond 1999, which may cause miscalculations or system failures.
The Company has a comprehensive compliance program to assess the Year 2000 problem in the processing of data in the Company's information technology (IT) and non-IT systems, including manufacturing, and research and development systems. With regard to IT systems, this program has been implemented, and the assessment as well as the required corrective actions and testing are substantially complete. With regard to the critical manufacturing, and research and development systems, the assessment has been completed, with corrective actions and testing to be substantially completed by mid-year 1999.
In connection with this compliance program, the Company also has asked critically important vendors, customers, suppliers, governmental regulatory authorities and financial institutions, whose incomplete or untimely resolution of the Year 2000 problem could potentially have a significant impact on the Company's operations, to assess their Year 2000 readiness. This assessment has been substantially completed.
Contingency plans are being prepared, where necessary, to minimize any significant exposures from the failures of these third parties to be Year 2000 compliant. These plans will be substantially completed by mid-year 1999, and include development of backup procedures, identification of alternate suppliers, and possible increases in inventory levels.
The Company does not expect the Year 2000 problem, as well as the cost of the compliance program, to have a material impact on the Company's results of operations, financial condition or cash flows. However, there can be no absolute assurance that third parties will convert their systems in a timely manner and in a way that is compatible with the Company's systems.
Euro Conversion
On January 1, 1999, certain members of the European Union established fixed conversion rates between their existing currencies and the European Union's common currency, known as the Euro. The transition period for the introduction of the Euro will be between January 1, 1999, and January 1, 2002. It is planned that by July 1, 2002, the participating countries will withdraw all currencies and use the Euro exclusively.
The Company has committed resources to conduct assessments and to take corrective actions to ensure it is prepared for the introduction of the Euro. The Company is currently evaluating methods to address the many areas involved with the introduction of the Euro, including information management, finance, legal and tax. This review includes the conversion of information technology, business and financial systems, evaluating currency risk and the effect on the Company's financial instruments as well as the impact on the pricing and the distribution of the Company's products.
The Company believes the effect of the introduction of the Euro, as well as any related cost of conversion, will not have a material impact on the Company's results of operations, financial condition and cash flows.
31

Financial Position
Cash and cash equivalents, time deposits and marketable securities at December 31, 1998 were denominated primarily in U.S. dollar instruments with near-term maturities. The average interest yield on cash and cash equivalents was 4.7% at December 31, 1998 while interest yields on time deposits and marketable securities averaged 4.5% at December 31, 1998.
Short-term borrowings and long-term debt at December 31, 1998 are denominated primarily in U.S. dollars; however, a subsidiary of the Company had $167 million of commercial paper outstanding at December 31, 1998. This commercial paper has original maturities not exceeding 270 days. $116 million is denominated in ECU's (Euros) and $51 million is denominated in U.S. dollars. Also included is Japanese yen long-term debt of $284 million.
During 1998, the Company entered into two credit facilities, aggregating $500 million, with a syndicate of lenders as support for its commercial paper program. The credit facilities consist of a $250 million, 364-day credit facility which may be renewed annually with the consent of the lenders for an additional 364-day period and a $250 million, 5-year credit facility, extendible at each anniversary date with the consent of the lenders. There were no borrowings outstanding under the credit facilities at December 31, 1998. In addition, the Company has unused short-term lines of credit with foreign banks of $494 million.
Disclosures related to short-term borrowings and long-term debt are included in the notes to the financial statements.
Internally generated cash provided by operations was $4.1 billion in 1998, $2.5 billion in 1997 and $2.6 billion in 1996. Cash provided by operations continued to be the Company's primary source of funds to finance operating needs and expenditures for new plants and equipment. As part of the Company's ongoing commitment to improve plant efficiency and maintain superior research facilities, the Company has invested over $2.1 billion in capital expansion over the past three years.
Cash provided by operations also was used to pay dividends of over $4.5 billion over the past three years, to fund acquisitions at a cost of $663 million over the past three years, and to finance the share repurchase program. The Company's share repurchase program authorizes the purchase of common stock from time to time in the open market or through private transactions as market conditions permit. During 1998, the Company purchased 30.6 million shares of common stock at a cost of $1.6 billion, bringing the total shares acquired since the program's inception to 277 million. During the past three years, the Company has repurchased 101 million shares at a cost of $3.6 billion.
Employment levels at December 1998 increased to 54,700 from 53,600 at December 1997, with increases primarily in pharmaceutical sales force and research and development personnel.
Return on Stockholders' Equity continued to improve over the last three years and was 49.2% in 1998, excluding the special charge, 46.5% in 1997 and 46.0% in 1996.
32

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
BRISTOL-MYERS SQUIBB COMPANY
CONSOLIDATED STATEMENT OF EARNINGS, COMPREHENSIVE INCOME and
RETAINED EARNINGS
 (in millions, except per share amounts)
Year Ended December 31,
EARNINGS ---------------------------

                                                      1998      1997      1996
                                                   -------   -------   -------
Net Sales                                          $18,284   $16,701   $15,065
                                                   -------   -------   -------
Expenses:
Cost of products sold                                4,856     4,464     3,965
Marketing, selling and administrative                4,418     4,173     3,925
Advertising and product promotion                    2,312     2,241     1,946
Research and development                             1,577     1,385     1,276
Special charge                                         800         -         -
Provision for restructuring                            201       225         -
Gain on sale of a business                            (201)     (225)        -
Other                                                   53       (44)      (60)
                                                   -------   -------   -------
                                                    14,016    12,219    11,052
                                                   -------   -------   -------

Earnings Before Income Taxes                         4,268     4,482     4,013

Provision for income taxes                           1,127     1,277     1,163
                                                   -------   -------   -------
Net Earnings                                       $ 3,141   $ 3,205   $ 2,850
                                                   =======   =======   =======

Earnings Per Common Share:
Basic                                                $1.58     $1.61     $1.42
Diluted                                              $1.55     $1.57     $1.40

Average Common Shares Outstanding:
Basic                                                1,987     1,992     2,007
Diluted                                              2,031     2,042     2,035	

COMPREHENSIVE INCOME

Net Earnings                                        $3,141    $3,205    $2,850

Other Comprehensive Income:
     Foreign currency translation                      (86)     (195)      (38)
     Tax effect                                         (3)       23         4
                                                    ------    ------    ------

Comprehensive Income                                $3,052    $3,033    $2,816
                                                    ======    ======    ======	

The accompanying notes are an integral part of these financial statements.
33

BRISTOL-MYERS SQUIBB COMPANY
CONSOLIDATED STATEMENT OF EARNINGS, COMPREHENSIVE INCOME and
RETAINED EARNINGS
 (in millions, except per share amounts)

                                                      Year Ended December 31,
                                                    --------------------------
                                                      1998      1997      1996
                                                    ------    ------    ------
RETAINED EARNINGS
-----------------

Retained Earnings, January 1                       $10,950   $ 9,260   $ 7,917

Net earnings                                         3,141     3,205     2,850
                                                   -------   -------   -------
                                                    14,091    12,465    10,767
Less dividends                                       1,551     1,515     1,507
                                                   -------   -------   -------
Retained Earnings, December 31                     $12,540   $10,950   $ 9,260
                                                   =======   =======   =======	

The accompanying notes are an integral part of these financial statements.
34

BRISTOL-MYERS SQUIBB COMPANY
CONSOLIDATED BALANCE SHEET
ASSETS
 (dollars in millions)

                                                           December 31,
                                                   ---------------------------
                                                      1998      1997      1996
                                                   -------    -------  -------
ASSETS
------
Current Assets:
Cash and cash equivalents                          $ 2,244   $ 1,456   $ 1,681
Time deposits and marketable securities                285       338       504
Receivables, net of allowances                       3,190     2,973     2,651
Inventories                                          1,873     1,799     1,669
Prepaid expenses                                     1,190     1,170     1,023
                                                   -------   -------   -------
  Total Current Assets                               8,782     7,736     7,528

Property, Plant and Equipment                        4,429     4,156     3,964

Insurance Recoverable                                  523       619       853

Excess of cost over net tangible assets
  received in business acquisitions                  1,587     1,625     1,508

Other Assets                                           951       841       832
                                                   -------   -------   -------
    Total Assets                                   $16,272   $14,977   $14,685
                                                   =======   =======   =======	

The accompanying notes are an integral part of these financial statements.
35

BRISTOL-MYERS SQUIBB COMPANY
CONSOLIDATED BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
 (dollars in millions)

                                                       December 31,
                                               ---------------------------
                                                 1998      1997      1996
                                               -------   -------   -------
LIABILITIES
-----------
Current Liabilities:
Short-term borrowings                          $   482   $   543   $   513
Accounts payable                                 1,380     1,017     1,064
Accrued expenses                                 2,302     1,939     1,962
Product liability                                  877       865       800
U.S. and foreign income taxes payable              750       668       711
                                               -------   -------   -------
  Total Current Liabilities                      5,791     5,032     5,050

Other Liabilities                                1,541     1,447     2,099

Long-Term Debt                                   1,364     1,279       966
                                               -------   -------   -------
  Total Liabilities                              8,696     7,758     8,115
                                               -------   -------   -------

STOCKHOLDERS' EQUITY
--------------------
Preferred stock, $2 convertible series:
  Authorized 10 million shares; issued and
  outstanding 11,684 in 1998, 12,936 in 1997
  and 15,245 in 1996, liquidation value of
  $50 per share                                      -         -         -

Common stock, par value of $.10 per share:
  Authorized 2.25 billion shares; issued
  2,188,316,808 in 1998, 1,083,253,703 in
  1997 and 1,082,496,016 in 1996                   219       108       108
Capital in excess of par value of stock          1,075       544       382
Cumulative translation adjustments                (622)     (533)     (361)
Retained earnings                               12,540    10,950     9,260
                                               -------   -------   -------
                                                13,212    11,069     9,389
Less cost of treasury stock - 199,550,532
  common shares in 1998, 90,069,383 in
  1997 and 81,806,550 in 1996                    5,636     3,850     2,819
                                               -------   -------   -------

  Total Stockholders' Equity                     7,576     7,219     6,570
                                               -------   -------   -------
  Total Liabilities and Stockholders' Equity   $16,272   $14,977   $14,685
                                               =======   =======   =======	

The accompanying notes are an integral part of these financial statements.
36

BRISTOL-MYERS SQUIBB COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
 (dollars in millions)

                                                  Year Ended December 31,
                                                --------------------------
                                                  1998       1997     1996
                                                ------     ------   ------
Cash Flows From Operating Activities:
Net earnings                                    $3,141     $3,205    $2,850
Depreciation and amortization                      625        591       519
Special charge                                     800          -         -
Provision for restructuring                        201        225         -
Gain on sale of a business                        (201)      (225)        -
Other operating items                               (1)        33       (52)
Receivables                                       (253)      (479)     (262)
Inventories                                       (139)      (288)     (227)
Accounts payable                                   376          2       177
Accrued expenses                                  (134)      (181)       42
Income taxes                                       414        318       250
Product liability                                 (715)      (795)     (514)
Insurance recoverable                              196        234       106
Other assets and liabilities                      (190)      (164)     (248)
                                                ------     ------    ------
  Net Cash Provided by Operating Activities      4,120      2,476     2,641
                                                ------     ------    ------
Cash Flows From Investing Activities:
Proceeds from sales of time deposits and
  marketable securities                            309        530       406
Purchases of time deposits and marketable
  securities                                      (256)      (363)     (379)
Additions to fixed assets                         (788)      (767)     (601)
Proceeds from sales of businesses                  417        370       213
Business acquisitions                              (93)      (254)     (316)
Other, net                                          65        (48)      (40)
                                                ------     ------    ------
  Net Cash Used in Investing Activities           (346)      (532)     (717)
                                                ------     ------    ------
Cash Flows From Financing Activities:
Short-term borrowings                              (81)        81       (78)
Long-term debt                                      73        328       346
Issuances of common stock under stock plans        140        117       206
Purchases of treasury stock                     (1,561)    (1,162)     (852)
Dividends paid                                  (1,551)    (1,515)   (1,507)
                                                ------     ------    ------
  Net Cash Used in Financing Activities         (2,980)    (2,151)   (1,885)
                                                ------     ------    ------
Effect of Exchange Rates on Cash                    (6)       (18)       (3)
                                                ------     ------    ------
Increase/(Decrease) in Cash and
   Cash Equivalents                                788       (225)       36
Cash and Cash Equivalents at Beginning
  of Year                                        1,456      1,681     1,645
                                                ------     ------    ------
Cash and Cash Equivalents at End of Year        $2,244     $1,456    $1,681
                                                ======     ======    ======	

The accompanying notes are an integral part of these financial statements.
. 37

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)
Note 1 ACCOUNTING POLICIES
Basis of Consolidation - The consolidated financial statements include the accounts of Bristol-Myers Squibb Company and all of its subsidiaries.
Cash and Cash Equivalents - Cash and cash equivalents primarily include securities with a maturity of three months or less at the time of purchase, recorded at cost, which approximates market.
Time Deposits and Marketable Securities - Time deposits and marketable securities are available for sale and are recorded at fair value, which approximates cost.
Inventory Valuation - Inventories are generally stated at average cost, not in excess of market.
Capital Assets and Depreciation - Expenditures for additions, renewals and betterments are capitalized at cost. Depreciation is generally computed by the straight-line method based on the estimated useful lives of the related assets.
Excess of Cost over Net Tangible Assets - The excess of cost over net tangible assets received in business acquisitions is being amortized on a straight-line basis over periods not exceeding 40 years.
Earnings Per Share - Basic earnings per common share are computed using the weighted average number of shares outstanding during the year. Diluted earnings per common share are computed using the weighted average number of shares outstanding during the year, plus the incremental shares outstanding assuming the exercise of dilutive stock options.
Note 2 SPECIAL CHARGE
As described in Note 16, the Company has determined the final cost of its breast implant product liability (related to a previously discontinued business of a subsidiary) and the cost of litigation for prescription drug pricing cases. Accordingly, in the fourth quarter of 1998, the Company recorded a special charge of $800 million before taxes, $495 million after taxes, or $.24 per diluted share, to augment the reserve for breast implant liability and for the prescription drug pricing litigation, offset by expected insurance recoveries. The breast implant component of the charge is $700 million before taxes ($800 million of liability offset by insurance receivables of $100 million), and the prescription drug pricing component is $100 million before taxes.
38

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)
Note 3 RESTRUCTURING
The Company recorded a restructuring charge of $201 million in 1998 and $225 million in 1997. These restructuring charges consist primarily of asset write-downs and employee-related costs related to the consolidation and closure of plants and facilities. The restructuring reserve at December 31, 1998 was approximately $150 million.
Note 4 ACQUISITIONS AND DIVESTITURES
In January 1998, the Company acquired Redmond Products, Inc., a leading hair care manufacturer in the United States.
In March 1998, the Company divested its BAN brand of anti-perspirants and deodorants, and in June 1998, the Company divested A/S GEA, a Denmark-based generic drug business, and Hexachimie, a specialty chemical manufacturer based in France, resulting in a combined pretax gain of $201 million.
In May 1998, the Company acquired Phytoervas, a line of premium retail shampoos and conditioners in Brazil.
In December 1998, the Company acquired Dong-A-Biotech Co., Ltd., a marketer and distributor of pharmaceutical products in South Korea.
In 1997, the Company completed the sale of Linvatec Corporation, its arthroscopy and surgical powered instrument business, resulting in a pretax gain of $225 million. The Company acquired Abeefe S.A., Peru's largest pharmaceutical manufacturer and marketer of a broad range of prescription and nonprescription anti-infective, respiratory, anti-inflammatory and dermatological products. The Company also acquired CHOCO MILK*, Mexico's leading milk-based nutritional supplement, and SAL DE UVAS PICOT*, a leading effervescent antacid product in Mexico.
In 1996, the Company acquired Pharmavit Gyogyszer-es Elelmiszeripari Reszvenytarsasag, one of Hungary's leading manufacturers of over-the-counter medicines, nutritional products and generic pharmaceuticals. The Company also acquired Argentia S.A., one of Argentina's largest manufacturers and marketers of ethical pharmaceuticals and completed the acquisition of Oncology Therapeutics Network, a specialty distributor of anti-cancer medicines and related products.
39

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)
Note 5 OTHER INCOME AND EXPENSES

                                   Year Ended December 31,
                                 --------------------------
                                    1998     1997     1996
                                 -------  -------  -------
Interest income                    $  87    $ 106    $  95
Interest expense                    (154)    (118)     (78)
Other - net                           14       56       43
                                 -------  -------  -------
                                   $ (53)   $  44    $  60
                                 =======  =======  =======	

Cash payments for interest were $157 million, $110 million and $76 million in 1998, 1997 and 1996, respectively.
Note 6 PROVISION FOR INCOME TAXES
The components of earnings before income taxes were:

                                        Year Ended December 31,
                                   --------------------------------
                                       1998        1997        1996
                                   --------    --------    --------
U.S.                                 $2,623      $2,858      $2,332
Non-U.S.                              1,645       1,624       1,681
                                   --------    --------    --------
                                     $4,268      $4,482      $4,013
                                   ========    ========    ========	

The provision for income taxes consisted of:

                                        Year Ended December 31,
                                   --------------------------------
                                       1998        1997        1996
                                   --------    --------    --------
Current:
  U.S.                                 $827        $633        $462
  Non-U.S.                              346         471         442
                                   --------    --------    --------
                                      1,173       1,104         904
                                   --------    --------    --------	

40

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)

                                         Year Ended December 31,
                                   --------------------------------
                                       1998        1997        1996
                                   --------    --------    --------
Deferred:
  U.S.                                  (64)        220         232
  Non-U.S.                               18         (47)         27
                                   --------    --------    --------
                                        (46)        173         259
                                   --------    --------    --------
                                     $1,127      $1,277      $1,163
                                   ========    ========    ========	

Income taxes paid during the year were $654 million, $898 million and $861 million in 1998, 1997 and 1996, respectively.
The Company's provision for income taxes in 1998, 1997 and 1996 was different from the amount computed by applying the statutory United States Federal income tax rate to earnings before income taxes, as a result of the following:

                                              % of Earnings
                                           Before Income Taxes
                                   --------------------------------
                                       1998        1997        1996
                                   --------    --------    --------

U.S. statutory rate                    35.0%       35.0%       35.0%
Effect of operations in Puerto Rico    (2.5)       (2.9)       (3.4)
Foreign                                (4.4)       (2.6)       (2.1)
Special charge                          (.6)          -           -
State and local taxes                    .6          .6          .6
Other                                  (1.7)       (1.6)       (1.1)
                                   --------    --------    --------
                                       26.4%       28.5%       29.0%
                                   ========    ========    ========	

Prepaid taxes at December 31, 1998, 1997 and 1996 were $809 million, $818 million and $757 million, respectively. The deferred income tax liability, included in Other Liabilities, at December 31, 1998, 1997 and 1996 was $277 million, $352 million and $124 million, respectively.
31

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)
The components of prepaid and deferred income taxes consisted of:

                                                 December 31,
                                   ------------------------------------
                                       1998           1997         1996
                                   --------       --------     --------
Product liability                      $248           $154         $383
Postretirement and pension benefits     195            191          129
Restructuring                            55             77           88
Depreciation                           (278)          (278)        (245)
Other                                   312            322          278
                                   --------       --------     --------
                                       $532           $466         $633
                                   ========       ========     ========	

The Company has settled its United States Federal income tax returns with the Internal Revenue Service through 1991.
United States Federal income taxes have not been provided on substantially all of the unremitted earnings of non-U.S. subsidiaries, since it is management's practice and intent to reinvest such earnings in the operations of these subsidiaries. The total amount of the net unremitted earnings of non-U.S. subsidiaries was approximately $3.2 billion at December 31, 1998.

Note 7  INVENTORIES
-------------------
                                            December 31,
                                   ---------------------------
                                      1998      1997      1996
                                   -------   -------   -------
Finished goods                      $1,209   $ 1,153     $ 994
Work in process                        236       197       223
Raw and packaging materials            428       449       452
                                   -------   -------   -------
                                    $1,873    $1,799    $1,669
                                   =======   =======   =======	

42

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)
Note 8 PROPERTY, PLANT AND EQUIPMENT

                                                   December 31,
                                       -----------------------------------
                                           1998         1997          1996
                                       --------     --------      --------
Land                                     $  176       $  180        $  160
Buildings                                 2,875        2,631         2,427
Machinery, equipment and fixtures         3,885        3,646         3,626
Construction in progress                    572          544           433
                                       --------     --------      --------
                                          7,508        7,001         6,646
Less accumulated depreciation             3,079        2,845         2,682
                                       --------     --------      --------
                                         $4,429       $4,156        $3,964
                                       ========     ========      ========	

Note 9 SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Included in short-term borrowings were amounts due to banks, primarily foreign banks, of $272 million, $524 million and $440 million at December 31, 1998, 1997 and 1996, respectively, and current installments of long-term debt of $43 million, $19 million and $73 million at December 31, 1998, 1997, and 1996, respectively. Also included in short-term borrowings at December 31, 1998, was $167 million of commercial paper outstanding issued by a subsidiary of the Company. This commercial paper has original maturities not exceeding 270 days and is denominated in ECUs (Euros) and U.S. dollars. The average interest rate on short-term borrowings was 8.84% and on current installments of long-term debt was 6.56% at December 31, 1998.
During 1998, the Company entered into two credit facilities, aggregating $500 million, with a syndicate of lenders as support for its commercial paper program. The credit facilities consist of a $250 million, 364-day credit facility, which may be renewed annually with the consent of the lenders for an additional 364-day period and a $250 million, 5-year credit facility, extendible at each anniversary date with the consent of the lenders. There were no borrowings outstanding under the credit facilities at December 31, 1998. In addition, the Company has unused short-term lines of credit with foreign banks of $494 million.
43

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)
The components of long-term debt were:

                                                       December 31,
                                               --------------------------
                                                 1998      1997      1996
                                               ------   -------   -------
6.80% Debentures, due in 2026                  $  345    $  344       344
7.15% Debentures, due in 2023                     344       343       343
6.875% Debentures, due in 2097                    296       296         -
1.73% & 2.14% Yen Notes, due in 2003 & 2005       109         -         -
Various Rate Yen Term Loans, due in 2003           71        70        76
3.51% Deutsche Mark Interest on Yen Principal
  Term Loan, due in 2005                           50        49        53
5.75% Industrial Revenue Bonds, due in 2024        34        34        34
5.00% Yen Term Loan, due in 2000                   29        29        31
Various Rate Term Loans, due in 1999                -        26         -
2.83% Yen Term Loan, due in 2002                   25        24        27
Capitalized Leases                                 29        26        19
Other, 5.69% to 10.25%,due in varying
  amounts through 2014                             32        38        39
                                               ------   -------   -------
                                               $1,364    $1,279      $966
                                               ======   =======   =======	

Note 10 STOCKHOLDERS' EQUITY
On December 1, 1998, the Company's Board of Directors authorized a two-for-one split of its common stock, effective February 1999. Per common share amounts in the accompanying consolidated financial statements give effect to the stock split. The Board of Directors also recommended that an amendment be considered for stockholder approval at the annual meeting of stockholders to increase the number of authorized shares of common stock from 2.25 billion shares to 4.5 billion shares.
44

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)
Changes in capital shares and capital in excess of par value of stock were:

                                                                 Capital in
                                                                Excess of Par
                                   Shares of Common Stock      Value of Stock
                               ----------------------------      (dollars in
                                     Issued       Treasury         millions)
                               -------------    -----------    --------------
Balance, December 31, 1995       540,185,639     34,953,311          $ 375
Effect of two-for-one
  stock split                    540,185,639     34,953,311            (54)
Issued pursuant to stock plans,
  options and rights                 221,032     (6,623,272)           (25)
Conversions of preferred stock        31,960              -              -
Purchases                                  -     18,523,200              -
Other                              1,871,746              -             86
                               -------------    -----------         ------
Balance, December 31, 1996     1,082,496,016     81,806,550            382
Issued pursuant to stock plans
 and options                         738,151     (8,514,867)           162
Conversions of preferred stock        19,536              -              -
Purchases                                  -     16,777,700              -
                               -------------    -----------         ------
Balance, December 31, 1997     1,083,253,703     90,069,383            544
Effect of two-for-one
  stock split                  1,083,253,703     90,069,383           (108)
Issued pursuant to stock plans
 and options                      16,931,302    (11,189,998)           700
Conversions of preferred stock        21,230              -              -
Purchases                                  -     30,601,764              -
Other                              4,856,870              -            (61)
                               -------------    -----------         ------
Balance, December 31, 1998     2,188,316,808    199,550,532         $1,075
                               =============    ===========         ======	

Each share of the Company's preferred stock is convertible into 16.96 shares of common stock and is callable at the Company's option. The reductions in the number of issued shares of preferred stock in 1998, 1997 and 1996 were due to conversions into shares of common stock.
Dividends per common share were $.78 in 1998, $.76 in 1997 and $.75 in 1996.
45

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)
Stock Compensation Plans
Under the Company's 1997 Stock Incentive Plan, officers, directors and key employees may be granted options to purchase the Company's common stock at no less than 100% of the market price on the date the option is granted. Options generally become exercisable in installments of 25% per year on each of the first through the fourth anniversaries of the grant date and have a maximum term of 10 years. Additionally, the plan provides for the granting of stock appreciation rights whereby the grantee may surrender exercisable options and receive common stock and/or cash measured by the excess of the market price of the common stock over the option exercise price. The plan also provides for the granting of performance-based stock options to certain key executives.
Under the terms of the 1997 Stock Incentive Plan, as amended, additional shares are authorized in the amount of 0.9% of the outstanding shares per year through 2002. The plan incorporates the Company's long-term performance awards.
In addition, the 1997 Stock Incentive Plan provides for the granting of up to 20,000,000 shares of common stock to key employees, subject to restrictions as to continuous employment except in the case of death or normal retirement. Restrictions generally expire over a five-year period from date of grant. Compensation expense is recognized over the restricted period. At December 31, 1998, a total of 2,536,364 restricted shares were outstanding under the plan.
Under the TeamShare Stock Option Plan, all full-time employees, excluding key executives, meeting certain years of service requirements are granted options to purchase the Company's common stock at the market price on the date the options are granted. The Company has authorized 60,000,000 shares for issuance under the plan. As of December 31, 1998, a total of 59,482,400 options were granted under the plan with generally 800 options granted to each eligible employee. Individual grants generally become exercisable on or after the third anniversary of the grant date. As of December 31, 1998, 18,841,100 shares have been exercised under the plan.
The Company applies Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for its plans. Accordingly, no compensation expense has been recognized for its stock-based compensation plans other than for restricted stock and performance-based awards. Had compensation cost for the Company's other stock option plans been determined based upon the fair value at the grant date for awards under these plans consistent with the methodology prescribed under Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, the Company's net income and earnings per share would have been reduced by approximately $136 million, or $.07 per common share, basic and diluted, in 1998, $85 million, or $.04 per common share, basic and diluted, in 1997 and $55 million, or $.03 per common share, basic and diluted, in 1996. The fair value of the options granted during 1998, 1997 and 1996 was estimated as $11.80 per common share, $6.41 per common share and $4.26 per common share, respectively, on the date of grant using the Black-Scholes option-pricing model with the following assumptions:
46

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)

                                            1998      1997      1996
                                         -------   -------   -------

Dividend yield                               3.1%      4.3%      4.3%
Volatility                                  18.2%     19.3%     17.0%
Risk-free interest rate                      6.3%      6.5%      6.5%
Assumed forfeiture rate                      3.0%      3.0%      3.0%
Expected life (years)                        7         7         7

Stock option transactions were:
                                                                  Weighted
                                   Shares of Common Stock          Average
                                 --------------------------      Exercise Price
                                   Available         Under        of Shares
                                   for Option         Plan        Under Plan
                                 -------------   -----------    --------------
Balance, December 31, 1995          11,813,104    32,254,538          $59.76
Effect of two-for-one stock split   11,813,104    32,254,538               -
Authorized                           9,094,182             -               -
Granted                            (16,179,560)   16,179,560           46.92
Exercised                                    -    (8,863,078)          27.62
Lapsed                               1,788,528    (1,796,826)          33.00
                                 -------------   -----------
Balance, December 31, 1996          18,329,358    70,028,732           34.27
Authorized                           9,006,205             -               -
Granted                            (11,347,801)   11,347,801           65.77
Exercised                                    -   (12,787,811)          30.34
Lapsed                               2,284,788    (2,287,820)          45.63
                                 -------------   -----------
Balance, December 31, 1997          18,272,550    66,300,902           40.08
Effect of two-for-one stock split   18,272,550    66,300,902               -
Authorized                          17,877,318             -               -
Granted                            (35,498,350)   35,498,350           51.40
Exercised                                    -   (36,697,942)          16.30
Lapsed                               2,382,746    (2,382,746)          34.27
                                 -------------   -----------
Balance, December 31, 1998          21,306,814   129,019,466          $29.47
                                 =============   ===========	

47

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)
The following table summarizes information concerning currently outstanding and exercisable options:

                          Options Outstanding           Options Exercisable
                 -----------------------------------  ----------------------
                               Weighted
                                Average     Weighted                Weighted
  Range of                     Remaining     Average                 Average
  Exercise         Number     Contractual   Exercise     Number     Exercise
   Prices        Outstanding     Life        Price     Exercisable    Price
------------     -----------  -----------   --------   -----------  ---------
 $10 - $ 20       49,284,336     4.96        $15.51    45,862,418     $15.51
 $20 - $ 30       29,702,906     7.26         24.39    11,330,106      23.10
 $30 - $ 40       13,915,674     8.18         33.68     3,938,994      33.67
 $40 - $ 50        3,709,050     8.89         44.65        79,080      43.45
 $50 -   up       32,407,500     9.18         51.82             -          -
                 -----------                           ----------
                 129,019,466                           61,210,598
                 -==========                           ==========	

At December 31, 1998, 199,155,370 shares of common stock were reserved for issuance pursuant to stock plans, options and conversions of preferred stock.
Note 11 FINANCIAL INSTRUMENTS
Foreign exchange option contracts and, to a lesser extent, forward contracts, are used to hedge anticipated transactions.
The Company has exposures to net foreign currency denominated assets and liabilities, which approximated $2,310 million, $2,070 million and $1,640 million at December 31, 1998, 1997 and 1996, respectively, primarily in Deutsche marks, French francs, Italian lire and Japanese yen. The Company mitigates the effect of these exposures through third-party borrowings.
The risk of loss associated with the types of foreign exchange option contracts entered into by the Company is limited to premium amounts paid for the option contracts. Premiums are deferred in Prepaid Expenses and amortized in the consolidated statement of earnings (in the Other caption) over the time frame of the underlying hedged transaction. Gains and losses related to the option contracts, which qualify as hedges of foreign currency anticipated transactions, are recognized in earnings when the hedged transactions are recognized. Gains and losses on foreign exchange forward contracts are recognized in the basis of the underlying transaction being hedged.
48

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)
The notional amounts of the Company's foreign exchange option contracts at December 31, 1998, 1997 and 1996 were $1,307 million, $1,279 million and $1,172 million, respectively.
The Company does not anticipate any material adverse effect on its financial position resulting from its involvement in these instruments, nor does it anticipate non-performance by any of its counterparties.
At December 31, 1998, 1997 and 1996, the carrying value of all financial instruments, both short- and long-term, approximated their fair values.
Note 12 LEASES
Minimum rental commitments under all noncancelable operating leases, primarily real estate, in effect at December 31, 1998 were:

Years Ending December 31,
-------------------------

1999                                    $119
2000                                      89
2001                                      74
2002                                      50
2003                                      37
Later years                              154
                                      ------
Total minimum payments                   523
Less total minimum sublease rentals      126
                                      ------
Net minimum rental commitments          $397
                                      ======	

Operating lease rental expense (net of sublease rental income of $27 million in 1998, $26 million in 1997 and $27 million in 1996) was $105 million in 1998, $124 million in 1997 and $129 million in 1996.
49

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)
Note 13 SEGMENT INFORMATION
The major product categories for each business segment are as follows:

                                                     Year Ended December 31,
                                                   --------------------------
                                                      1998      1997     1996
                                                   -------    ------   ------

Medicines
  Cardiovascular                                    $3,210    $2,905   $2,816
  Anti-cancer                                        2,925     2,420    1,971
  Anti-infective                                     2,412     2,235    1,856
  Central nervous system                             1,099       955      760
  Analgesics                                           722       739      718
Beauty Care
  Hair care                                          1,179       794      586
  Haircolor                                            894       841      812
Nutritionals
  Infant formulas                                    1,203     1,219    1,201
Medical Devices
  Orthopaedic implants                                 596       615      644
  Ostomy                                               464       451      452	

Inter-area sales, which are usually billed at or above manufacturing costs, by geographic area, were:

                                                     Year Ended December 31,
                                                  ----------------------------
                                                      1998      1997      1996
                                                  --------   -------   -------

United States                                       $1,434    $1,370    $1,210
Europe, Mid-East and Africa                            843       762       692
Other Western Hemisphere                                29        32        59
Pacific                                                 16        24        25
                                                  --------   -------   -------
Total inter-area eliminations                       $2,322    $2,188    $1,986
                                                  ========   =======   =======	

The Medicines Segment represents pharmaceuticals and consumer medicines businesses. In addition, the segment information reflects certain internal organizational changes made in 1998. Prior year data has been restated accordingly.
50

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)
Included in earnings before taxes of each segment is a cost of capital charge. The offset to the cost of capital charge is included in Other. In addition, Other principally consists of interest income, interest expense and certain administrative expenses, and in 1996, the cost of certain of the Company's productivity programs. In 1998, Other includes the gain on sale of businesses of $201 million and the provision for restructuring of $201 million. In 1997, Other includes the gain on sale of a business of $225 million and the provision for restructuring of $225 million. Other assets principally consist of cash and cash equivalents, time deposits and marketable securities, and certain other assets.

BUSINESS SEGMENTS                  Net Sales           Earnings Before Taxes
-----------------           -----------------------   ----------------------
                               1998    1997    1996     1998    1997    1996
                            ------- ------- -------   ------  ------  ------
Medicines                   $12,573 $11,211 $ 9,848   $3,491  $3,124  $2,758
Beauty Care                   2,305   1,895   1,663      361     280     240
Nutritionals                  1,759   1,793   1,694      376     370     357
Medical Devices               1,647   1,802   1,860      338     352     418
                            ------- ------- -------   ------  ------  ------
Net sales and earnings
 before taxes               $18,284 $16,701 $15,065   $4,566  $4,126  $3,773
                            ======= ======= =======   ======  ======  ======	

GEOGRAPHIC AREAS                   Net Sales            Earnings Before Taxes
----------------           ------------------------   ------------------------
                              1998    1997     1996     1998     1997     1996
                           ------- -------  -------   ------   ------   ------
United States              $12,527 $11,014  $ 9,661   $3,278   $2,700   $2,512
Europe, Mid-East and
  Africa                     4,873   4,653    4,520    1,139    1,109      988
Other Western Hemisphere     1,749   1,586    1,307      223      225      145
Pacific                      1,457   1,636    1,563        2       52       69
Inter-area eliminations     (2,322) (2,188)  (1,986)     (76)      40       59
                           -------  ------   ------   ------    -----    -----
Net sales and earnings
 before taxes              $18,284 $16,701  $15,065    4,566    4,126    3,773
                           ======= =======  =======
Special Charge                                          (800)       -        -
Other                                                    502      356      240
                                                      ------   ------   ------
Earnings before taxes                                 $4,268   $4,482   $4,013
                                                      ======   ======   ======	

51

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)

BUSINESS SEGMENTS                        Year-End Assets
-----------------                   -------------------------
                                       1998     1997     1996
                                    -------  -------  -------
Medicines                           $ 8,545  $ 8,278  $ 7,548
Beauty Care                           1,058      743      652
Nutritionals                          1,094    1,021      910
Medical Devices                       1,174    1,225    1,376
                                    -------  -------  -------
Identifiable segment assets         $11,871  $11,267  $10,486
                                    =======  =======  =======

GEOGRAPHIC AREAS                         Year-End Assets
----------------                    -------------------------
                                       1998     1997     1996
                                    -------  -------  -------
United States                       $ 6,897  $ 6,545  $ 5,925
Europe, Mid-East and Africa           3,540    3,430    3,376
Other Western Hemisphere              1,238    1,063      741
Pacific                                 944      989    1,023
Inter-area eliminations                (748)    (760)    (579)
                                    -------  -------  -------
Identifiable geographic assets       11,871   11,267   10,486

Other assets                          4,401    3,710    4,199
                                    -------  -------  -------
Total assets                        $16,272  $14,977  $14,685
                                    =======  =======  =======	

                                        Capital
BUSINESS SEGMENTS                    Expenditures           Depreciation
-----------------                 ------------------      ----------------
                                  1998   1997   1996      1998  1997  1996
                                  ----   ----   ----      ----  ----  ----
Medicines                         $575   $573   $434      $290  $265  $252
Beauty Care                         71     53     67        29    20    26
Nutritionals                        59     55     43        38    43    45
Medical Devices                     33     24     36        36    46    43
                                  ----   ----   ----      ----  ----  ----
Business segment total             738    705    580       393   374   366
Other                               50     62     21        20    23    21
                                  ----   ----   ----      ----  ----  ----
Total                             $788   $767   $601      $413  $397  $387
                                  ====   ====   ====      ====  ====  ====	

52

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)
Note 14 RETIREMENT PLANS
The Company and certain of its subsidiaries have defined benefit pension plans and defines contribution plans for regular full-time employees. The principal pension plan is the Bristol-Myers Squibb Retirement Income Plan. The Company's funding policy is to contribute amounts to provide for current service and to fund past service liability. Plan benefits are primarily based on years of credited service and on the participants' compensation. Plan assets principally consist of equity and fixed income securities.
Cost for the Company's defined benefit plans included the following components:

                                                    Year Ended December 31,
                                                   ------------------------
                                                     1998     1997     1996
                                                   ------   ------   ------
Service cost -- benefits earned during the year     $ 132    $ 135    $ 127
Interest cost on projected benefit obligation         207      203      191
Expected earnings on plan assets                     (258)    (231)    (213)
Net amortization and deferral                          (1)      10       25
                                                   ------   ------   ------
Net pension expense                                  $ 80    $ 117    $ 130
                                                   ======   ======   ======	

The weighted average actuarial assumptions for the Company's pension plans were as follows:

                                                         December 31,
                                                  ------------------------
                                                    1998     1997     1996
                                                  ------   ------   ------
Discount rate                                        7.0%     7.5%     7.8%
Compensation increase                                4.3%     4.5%     4.8%
Long-term rate of return                            10.0%    10.0%    10.0%	

53

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)
Changes in benefit obligation and plan assets were:

                                                    Year Ended December 31,
                                                -----------------------------
                                                    1998      1997       1996
                                                --------   -------   --------
Benefit obligation at beginning of year           $2,928    $2,734     $2,689
Service cost - benefits earned during the year       132       135        127
Interest cost on projected benefit obligation        207       203        191
Actuarial (gains) and losses                         160        45       (118)
Benefits paid                                       (211)     (189)      (155)
                                                --------   -------   --------
Benefit obligation at end of year                 $3,216    $2,928     $2,734
                                                ========   =======   ========

Fair value of plan assets at beginning of year     2,949     2,596      2,307
Actual earnings on plan assets                       359       504        359
Employer contribution                                 40        38         85
Benefits paid                                       (211)     (189)      (155)
                                                --------   -------   --------
Fair value of plan assets at end of year          $3,137    $2,949     $2,596
                                                ========   =======   ========

                                                         December 31,
                                                -----------------------------
                                                    1998      1997       1996
                                                --------   -------   --------
Plan assets in excess of (less than)
      projected benefit obligation                 $ (79)     $ 21     $ (138)
Unamortized net assets at adoption                   (33)      (47)       (62)
Unrecognized prior service cost                       48        56         67
Unrecognized net losses                               87        13        235
                                                --------   -------   --------
Net amount recognized                               $ 23      $ 43      $ 102
                                                ========   =======   ========

Amounts recognized in the consolidated balance
 sheet consist of:
    Prepaid benefit cost                             187       194        241
    Accrued benefit liability                       (190)     (173)      (165)
    Other asset                                       26        22         26
                                                --------   -------   --------
Net amount recognized                              $  23     $  43      $ 102
                                                ========   =======   ========	

54

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)
The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the pension plans with accumulated benefit obligations in excess of plan assets were $288 million, $230 million and $40 million, respectively, as of December 31, 1998, $271 million, $208 million and $37 million, respectively, as of December 31, 1997, and $272 million, $202 million and $38 million, respectively, as of December 31, 1996. This is primarily attributable to an unfunded benefit equalization plan.
In 1998, the increase in total projected benefit obligation was due to a lower discount rate.
The principal defined contribution plan is the Bristol-Myers Squibb Savings and Investment Program. The Company's contribution is based on employee contributions and the level of company match. Company contributions to the plan were $45 million in 1998, $40 million in 1997 and $39 million in 1996.
Note 15 POSTRETIREMENT BENEFIT PLANS OTHER THAN PENSIONS
The Company provides comprehensive medical and group life benefits to substantially all U.S. retirees who elect to participate in the Company's comprehensive medical and group life plans. The medical plan is contributory. Contributions are adjusted periodically and vary by date of retirement and the original retiring company. The life insurance plan is non-contributory. Plan assets principally consist of equity securities and fixed income securities.
Cost for the Company's postretirement benefit plans included the following components:

                                                          Year Ended
                                                          December 31,
                                                 ---------------------------
                                                    1998      1997      1996
                                                 -------   -------   -------
Service cost -- benefits earned during the year      $ 8      $  9      $  9
Interest cost on accumulated postretirement
  benefit obligation                                  35        36        34
Expected earnings on plan assets                     (11)       (9)       (8)
Net amortization and deferral                         (3)       (2)        1
                                                 -------   -------   -------
Net postretirement benefit expense                  $ 29      $ 34      $ 36
                                                 =======   =======   =======	

55

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)
The weighted average actuarial assumptions for the Company's postretirement benefit plans were as follows:

                                                         December 31,
                                                   ------------------------
                                                     1998     1997     1996
                                                   ------   ------   ------
Discount rate                                         7.0%     7.5%     7.8%
Long-term rate of return                             10.0%    10.0%    10.0%	

Changes in benefit obligation and plan assets were:

                                                  Year Ended December 31,
                                              -----------------------------
                                                 1998       1997       1996
                                              -------    -------    -------
Benefit obligation at beginning of year        $  495     $  482     $  554
Service cost - benefits earned during the year      8          9          9
Interest cost on accumulated post-retirement
     benefit obligation                            35         36         34
Plan participants' contributions                    2          2          2
Plan amendments                                    (1)         -          -
Acquisition                                         -          -          2
Actuarial (gains) and losses                        6         (2)       (87)
Benefits paid                                     (38)       (32)       (32)
                                              -------    -------    -------
Benefit obligation at end of year              $  507     $  495     $  482
                                              =======    =======    =======

Fair value of plan assets at beginning of year  $ 113      $  89      $  74
Actual earnings on plan assets                     15         20         13
Employer contribution                              36         34         32
Plan participants' contributions                    2          2          2
Benefits paid                                     (38)       (32)       (32)
                                              -------    -------    -------
Fair value of plan assets at end of year        $ 128      $ 113       $ 89
                                              =======    =======    =======	

56

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)

                                                         December 31,
                                                 --------------------------
                                                    1998     1997      1996
                                                 -------  -------  --------
Accumulated portretirement benefit obligation
     In excess of plan assets                     $ (379)  $ (382)   $ (393)
Unrecognized prior service cost                        3        4         5
Unrecognized net earnings                            (60)     (65)      (56)
                                                 -------  -------  --------
Accrued postretirement benefit expense            $ (436)  $ (443)   $ (444)
                                                 =======  =======  ========	

For measurement purposes, an annual rate of increase in the per capita cost of covered health care benefits of 7.2% for participants under age 65 and 6.7% for participants age 65 and over was assumed for 1999; the rate was assumed to decrease gradually to 4.75% in 2007 and to remain at that level thereafter.
A one-percentage-point change in assumed health care cost trend rates would have the following effects:

                                                1-Percentage-    1-Percentage-
                                               Point Increase    Point Decrease
                                               --------------    --------------

Effect on the aggregate of the service
  and interest cost Components of net
  postretirement benefit expense                     $  1             $  (1)
Effect on the accumulated postretirement
  benefit obligation                                 $ 22             $ (20)	

In 1998, the increase in total benefit obligation was due to a lower discount rate.
Note 16 CONTINGENCIES
Various lawsuits, claims and proceedings of a nature considered normal to its businesses are pending against the Company and certain of its subsidiaries. The most significant of these are described below. Reference is made to Item 3 Legal Proceedings in Part 1 of this Form 10-K Annual Report.
Breast Implant Litigation
The Company, together with its subsidiary, Medical Engineering Corporation (MEC), and certain other companies, has been named as a defendant in a number of claims and lawsuits alleging damages for personal injuries of various types resulting from polyurethane-covered breast implants and smooth-walled breast implants formerly manufactured by MEC or a related company. Of the more than 90,000 claims or potential claims against the Company in direct
57

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)
lawsuits or through registration in the nationwide class action settlement approved by the Federal District Court in Birmingham, Alabama (the Revised Settlement), most have been dealt with through the Revised Settlement, other settlements, or trial. It is expected that as of January 1, 1999, the Company's contingent liability in respect of breast implant claims will be limited to residual unpaid Revised Settlement obligations and to roughly 6,000 remaining opt-outs who have pursued or may pursue their claims in court.
As of December 31, 1998, approximately 15,000 United States and 1,300 foreign breast implant recipients were plaintiffs in lawsuits pending in federal and state courts in the United States and in certain courts in Canada and Australia. These figures include the claims of plaintiffs that are in the process of being settled and/or dismissed. In these lawsuits, about 10,200 U.S. and 400 foreign plaintiffs opted out of the Revised Settlement. The lawsuits of the 4,800 U.S. plaintiffs who did not opt out are expected to be dismissed since these plaintiffs are among the estimated 74,000 women with MEC implants who chose to participate in the nationwide settlement. Of the remaining opt-out plaintiffs, some have claims based upon products that were not manufactured and sold by MEC; many others have claims that are in the process of being settled. Under the terms of the Revised Settlement, additional opt-outs are expected to be minimal since the deadline for U.S. class members to opt out has passed. In addition, the Company's remaining obligations under the Revised Settlement Program are limited because most payments to "Current Claimants" already have been made, no additional "Current Claims" may be filed without court approval, and because payments of claims to so-called "Other Registrants" and "Late Registrants" are limited by the terms of the Revised Settlement. Separate class action settlements have been approved in the provincial courts of Ontario and Quebec, and an agreement has been reached under which other foreign breast implant recipients may settle their claims. The Company believes it will be able to address remaining opt-out claims as well as expected remaining obligations under the Revised Settlement Program within its reserves described below.
In the fourth quarter of 1993, the Company recorded a charge of $500 million before taxes ($310 million after taxes) in respect of breast implant cases. The charge consisted of $1.5 billion for potential liabilities and expenses, offset by $1.0 billion of expected insurance proceeds. In the fourth quarters of 1994 and 1995, the Company recorded additional special charges of $750 million before taxes ($488 million after taxes) and $950 million before taxes ($590 million after taxes), respectively, related to breast implant product liability claims. In the fourth quarter of 1998, the Company recorded an additional special charge to earnings in the amount of $800 million before taxes and increased its insurance receivable in the amount of $100 million, resulting in a net charge to earnings of $433 million after taxes in respect of breast implant product liability claims. At December 31, 1998, 1997 and 1996 the amount of insurance recoverable was $523 million, $619 million and $853 million, respectively, and included in current and other liabilities for product liability claims was $1,121 million, $1,036 million and $1,831 million, respectively.
Prescription Drug Litigation
As of December 31, 1998, the Company is a defendant in over 100 actions brought against the Company and more than 30 other pharmaceutical manufacturers, drug wholesalers and pharmacy benefit managers in various federal district courts by certain chain drugstores, supermarket chains and independent drug stores, which opted out of a nationwide class (previously settled by the Company) and are suing individually. These cases have been coordinated for pretrial purposes and all seek treble damages and injunctive relief on account of alleged antitrust violations in the pricing and marketing of brand name prescription drugs. Cases brought by retail pharmacies in state court under state law alleging similar grounds are pending in California, Alabama and Mississippi. Purported class actions, some
58

BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in millions)
purportedly multistate in reach, brought by consumers in state court under state law alleging similar grounds have been settled, subject to court approval, in California and remain pending in Alabama and Tennessee. In the fourth quarter of 1998, the Company recorded a special charge to earnings in the amount of $100 million before taxes ($62 million after taxes) in respect of this prescription drug litigation. While it is not possible to predict with certainty the outcome of these cases, it is the opinion of management that they will not have a material adverse effect on the Company's operating results, liquidity or consolidated financial position.
59

Note 17 SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

                                   First   Second    Third   Fourth
                                  Quarter  Quarter  Quarter  Quarter    Year
                                  -------  -------  -------  -------   ------
1998:
Net Sales                         $4,446   $4,430   $4,523   $4,885   $18,284
Gross Profit                       3,294    3,224    3,332    3,578    13,428
Net Earnings                         927      835      966      413     3,141
Earnings Per Common Share
 Basic                               .47      .42      .49      .21      1.58
 Diluted                             .46      .41      .47      .20      1.55

1997:
Net Sales                         $4,045   $4,064   $4,151   $4,441   $16,701
Gross Profit                       2,967    2,967    3,041    3,262    12,237
Net Earnings                         810      738      855      802     3,205
Earnings Per Common Share
 Basic                               .41      .37      .43      .40      1.61
 Diluted                             .40      .36      .42      .39      1.57	

* In 1998, the first quarter results included a gain on the sale of a business of $125 million ($78 million after taxes) and a provision for restructuring of $125 million ($78 million after taxes). The second quarter results included a gain on the sale of businesses of $76 million ($47 million after taxes) and a provision for restructuring of $76 million ($47 million after taxes). The fourth quarter results included a charge of $800 million ($495 million after taxes; or $.25 per common share - basic and $.24 per common share - diluted) for litigation of breast implant and prescription drug pricing cases, offset by expected insurance recoveries.
* In 1997, the fourth quarter results included a gain on the sale of a business of $225 million ($140 million after taxes) and a provision for restructuring of $225 million ($140 million after taxes).
60

REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Stockholders of
Bristol-Myers Squibb Company
In our opinion, the consolidated financial statements listed in the index appearing under Item 14(a)(1) and (2) on page 63 present fairly, in all material respects, the financial position of Bristol-Myers Squibb Company and its subsidiaries at December 31, 1998, 1997 and 1996, and the results of their operations and their cash flows for the years then ended in conformity with generally accepted accounting principles. These 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 of these statements in accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above.

/s/ PricewaterhouseCoopers LLP
------------------------------

11 Madison Avenue
New York, New York  10010

January 20, 1999	

61

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
(a) Reference is made to the Proxy Statement for the Annual Meeting of Stockholders on May 4, 1999 with respect to the Directors of the Registrant which is incorporated herein by reference and made a part hereof in response to the information required by Item 10.
(b) The information required by Item 10 with respect to the Executive Officers of the Registrant has been included in Part IA of this Form 10-K Annual Report in reliance on General Instruction G of Form 10-K and Instruction 3 to Item 401(b) of Regulation S-K.
Item 11. EXECUTIVE COMPENSATION.
Reference is made to the Proxy Statement for the Annual Meeting of Stockholders on May 4, 1999 with respect to Executive Compensation which is incorporated herein by reference and made a part hereof in response to the information required by Item 11.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Reference is made to the Proxy Statement for the Annual Meeting of Stockholders on May 4, 1999 with respect to the security ownership of certain beneficial owners and management which is incorporated herein by reference and made a part hereof in response to information required by Item 12.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Reference is made to the Proxy Statement for the Annual Meeting of Stockholders on May 4, 1999 with respect to certain relationships and related transactions which is incorporated herein by reference and made a part hereof in response to the information required by Item 13.
62

PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

                                                               Page
                                                               Number
                                                             ----------
(a)

   1.  Financial Statements                                    33-37
       Notes to Consolidated Financial Statements              38-60
       Report of Independent Accountants                       61

   2.  Financial Statement Schedules

                                               Schedule           Page
                                               Number             Number
                                              ---------         ----------	

Valuation and qualifying accounts II S-1
All other schedules not included with this additional financial data are omitted because they are not applicable or the required information is included in the financial statements or notes thereto.
3. Exhibit List
The Exhibits listed below are identified by numbers corresponding to the Exhibit Table of Item 601 of Regulation S-K. The Exhibits designated by two asterisks (**) are management contracts or compensatory plans or arrangements required to be filed pursuant to this Item 14. Unless otherwise indicated, all Exhibits are part of Commission File Number 1-1136.
3a. Restated Certificate of Incorporation of Bristol-Myers Squibb Company (filed as Exhibit 4a to Registrant's Registration Statement on Form S-3, Registration Statement No. 33-33682, dated March 7, 1990, as amended through May 6, 1997).
3b. Bylaws of Bristol-Myers Squibb Company, as amended through November 3, 1998 (incorporated herein by reference to Exhibit 3(b) to Form 10-Q for the quarterly period ended September 30, 1998).
4a. Letter of Agreement dated March 28, 1984 (incorporated herein by reference to Exhibit 4 to Form 10-K for the fiscal year ended December 31, 1983).
4b. Indenture, dated as of June 1, 1993, between Bristol-Myers Squibb Company and The Chase Manhattan Bank (National Association), as trustee (incorporated herein by reference to Exhibit 4.1 to the Form 8-K dated May 27, 1993, and filed on June 3, 1993).
4c. Form of 7.15% Debenture Due 2023 of Bristol-Myers Squibb Company (incorporated herein by reference to Exhibit 4.2 to the Form 8-K dated May 27, 1993, and filed on June 3, 1993).
63

4d. Form of 6.80% Debenture Due 2026 of Bristol-Myers Squibb Company (incorporated herein by reference to Exhibit 4e to the Form 10-K for the fiscal year ended December 31, 1996).
4e. Form of 6.875% Debenture Due 2097 of Bristol-Myers Squibb Company (incorporated herein by reference to Exhibit 4f to the Form 10-Q for the quarterly period ended September 30, 1997).
4f. Five Year Competitive Advance and Revolving Credit Facility Agreement dated as of March 17, 1998 among Bristol-Myers Squibb Company, the Borrowing Subsidiaries (as defined in the Agreement), the Lenders listed in Schedule 2.1 to the Agreement, The Chase Manhattan Bank as Administrative Agent and Citibank, N.A., as Administrative Agent (incorporated herein by reference to Exhibit 4f to the Form 10-K for the fiscal year ended December 31, 1997).
4g. 364-Day Competitive Advance and Revolving Credit Facility agreement dated as of March 17, 1998 among Bristol-Myers Squibb Company, the Borrowing Subsidiaries (as defined in the Agreement), the Lenders listed in Schedule 2.1 to the Agreement, The Chase Manhattan Bank as Administrative Agent and Citibank, N.A., as Administrative Agent (incorporated herein by reference to Exhibit 4g to the Form 10-K for the fiscal year ended December 31, 1997).
**10a. Bristol-Myers Squibb Company 1997 Stock Incentive Plan, effective as of May 6, 1997 and as amended effective November 3, 1998, filed herewith.
**10b. Bristol-Myers Squibb Company Executive Performance Incentive Plan (incorporated herein by reference to Exhibit 10b to the Form 10-K for the fiscal year ended December 31, 1996).
**10c. Bristol-Myers Squibb Company 1983 Stock Option Plan, as amended and restated as of January 1, 1997, as amended November 3, 1998, filed herewith.
**10d. Squibb Corporation 1982 Option, Restricted Stock and Performance Unit Plan, as amended (incorporated herein by reference to Exhibit 10b to the Form 10-K for the fiscal year ended December 31, 1993).
**10e. Squibb Corporation 1986 Option, Restricted Stock and Performance Unit Plan, as amended (as adopted, incorporated herein by reference to Exhibit 10k to the Squibb Corporation Form 10-K for the fiscal year ended December 31, 1988, File No. 1-5514; as amended effective July 1, 1993, and incorporated herein by reference to Exhibit 10c to the Form 10-K for the fiscal year ended December 31, 1993).
**10f. Bristol-Myers Squibb Company Performance Incentive Plan, as amended (as adopted, incorporated herein by reference to Exhibit 2 to the Form 10-K for the fiscal year ended December 31, 1978; as amended as of January 8, 1990, incorporated herein by reference to Exhibit 19b to the Form 10-K for the fiscal year ended December 31, 1990; as amended on April 2, 1991, incorporated herein by reference to Exhibit 19b to the Form 10-K for the fiscal year ended December 31, 1991; as amended effective January 1, 1994, incorporated herein by reference to Exhibit 10d to the Form 10-K for the fiscal year ended December 31, 1993; and as amended effective January 1, 1994, incorporated herein by reference to Exhibit 10d to the Form 10-K for the fiscal year ended December 31, 1994).
64

**10g. Benefit Equalization Plan of Bristol-Myers Squibb Company and its Subsidiary or Affiliated Corporations Participating in the Bristol-Myers Squibb Company Retirement Income Plan or the Bristol-Myers Squibb Puerto Rico, Inc. Retirement Income Plan, as amended (as amended and restated as of January 1, 1993, as amended effective October 1, 1993, incorporated herein by reference to Exhibit 10e to the Form 10-K for the fiscal year ended December 31, 1993; and as amended effective February 1, 1995, incorporated herein by reference to Exhibit 10e to the Form 10-K for the fiscal year ended December 31, 1996).
**10h. Benefit Equalization Plan of Bristol-Myers Squibb Company and its Subsidiary or Affiliated Corporations Participating in the Bristol-Myers Squibb Company Savings and Investment Program, as amended (as amended and restated as of May 1, 1990, incorporated herein by reference to Exhibit 19d to the Form 10-K for the fiscal year ended December 31, 1990; as amended as of January 1, 1991, incorporated herein by reference to Exhibit 19g to the Form 10-K for the fiscal year ended December 31, 1990; as amended as of January 1, 1991, incorporated herein by reference to Exhibit 19e to the Form 10-K for the fiscal year ended December 31, 1991, as amended as of October 1, 1994, incorporated herein by reference to Exhibit 10f to the Form 10-K for the fiscal year ended December 31, 1994).
**10i. Squibb Corporation Supplementary Pension Plan, as amended (as previously amended and restated, incorporated herein by reference to Exhibit 19g to the Form 10-K for the fiscal year ended December 31, 1991; as amended as of September 14, 1993, and incorporated herein by reference to Exhibit 10g to the Form 10-K for the fiscal year ended December 31, 1993).
**10j. Bristol-Myers Squibb Company Restricted Stock Award Plan, as amended (as adopted on November 7, 1989, incorporated herein by reference to Exhibit 10t to the Form 10-K for the fiscal year ended December 31, 1989; as amended on December 4, 1990, incorporated herein by reference to Exhibit 19a to the Form 10-K for the fiscal year ended December 31, 1990; as amended effective July 1, 1993, incorporated herein by reference to Exhibit 10h to the Form 10-K for the fiscal year ended December 31, 1993; as amended effective December 6, 1994, incorporated herein by reference to Exhibit 10h to the Form 10-K for the fiscal year ended December 31, 1994).
**10k. Bristol-Myers Squibb Company Retirement Income Plan for Non-Employee Directors, as amended to March 5, 1996 (incorporated herein by reference to Exhibit 10k to the Form 10-K for the fiscal year ended December 31, 1996).
**10l. Bristol-Myers Squibb Company 1987 Deferred Compensation Plan for Non- Employee Directors, as amended to January 13, 1998, (incorporated herein by reference to Exhibit 10l to the Form 10-K for the fiscal year ended December 31, 1997).
**10m. Bristol-Myers Squibb Company Non-Employee Directors' Stock Option Plan, as amended (as approved by the Stockholders on May 1, 1990, incorporated herein by reference to Exhibit 28 to Registration Statement No. 33-38587 on Form S-8; as amended May 7, 1991, incorporated herein by reference to Exhibit 19c to the Form 10-K for the fiscal year ended December 31, 1991), as amended January 12, 1999, filed herewith.
65

**10n. Squibb Corporation Deferral Plan for Fees of Outside Directors, as amended (as adopted, incorporated herein by reference to Exhibit 10e to the Squibb Corporation Form 10-K for the fiscal year ended December 31, 1987, File No. 1-5514; as amended effective December 31, 1991, incorporated herein by reference to Exhibit 10m to the Form 10-K for the fiscal year ended December 31, 1992).
**10o. Amendment to all of the Company's plans, agreements, legal documents and other writings, pursuant to action of the Board of Directors on October 3, 1989, to reflect the change of the Company's name to Bristol- Myers Squibb Company (incorporated herein by reference to Exhibit 10v to the Form 10-K for the fiscal year ended December 31, 1989).
**10p. Employment agreement of March 12, 1999 for Charles A. Heimbold, Jr., filed herewith.
21. Subsidiaries of the Registrant (filed herewith).
23. Consent of PricewaterhouseCoopers LLP(filed herewith).
27. Bristol-Myers Squibb Company Financial Data Schedule (filed herewith).
99. Additional Exhibit (filed herewith).
(b) Reports on Form 8-K
None.
66

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.
BRISTOL-MYERS SQUIBB COMPANY
 (Registrant)

By /s/    Charles A. Heimbold, Jr.
----------------------------------
Charles A. Heimbold, Jr.
Chairman of the Board and
Chief Executive Officer

     March 31, 1999
----------------------------------
     Date	

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

     Signature                        Title                       Date
     ----------                      --------                    -------

                               Chairman of the Board,
                               Chief Executive Officer
                               And Director (Principal
/s/ Charles A. Heimbold, Jr.   Executive Officer)             March 31, 1999
------------------------------
   (Charles A. Heimbold, Jr.)

                               Chief Financial Officer
                                and Senior Vice President
                               Corporate Staff(Principal
/s/ Michael F. Mee             Financial Officer)             March 31, 1999
------------------------------
   (Michael F. Mee)
                               Controller and Vice President,
                               Financial Operations,
                               Corporate Staff (Principal
/s/ Frederick S. Schiff        Accounting Officer)            March 31, 1999
------------------------------
   (Frederick S. Schiff)	

67

Signature                          Title                          Date
--------                           ------                        ------

/s/  Robert E. Allen          Director                        March 31, 1999
-----------------------------
    (Robert E. Allen)

/s/  Lewis B. Campbell        Director                        March 31, 1999
-----------------------------
    (Lewis B. Campbell)

/s/  Vance D. Coffman         Director                        March 31, 1999
-----------------------------
    (Vance D. Coffman)

/s/  Ellen V. Futter          Director                        March 31, 1999
-----------------------------
    (Ellen V. Futter)

/s/  Louis V. Gerstner, Jr.   Director                        March 31, 1999
-----------------------------
    (Louis V. Gerstner, Jr.)

/s/  Laurie H. Glimcher, M.D. Director                        March 31, 1999
-----------------------------
    (Laurie H. Glimcher, M.D.)

/s/  Leif Johansson           Director                        March 31, 1999
-----------------------------
    (Leif Johansson)

/s/  James D. Robinson III    Director                        March 31, 1999
-----------------------------
    (James D. Robinson III)

/s/  Louis W. Sullivan, M.D.  Director                        March 31, 1999
-----------------------------
    (Louis W. Sullivan, M.D.)	

Executive Vice President,

/s/  Kenneth E. Weg           and Director                    March 31, 1999
----------------------------
    (Kenneth E. Weg)	

68

EXHIBIT INDEX
The Exhibits listed below are identified by numbers corresponding to the Exhibit Table of Item 601 of Regulation S-K. The Exhibits designed by two asterisks (**) are management contracts or compensatory plans or arrangements required to be filed pursuant to this Item 14. An asterisk (*) in the Page column indicates that the Exhibit has been previously filed with the Commission and is incorporated herein by reference. Unless otherwise indicated, all Exhibits are part of Commission File Number 1-1136.

  Exhibit Number and Description                                       Page
  ------------------------------                                      -------

3a. Restated Certificate of Incorporation of Bristol-Myers Squibb         *
    Company (incorporated herein by reference to Exhibit 4a to
    Registration Statement No. 33-33682 on Form S-3).

3b. Bylaws of Bristol-Myers Squibb Company, as amended through            *
    November 3, 1998 (incorporated herein by reference to Exhibit 3(b)
    to form 10-Q for the quarterly period ended September 30, 1998).

4a. Letter of Agreement dated March 28, 1984 (incorporated                *
    herein by reference to Exhibit 4 to Form 10-K for the fiscal
    year ended December 31,1983).

4b. Indenture, dated as of June 1, 1993, between Bristol-Myers Squibb     *
    Company and The Chase Manhattan Bank (National Association),
    as trustee (incorporated herein by reference to Exhibit 4.1
    to the Form 8-K dated May 27, 1993, and filed on June 3, 1993).

4c. Form of 7.15% Debenture Due 2023 of Bristol-Myers Squibb              *
    Company (incorporated herein by reference to Exhibit 4.2 to the
    Form 8-K dated May 27, 1993, and filed on June 3, 1993).

4d. Form of 6.80% Debenture Due 2026 of Bristol-Myers Squibb              *
    Company (incorporated herein by reference to Exhibit 4e to the
    Form 10-K for the fiscal year ended December 31, 1996).

4e. Form of 6.875% Debenture Due 2097 of Bristol-Myers Squibb             *
    Company (incorporated herein by reference to Exhibit 4f to the
    Form 10-Q for the quarterly period ended September 30, 1997).	

69

     Exhibit Number and Description                                      Page
     ------------------------------                                     ------

 4f. Five Year Competitive Advance and Revolving Credit Facility           *
     Agreement dated as of March 17, 1998 among Bristol-Myers Squibb
     Company, the Borrowing Subsidiaries (as defined in the
     Agreement), the Lenders listed in Schedule 2.1 to the Agreement,
     The Chase Manhattan Bank as Administrative Agent and
     Citibank, N.A., as Administrative Agent.

 4g. 364-Day Competitive Advance and Revolving Credit Facility             *
     Agreement dated as of March 17, 1998 among Bristol-Myers Squibb
     Company, the Borrowing Subsidiaries (as defined in the Agreement),
     the Lenders listed in Schedule 2.1 to the Agreement, The Chase
     Manhattan Bank as Administrative Agent and Citibank, N.A.,
     as Administrative Agent.

** 10a. Bristol-Myers Squibb Company 1997 Stock Incentive Plan,          E-1-1
     effective as of May 6, 1997 and as amended effective
     November 3, 1998.

** 10b. Bristol-Myers Squibb Company Executive Performance Incentive       *
     Plan (incorporated herein by reference to Exhibit 10b to the
     Form 10-K for the fiscal year ended December 31, 1996).

** 10c. Bristol-Myers Squibb Company 1983 Stock Option Plan, as          E-2-1
     amended and restated as of January 1, 1997, as amended
     November 3, 1998.

** 10d. Squibb Corporation 1982 Option, Restricted Stock and               *
     Performance Unit Plan, as amended (incorporated by reference
     to Exhibit 10b to the Form 10-K for the fiscal year ended
     December 31, 1993).

** 10e. Squibb Corporation 1986 Option, Restricted Stock and Performance   *
     Unit Plan, as amended (as adopted, incorporated herein by reference
     to Exhibit 10k to the Squibb Corporation Form 10-K for the fiscal
     year ended December 31, 1988, File No. 1-5514, as amended
     July 1, 1993, incorporated herein by reference to Exhibit 10c to the
     Form 10-K for the fiscal year ended December 31, 1993).	

70

     Exhibit Number and Description                                       Page
     ------------------------------                                      ------

** 10f. Bristol-Myers Squibb Company Performance Incentive Plan, as        *
     amended (as adopted, incorporated herein by reference to Exhibit 2
     to the Form 10-K for the fiscal year ended December 31, 1978; as
     amended as of January 8, 1990, incorporated herein by reference
     to Exhibit 19b to the Form 10-K for the fiscal year ended
     December 31, 1990; as amended on April 2, 1991, incorporated
     herein by reference to Exhibit 19b to the Form 10-K for the fiscal
     year ended December 31, 1991; as amended effective on January 1,
     1994, and incorporated herein by reference to Exhibit 10d to the
     Form 10-K for the fiscal year ended December 31, 1994).

** 10g. Benefit Equalization Plan of Bristol-Myers Squibb Company and its  *
     Subsidiary or Affiliated corporations Participating in the Bristol-
     Myers Squibb Company Retirement Income Plan or the Bristol-Myers
     Squibb Puerto Rico, Inc. Retirement Income Plan, as amended (as
     amended and restated as of January 1, 1993, as amended effective
     October 1, 1993, incorporated herein by reference to Exhibit 10e to
     the Form 10-K for the fiscal year ended December 31, 1993 and
     amended effective February 1, 1995, incorporated by reference to
     Exhibit 10e to the Form 10-K for the fiscal year ended December 31,
     1995).

** 10h. Benefit Equalization Plan of Bristol-Myers Squibb Company and      *
     its Subsidiary or Affiliated Corporation Participating in the
     Bristol-Myers Squibb Company Savings and Investment
     Program, as amended (as amended and restated as of
     May 1, 1990, incorporated herein by reference to Exhibit 19d
     to the Form 10-K for the fiscal year ended December 31, 1990;
     as amended as of January 1, 1991, incorporated herein by
     reference to Exhibit 19g to the Form 10-K for the fiscal year
     ended December 31, 1990; as amended as of January 1, 1991,
     incorporated herein by reference to Exhibit 19e to the Form 10-K
     for the fiscal year ended December 31, 1991; as amended as of
     October 1, 1994, incorporated herein by reference to Exhibit 10f
     of the Form 10-K for the fiscal year ended December 31, 1994).

** 10i. Squibb Corporation Supplementary Pension Plan, as amended (as      *
     previously amended and restated, incorporated herein by reference
     to Exhibit 19g to the Form 10-K for the fiscal year ended
     December 31, 1991; as amended on September 14, 1993,
     incorporated by reference to Exhibit 10g to the Form 10-K
     for the fiscal year ended December 31, 1993).	

71

     Exhibit Number and Description                                      Page
     ------------------------------                                     ------

** 10j. Bristol-Myers Squibb Company Restricted Stock Award Plan, as       *
     amended (as adopted on November 7, 1989, incorporated herein
     by reference to Exhibit 10t to the Form 10-K for the fiscal year
     ended December 31, 1989; as amended on December 4, 1990,
     incorporated herein by reference to Exhibit 19a to the
     Form 10-K for the fiscal year ended December 31, 1990; as
     amended July 1, 1993, incorporated by reference to Exhibit 10h
     to the Form 10-K for the fiscal year ended December 31, 1993;
     as amended effective December 6, 1994, incorporated by
     reference to Exhibit 10h to the Form 10-K for the fiscal year
     Ended January 31, 1994).

** 10k. Bristol-Myers Squibb Company Retirement Income Plan for            *
     Non-Employee Directors, as amended to March 5,1996
     (incorporated herein by reference to Exhibit 10k to the Form 10-K
     for the fiscal year ended December 31, 1996).

** 10l. Bristol-Myers Squibb Company 1987 Deferred Compensation            *
     Plan for Non-Employee Directors, as amended to January 13, 1998.

** 10m. Bristol-Myers Squibb Company Non-Employee Directors' Stock       E-3-1
     Option Plan, as amended (as approved by the Stockholders on
     May 1, 1990, incorporated herein by reference to Exhibit 28
     to Registration Statement No. 33-38587 on Form S-8; as amended
     May 7, 1991, incorporated herein by reference to Exhibit 19c to
     the Form 10-K for the fiscal year ended December 31, 1991),
     as amended January 12, 1999.

** 10n. Squibb Corporation Deferral Plan for Fees of Outside Directors,    *
     as amended (as adopted, incorporated herein by reference to
     Exhibit 10e to the Squibb Corporation Form 10-K for the
     fiscal year ended December 31, 1987, File No. 1-5514; as
     amended effective December 31, 1991, incorporated herein
     by reference to Exhibit 10m to the Form 10-K for the fiscal
     year ended December 31, 1992).

** 10o. Amendment to all of the Company's plans, agreements, legal         *
     documents and other writings, pursuant to action of the Board
     of Directors on October 3, 1989, to reflect the change of the
     Company's name to Bristol-Myers Squibb Company (incorporated
     herein by reference to Exhibit 10v to the Form 10-K for the
     fiscal year ended December 31, 1989).	

72

     Exhibit Number and Description                                      Page
     ------------------------------                                     ------

** 10p. Employment agreement of March 12, 1999 for Charles A.            E-4-1
     Heimbold, Jr.	

21. Subsidiaries of the Registrant. E-5-1
23. Consent of PricewaterhouseCoopers LLP. E-6-1
27. Bristol-Myers Squibb Company Financial Data Schedule. E-7-1
99. Additional Exhibit E-8-1
73

SCHEDULE II
BRISTOL-MYERS SQUIBB COMPANY
VALUATION AND QUALIFYING ACCOUNTS
 (dollars in millions)

                                 Additions
                    Balance at  charged to    Deductions-   Balance at
                     beginning   costs and     bad debts       end
Description          of period   expenses     written off    of period
---------------     ----------  ----------   ------------   ----------

Allowances for
  discounts and
  doubtful accounts:

For the year ended
  December 31, 1998       $109         $57            $19          $147
                    ==========  ==========   ============   ===========

For the year ended
  December 31, 1997       $107         $19            $17          $109
                    ==========  ==========   ============   ===========

For the year ended
  December 31, 1996       $100         $39            $32          $107
                    ==========  ==========   ============   ===========	

S-1

BRISTOL-MYERS SQUIBB COMPANY
1997 STOCK INCENTIVE PLAN
 (as amended as of November 3, 1998)
1. Purpose: The purpose of the 1997 Stock Incentive Plan is to secure for the Company and its stockholders the benefits of the incentive inherent in common stock ownership by the officers and key employees of the Company and its Subsidiaries and Affiliates who will be largely responsible for the Company's future growth and continued financial success and by providing long-term incentives in addition to current compensation to certain key executives of the Company and its Subsidiaries and Affiliates who contribute significantly to the long-term performance and growth of the Company and such Subsidiaries and Affiliates. It is intended that the former purpose will be effected through the granting of stock options, stock appreciation rights, dividend equivalents and/or restricted stock under the Plan and that the latter purpose will be effected through an award conditionally granting performance units or performance shares under the Plan, either independently or in conjunction with and related to a nonqualified stock option grant under the Plan.
2. Definitions: For purposes of this Plan:
(a) "Affiliate" shall mean any entity in which the Company has an ownership interest of at least 20%.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" shall mean the Company's common stock (par value $.10 per share).
(d) "Company" shall mean the Issuer (the Bristol-Myers Squibb Company), its Subsidiaries and Affiliates.
(e) "Disability" or "Disabled" shall mean qualifying for and receiving payments under a disability pay plan of the Company or any Subsidiary or Affiliate.
(f) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
(g) "Fair Market Value" shall mean the average of the high and low sale prices of a share of Common Stock on the New York Stock Exchange, Inc. composite tape on the date of measurement or on any date as determined by the Committee and if there were no trades on such date, on the day on which a trade occurred next preceding such date.
(h) "Issuer" shall mean the Bristol-Myers Squibb Company.
(i) "Prior Plan" shall mean the Bristol-Myers Squibb Company 1983 Stock Option Plan as amended and restated effective as of September 10, 1996.
(j) "Retirement" shall mean termination of the employment of an employee with the Company or a Subsidiary or Affiliate on or after (i) the employee's 65th birthday or (ii) the employee's 55th birthday if the employee has completed 10 years of service with the Company, its Subsidiaries and/or its Affiliates. For purposes of this Section 2(j) and all other purposes of this Plan, Retirement shall also mean termination of employment of an employee with the Company or a Subsidiary or Affiliate for any reason (other than the employee's death, disability, resignation, willful misconduct or activity deemed detrimental to the interests of the Company) where, on termination, the employee's age plus years of service (rounded up to the next higher whole number) equals at least 70 and the employee has completed 10 years of service with the Company, its Subsidiaries and/or its Affiliates.
E-1-1

Furthermore, an employee who makes an election to retire under Article 19 of the Bristol-Myers Squibb Company Retirement Income Plan (the "Retirement Income Plan") shall have any additional years of age and service which are credited under Article 19 of the Retirement Income Plan taken into account when determining such employee's age and service under this Section 2(j). Such election shall be deemed a Retirement for purposes of this Section 2(j) and all other purposes of this Plan.
(k) "Subsidiary" shall mean any corporation which at the time qualifies as a subsidiary of the Company under the definition of "subsidiary corporation" in Section 424 of the Code.
3. Amount of Stock: The amount of stock which may be made subject to grants of options or awards of performance units under the Plan in calendar year 1997 shall not exceed an amount equal to the amount of shares available for, and not made subject to, grants of options or awards under the Prior Plan as of February 28, 1997. With respect to each succeeding year, the amount of stock which may be made subject to grants of options or awards of performance units under the Plan shall not exceed an amount equal to (i) 0.9% of the outstanding shares of the Company's Common Stock on January 1 of such year plus, subject to this Section 3, (ii) in any year the number of shares equal to the amount of shares that were available for grants and awards in the prior year but were not made subject to a grant or award in such prior year and (iii) the number of shares that were subject to options or awards granted hereunder or under the Prior Plan, which options or awards terminated or expired in the prior year without being exercised. No individual may be granted options or awards under Sections 6, 7 or 8 in the aggregate, in respect of more than 1,500,000 shares of the Company's Common Stock in a calendar year; upon a change in stock the maximum number of shares shall be adjusted in number and kind pursuant to Section 10. Aggregate shares issued under performance share awards made pursuant to Section 7 and restricted stock awards made pursuant to Section 8 may not exceed 10,000,000 shares over the life of the Plan. Common Stock issued hereunder may be authorized and reissued shares or issued shares acquired by the Company or its Subsidiaries on the market or otherwise.
4. Administration: The Plan shall be administered under the supervision of the Board of Directors of the Company which shall exercise its powers, to the extent herein provided, through the agency of a Compensation and Management Development Committee (the "Committee") which shall be appointed by the Board of Directors of the Company. The Committee shall consist of not less than three (3) members of the Board who meet the definition of "outside director" under the provisions of Section 162(m) of the Code and the definition of "non-employee directors" under the provisions of the Exchange Act or rules or regulations promulgated thereunder. No member of the Committee shall have been within one year prior to appointment to, or while serving on, the Committee granted or awarded equity securities of the Company pursuant to this or any other plan of the Company except to the extent that participation in any such plan or receipt of any such grant or award would not adversely affect the Committee member's status as a "nonemployee director" or as an "outside director".
The Committee, from time to time, may adopt rules and regulations ("Regulations") for carrying out the provisions and purposes of the Plan and make such other determinations, not inconsistent with the terms of the Plan, as the Committee shall deem appropriate. The interpretation and construction of any provision of the Plan by the Committee shall, unless otherwise determined by the Board of Directors, be final and conclusive.
The Committee shall maintain a written record of its proceedings. A majority of the Committee shall constitute a quorum, and the acts of a majority of the members present at any meeting at which a quorum is present, or acts unanimously approved in writing, shall be the acts of the Committee.
5. Eligibility: Options and awards may be granted only to present or future officers and key employees of the Company and its Subsidiaries and Affiliates, including Subsidiaries and Affiliates which become such after the adoption of the Plan. Any officer or key employee of the Company or of any such Subsidiary or Affiliate shall be eligible to receive one or more options or awards under the Plan. Any director who is not an officer or employee of the Company or one of its Subsidiaries or Affiliates and any member of the Committee, during the
E-1-2

time of the member's service as such or thereafter, shall be ineligible to receive an option or award under the Plan. The adoption of this Plan shall not be deemed to give any officer or employee any right to an award or to be granted an option to purchase Common Stock of the Company, except to the extent and upon such terms and conditions as may be determined by the Committee.
6. Stock Options: Stock options under the Plan shall consist of incentive stock options under Section 422 of the Code or nonqualified stock options (options not intended to qualify as incentive stock options), as the Committee shall determine. In addition, the Committee may grant stock appreciation rights in conjunction with an option, as set forth in Section 6(b)(11), or may grant awards in conjunction with an option, as set forth in Section
6(b)(10) (an "Associated Option").
Each option shall be subject to the following terms and conditions:
(a) Grant of Options. The Committee shall (1) select the officers and key employees of the Company and its Subsidiaries and Affiliates to whom options may from time to time be granted, (2) determine whether incentive stock options or nonqualified stock options are to be granted,
(3) determine the number of shares to be covered by each option so granted, (4) determine the terms and conditions (not inconsistent with the Plan) of any option granted hereunder (including but not limited to restrictions upon the options, conditions of their exercise, or on the shares of Common Stock issuable upon exercise thereof), (5) determine whether nonqualified stock options or incentive stock options granted under the Plan shall include stock appreciation rights and, if so, shall determine the terms and conditions thereof in accordance with Section 6(b)(11) hereof, (6) determine whether any nonqualified stock options granted under the Plan shall be Associated Options, and
(7) prescribe the form of the instruments necessary or advisable in the administration of options.
(b) Terms and Conditions of Option. Any option granted under the Plan shall be evidenced by a Stock Option Agreement executed by the Company and the optionee, in such form as the Committee shall approve, which agreement shall be subject to the following terms and conditions and shall contain such additional terms and conditions not inconsistent with the Plan, and in the case of an incentive stock option not inconsistent with the provisions of the Code applicable to incentive stock options, as the Committee shall prescribe:
(1) Number of Shares Subject to an Option. The Stock Option Agreement shall specify the number of shares of Common Stock subject to the Agreement. If the option is an Associated Option, the number of shares of Common Stock subject to such Associated Option shall initially be equal to the number of performance units or performance shares subject to the award, but one share of Common Stock shall be canceled for each performance unit or performance share paid out under the award.
(2) Option Price. The purchase price per share of Common Stock purchasable under an option will be determined by the Committee but will be not less than the Fair Market Value of a share of Common Stock on the date of the grant of such option.
(3) Option Period. The period of each option shall be fixed by the Committee, but no option shall be exercisable after the expiration of ten years from the date the option is granted.
(4) Consideration. Each optionee, as consideration for the grant of an option, shall remain in the continuous employ of the Company or of one of its Subsidiaries or Affiliates for at least one year from the date of the granting of such option, and no option shall be exercisable until after the completion of such one year period of employment by the optionee.
E-1-3

(5) Exercise of Option. An option may be exercised in whole or in part from time to time during the option period (or, if determined by the Committee, in specified installments during the option period) by giving written notice of exercise to the Company specifying the number of shares to be purchased, such notice to be accompanied by payment in full of the purchase price and Withholding Taxes (as defined in Section 11 hereof), unless an election to defer receipt of shares is made under Section 12, due either by certified or bank check, or in shares of Common Stock of the Company owned by the optionee having a Fair Market Value at the date of exercise equal to such purchase price, or in a combination of the foregoing; provided, however, that payment in shares of Common Stock of the Company will not be permitted unless at least 100 shares of Common Stock are required and delivered for such purpose. No shares shall be issued until full payment therefor has been made. An optionee shall have the rights of a stockholder only with respect to shares of stock for which certificates have been issued to the optionee.
(6) Nontransferability of Options. No option or stock appreciation right granted under the Plan shall be transferable by the optionee otherwise than by will or by the laws of descent and distribution, and such option or stock appreciation right shall be exercisable, during the optionee's lifetime, only by the optionee. Notwithstanding the foregoing, the Committee may set forth in a Stock Option Agreement at the time of grant or thereafter, that the options (other than Incentive Stock Options) may be transferred to members of the optionee's immediate family, to trusts solely for the benefit of such immediate family members and to partnerships in which such family members and/or trusts are the only partners. For this purpose, immediate family means the optionee's spouse, parents, children, stepchildren, grandchildren and legal dependants. Any transfer of options made under this provision will not be effective until notice of such transfer is delivered to the Company.
(7) Retirement and Termination of Employment Other than by Death or Disability. If an optionee shall cease to be employed by the Company or any of its Subsidiaries or Affiliates for any reason (other than termination of employment by reason of death or Disability) after the optionee shall have been continuously so employed for one year after the granting of the option, the option shall be exercisable only to the extent that the optionee was otherwise entitled to exercise it at the time of such cessation of employment with the Company, Subsidiary or Affiliate, but in no event after the expiration of the option period set forth therein except that in the case of cessation of employment other than by reason of Retirement or death, the option shall in no event be exercisable after the date three months next succeeding such cessation of employment. The Plan does not confer upon any optionee any right with respect to continuation of employment by the Company or any of its Subsidiaries or Affiliates.
(8) Disability of Optionee. An optionee who ceases to be employed by reason of Disability shall be treated as though the optionee remained in the employ of the Company or a Subsidiary or Affiliate until the earlier of (i) cessation of payments under a disability pay plan of the Company, Subsidiary or Affiliate, (ii) the optionee's death, or (iii) the optionee's 65th birthday.
(9) Death of Optionee. Except as otherwise provided in subsection (13), in the event of the optionee's death (i) while in the employ of the Company or any of its Subsidiaries or Affiliates, (ii) while Disabled as described in subsection (8) or (iii) after cessation of employment due to Retirement, the option shall be fully exercisable by the executors, administrators, legatees or distributees of the optionee's estate, as the case may be, at any time following such death. In the event of the optionee's death after cessation of employment for any reason other than Disability or Retirement, the option shall be exercisable by the executors, administrators, legatees or distributees of the optionee's estate, as the case may be, at any time during the twelve month period following such death. Notwithstanding the foregoing, in no event shall an option be exercisable unless the optionee shall have been continuously employed by the Company or any of its Subsidiaries or Affiliates for a period of at least one year after the option grant, and no option shall be exercisable after the expiration of the option period set forth in the Stock Option Agreement. In the event
E-1-4

any option is exercised by the executors, administrators, legatees or distributees of the estate of a deceased optionee, the Company shall be under no obligation to issue stock thereunder unless and until the Company is satisfied that the person or persons exercising the option are the duly appointed legal representatives of the deceased optionee's estate or the proper legatees or distributees thereof.
(10) Long-Term Performance Awards. The Committee may from time to time grant nonqualified stock options under the Plan in conjunction with and related to an award of performance units or performance shares made under a Long-Term Performance Award as set forth in Section
7(b)(11). In such event, notwithstanding any other provision hereof,
(i) the number of shares to which the Associated Option applies shall initially be equal to the number of performance units or performance shares granted by the award, but such number of shares shall be reduced on a one-share-for-one unit or share basis to the extent that the Committee determines pursuant to the terms of the award, to pay to the optionee or the optionee's beneficiary the performance units or performance shares granted pursuant to such award; and (ii) such Associated Option shall be cancelable in the discretion of the Committee, without the consent of the optionee, under the conditions and to the extent specified in the award.
(11) Stock Appreciation Rights. In the case of any option granted under the Plan, either at the time of grant or by amendment of such option at any time after such grant there may be included a stock appreciation right which shall be subject to such terms and conditions, not inconsistent with the Plan, as the Committee shall impose, including the following:
(A) A stock appreciation right shall be exercisable to the extent, and only to the extent, that the option in which it is included is at the time exercisable, and may be exercised within such period only at such time or times as may be determined by the Committee;
(B) A stock appreciation right shall entitle the optionee (or any person entitled to act under the provisions of subsection (9) hereof) to surrender unexercised the option in which the stock appreciation right is included (or any portion of such option) to the Company and to receive from the Company in exchange therefor that number of shares having an aggregate value equal to (or, in the discretion of the Committee, less than) the excess of the value of one share (provided such value does not exceed such multiple of the option price per share as may be specified by the Committee) over the option price per share specified in such option times the number of shares called for by the option, or portion thereof, which is so surrendered. The Committee shall be entitled to cause the Company to settle its obligation, arising out of the exercise of a stock appreciation right, by the payment of cash equal to the aggregate value of the shares the Company would otherwise be obligated to deliver or partly by the payment of cash and partly by the delivery of shares. Any such election shall be made within 30 business days after the receipt by the Committee of written notice of the exercise of the stock appreciation right. The value of a share for this purpose shall be the Fair Market Value thereof on the last business day preceding the date of the election to exercise the stock appreciation right;
(C) No fractional shares shall be delivered under this subsection
(11) but in lieu thereof a cash adjustment shall be made;
(D) If a stock appreciation right included in an option is exercised, such option shall be deemed to have been exercised to the extent of the number of shares called for by the option or portion thereof which is surrendered on exercise of the stock appreciation right and no new option may be granted covering such shares under this Plan; and
E-1-5

(E) If an option which includes a stock appreciation right is exercised, such stock appreciation right shall be deemed to have been canceled to the extent of the number of shares called for by the option or portion thereof is exercised and no new stock appreciation rights may be granted covering such shares under this Plan.
(12) Incentive Stock Options. In the case of any incentive stock option granted under the Plan, the aggregate Fair Market Value of the shares of Common Stock of the Company (determined at the time of grant of each option) with respect to which incentive stock options granted under the Plan and any other plan of the Company or its parent or a Subsidiary which are exercisable for the first time by an employee during any calendar year shall not exceed $100,000 or such other amount as may be required by the Code. In any year, the maximum number of shares with respect to which incentive stock options may be granted shall not exceed 4,000,000 shares.
(13) Rights of Transferee. Notwithstanding anything to the contrary herein, if an option has been transferred in accordance with Section 6(b)(6), the option shall be exercisable solely by the transferee. The option shall remain subject to the provisions of the Plan, including that it will be exercisable only to the extent that the optionee or optionee's estate would have been entitled to exercise it if the optionee had not transferred the option. In the event of the death of the optionee prior to the expiration of the right to exercise the transferred option, the period during which the option shall be exercisable will terminate on the date one year following the date of the optionee's death. In the event of the death of the transferee prior to the expiration of the right to exercise the option, the period during which the option shall be exercisable by the executors, administrators, legatees and distributees of the transferee's estate, as the case may be, will terminate on the date one year following the date of the transferee's death. In no event will be the option be exercisable after the expiration of the option period set forth in the Stock Option Agreement. The option shall be subject to such other rules as the Committee shall determine.
7. Long-term Performance Awards: Awards under the Plan shall consist of the conditional grant to the participants of a specified number of performance units or performance shares. The conditional grant of a performance unit to a participant will entitle the participant to receive a specified dollar value, variable under conditions specified in the award, if the performance objectives specified in the award are achieved and the other terms and conditions thereof are satisfied. The conditional grant of a performance share to a participant will entitle the participant to receive a specified number of shares of Common Stock of the Company, or the equivalent cash value, if the objective(s) specified in the award are achieved and the other terms and conditions thereof are satisfied.
Each award will be subject to the following terms and conditions:
(a) Grant of Awards. The Committee shall (1) select the officers and key executives of the Company and its Subsidiaries and Affiliates to whom awards may from time to time be granted, (2) determine the number of performance units or performance shares covered by each award, (3) determine the terms and conditions of each performance unit or performance share awarded and the award period and performance objectives with respect to each award, (4) determine the periods during which a participant may request the Committee to approve deferred payment of a percentage (not less than 25%) of an award (the "Deferred Portion") and the interest or rate of return thereon or the basis on which such interest or rate of return thereon is to be determined, (5) determine whether payment with respect to the portion of an award which has not been deferred (the "Current Portion") and the payment with respect to the Deferred Portion of an award shall be made entirely in cash, entirely in Common Stock or partially in cash and partially in Common Stock, (6) determine whether the award is to be made independently of or in conjunction with a nonqualified stock option granted under the Plan, and (7) prescribe the form of the instruments necessary or advisable in the administration of the awards.
E-1-6

(b) Terms and Conditions of Award. Any award conditionally granting performance units or performance shares to a participant shall be evidenced by a Performance Unit Agreement or Performance Share Agreement, as applicable, executed by the Company and the participant, in such form as the Committee shall approve, which Agreement shall contain in substance the following terms and conditions applicable to the award and such additional terms and conditions as the Committee shall prescribe:
(1) Number and Value of Performance Units. The Performance Unit Agreement shall specify the number of performance units conditionally granted to the participant. If the award has been made in conjunction with the grant of an Associated Option, the number of performance units granted shall initially be equal to the number of shares which the participant is granted the right to purchase pursuant to the Associated Option, but one performance unit shall be canceled for each share of the Company's Common Stock purchased upon exercise of the Associated Option or for each stock appreciation right included in such option that has been exercised. The Performance Unit Agreement shall specify the threshold, target and maximum dollar values of each performance unit and corresponding performance objectives as provided under
Section 6(b)(5). No payout under a performance unit award to an individual Participant may exceed 0.15% of the pre-tax earnings of the Company for the fiscal year which coincides with the final year of the performance unit period.
(2) Number and Value of Performance Shares. The Performance Share Agreement shall specify the number of performance shares conditionally granted to the participant. If the award has been made in conjunction with the grant of an Associated Option, the number of performance shares granted shall initially be equal to the number of shares which the participant is granted the right to purchase pursuant to the Associated Option, but one performance share shall be canceled for each share of the Company's Common Stock purchased upon exercise of the Associated Option or for each stock appreciation right included in such option that has been exercised. The Performance Share Agreement shall specify that each Performance Share will have a value equal to one (1) share of Common Stock of the Company.
(3) Award Periods. For each award, the Committee shall designate an award period with a duration to be determined by the Committee in its discretion but in no event less than three calendar years within which specified performance objectives are to be attained. There may be several award periods in existence at any one time and the duration of performance objectives may differ from each other.
(4) Consideration. Each participant, as consideration for the award of performance units or performance shares, shall remain in the continuous employ of the Company or of one of its Subsidiaries or Affiliates for at least one year after the date of the making of such award, and no award shall be payable until after the completion of such one year of employment by the participant.
(5) Performance Objectives. The Committee shall establish performance objectives with respect to the Company for each award period on the basis of such criteria and to accomplish such objectives as the Committee may from time to time determine. Performance criteria for awards under the Plan may include one or more of the following measures of the operating performance:

a. Earnings                        d. Financial return ratios
b. Revenue                         e. Total Shareholder Return
c. Operating or net cash flows     f. Market share	

E-1-7

The Committee shall establish the specific targets for the selected criteria. These targets may be set at a specific level or may be expressed as relative to the comparable measure at comparison companies or a defined index. These targets may be based upon the total Company or upon a defined business unit which the executive has responsibility for or influence over.
(6) Determination and Payment of Performance Units or Performance Shares Earned. As soon as practicable after the end of an award period, the Committee shall determine the extent to which awards have been earned on the basis of the Company's actual performance in relation to the established performance objectives as set forth in the Performance Unit Agreement or Performance Share Agreement and certify these results in writing. The Performance Unit Agreement or Performance Share Agreement shall specify that as soon as practicable after the end of each award period, the Committee shall determine whether the conditions of Sections 7(b)(4) and 7(b)(5) hereof have been met and, if so, shall ascertain the amount payable or shares which should be distributed to the participant in respect of the performance units or performance shares. As promptly as practicable after it has determined that an amount is payable or should be distributed in respect of an award, the Committee shall cause the Current Portion of such award to be paid or distributed to the participant or the participant's beneficiaries, as the case may be, in the Committee's discretion, either entirely in cash, entirely in Common Stock or partially in cash and partially in Common Stock. The Deferred Portion of an award shall be contingently credited and payable to the participant over a deferred period and shall be credited with interest, rate of return, or other valuation as determined by the Committee. The Committee, in its discretion, shall determine the conditions upon, and method of, payment of such Deferred Portions and whether such payment will be made entirely in cash, entirely in Common Stock or partially in cash and partially in Common Stock.
In making the payment of an award in Common Stock hereunder, the cash equivalent of such Common Stock shall be determined by the Fair Market Value of the Common Stock on the day the Committee designates the performance units shall be payable.
(7) Nontransferability of Awards and Designation of Beneficiaries. No award under this Section of the Plan shall be transferable by the participant other than by will or by the laws of descent and distribution, except that a participant may designate a beneficiary pursuant to the provisions hereof.
If any participant or the participant's beneficiary shall attempt to assign the participant's rights under the Plan in violation of the provisions thereof, the Company's obligation to make any further payments to such participant or the participant's beneficiaries shall forthwith terminate.
A participant may name one or more beneficiaries to receive any payment of an award to which the participant may be entitled under the Plan in the event of the participant's death, on a form to be provided by the Committee. A participant may change the participant's beneficiary designation from time to time in the same manner.
If no designated beneficiary is living on the date on which any payment becomes payable to a participant's beneficiary, or if no beneficiary has been specified by the participant, such payment will be payable to the person or persons in the first of the following classes of successive preference:
(i) Widow or widower, if then living,
(ii) Surviving children, equally,
(iii) Surviving parents, equally,
(iv) Surviving brothers and sisters, equally,
(v) Executors or administrators
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and the term "beneficiary" as used in the Plan shall include such person or persons.
(8) Retirement and Termination of Employment Other Than by Death or Disability. In the event of the Retirement prior to the end of an award period of a participant who has satisfied the one year employment requirement of Section 7(b)(4) with respect to an award prior to Retirement, the participant, or his estate, shall be entitled to a payment of such award at the end of the award period, pursuant to the terms of the Plan and the participant's Performance Unit Agreement or Performance Share Agreement, provided, however, that the participant shall be deemed to have earned that proportion (to the nearest whole unit or share) of the value of the performance units or performance shares granted to the participant under such award as the number of months of the award period which have elapsed since the first day of the calendar year in which the award was made to the end of the month in which the participant's Retirement occurs, bears to the total number of months in the award period, subject to the attainment of performance objectives associated with the award as certified by the Committee. The participant's right to receive any remaining performance units or performance shares shall be canceled and forfeited.
Subject to Section 7(b)(6) hereof, the Performance Unit Agreement or Performance Share Agreement shall specify that the right to receive the performance units or performance shares granted to such participant shall be conditional and shall be canceled, forfeited and surrendered if the participant's continuous employment with the Company and its Subsidiaries and Affiliates shall terminate for any reason, other than the participant's death, Disability or Retirement prior to the end of the award period.
(9) Disability of Participant. For the purposes of any award a participant who becomes Disabled shall be deemed to have suspended active employment by reason of Disability commencing on the date the participant becomes entitled to receive payments under a disability pay plan of the Company or any Subsidiary or Affiliate and continuing until the date the participant is no longer entitled to receive such payments. In the event a participant becomes Disabled during an award period but only if the participant has satisfied the one year employment requirement of Section 7(b)(4) with respect to an award prior to becoming Disabled, upon the determination by the Committee of the extent to which an award has been earned pursuant to Section 7(b)(6) the participant shall be deemed to have earned that proportion (to the nearest whole unit) of the value of the performance units granted to the participants under such award as the number of months of the award period in which the participant was not Disabled bears to the total number of months in the award period subject to the attainment of the performance objectives associated with the award as certified by the Committee. The participant's right to receive any remaining performance units shall be canceled and forfeited.
(10) Death of Participant. In the event of the death prior to the end of an award period of a participant who has satisfied the one year employment requirement with respect to an award prior to the date of death, the participant's beneficiaries or estate, as the case may be, shall be entitled to a payment of such award upon the end of the award period, pursuant to the terms of the Plan and the participant's Performance Unit Agreement or Performance Share Agreement, provided, however, that the participant shall be deemed to have earned that proportion (to the nearest whole unit or share) of the value of the performance units or performance shares granted to the participant under such award as the number of months of the award period which have elapsed since the first day of the calendar year in which the award was made to the end of the month in which the participant's death occurs, bears to the total number of months in the award period. The participant's right to receive any remaining performance units or performance shares shall be canceled and forfeited.
The Committee may, in its discretion, waive, in whole or in part, such cancellation and forfeiture of any performance units or performance shares.
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(11) Grant of Associated Option. If the Committee determines that the conditional grant of performance units or performance shares under the Plan is to be made to a participant in conjunction with the grant of a nonqualified stock option under the Plan, the Committee shall grant the participant an Associated Option under the Plan subject to the terms and conditions of this subsection (11). In such event, such award under the Plan shall be contingent upon the participant's being granted such an Associated Option pursuant to which: (i) the number of shares the optionee may purchase shall initially be equal to the number of performance units or performance shares conditionally granted by the award, (ii) such number of shares shall be reduced on a one-share-for-one-unit or share basis to the extent that the Committee determines, pursuant to Section 7(b)(6) hereof, to pay to the participant or the participant's beneficiaries the performance units or performance shares conditionally granted pursuant to the award, and (iii) the Associated Option shall be cancelable in the discretion of the Committee, without the consent of the participant, under the conditions and to the extent specified herein and in Section 7(b)(6) hereof.
If no amount is payable in respect of the conditionally granted performance units or performance shares, the award and such performance units or performance shares shall be deemed to have been canceled, forfeited and surrendered, and the Associated Option, if any, shall continue in effect in accordance with its terms. If any amount is payable in respect of the performance units or performance shares and such units or shares were granted in conjunction with an Associated Option, the Committee shall, within 30 days after the determination of the Committee referred to in the first sentence of Section 7(b)(6), determine, in its sole discretion, either:
(a) to cancel in full the Associated Option, in which event the value of the performance units or performance shares payable pursuant to Sections 7(b)(5) and (6) shall be paid or the performance shares shall be distributed;
(b) to cancel in full the performance units or performance shares, in which event no amount shall be paid to the participant in respect thereof and no shares shall be distributed but the Associated Option shall continue in effect in accordance with its terms; or
(c) to cancel some, but not all, of the performance units or performance shares, in which event the value of the performance units payable pursuant to Sections 7(b)(5) and (6) which have not been canceled shall be paid and/or the performance shares shall be distributed and the Associated Option shall be canceled with respect to that number of shares equal to the number of conditionally granted performance units or performance shares that remain payable.
Any action taken by the Committee pursuant to the preceding sentence shall be uniform with respect to all awards having the same award period. If the Committee takes no such action, it shall be deemed to have determined to cancel in full the award in accordance with clause (b) above.
8. Restricted Stock: Restricted stock awards under the Plan shall consist of grants of shares of Common Stock of the Issuer subject to the terms and conditions hereinafter provided.
(a) Grant of Awards: The Committee shall (i) select the officers and key employees to whom Restricted Stock may from time to time be granted,
(ii) determine the number of shares to be covered by each award granted,
(iii) determine the terms and conditions (not inconsistent with the Plan) of any award granted hereunder, and (iv) prescribe the form of the agreement, legend or other instrument necessary or advisable in the administration of awards under the Plan.
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(b) Terms and Conditions of Awards: Any restricted stock award granted under the Plan shall be evidenced by a Restricted Stock Agreement executed by the Issuer and the recipient, in such form as the Committee shall approve, which agreement shall be subject to the following terms and conditions and shall contain such additional terms and conditions not inconsistent with the Plan as the Committee shall prescribe:
(1) Number of Shares Subject to an Award: The Restricted Stock Agreement shall specify the number of shares of Common Stock subject to the Award.
(2) Restriction Period: The period of restriction applicable to each Award shall be established by the Committee but may not be less than one year. The Restriction Period applicable to each Award shall commence on the Award Date.
(3) Consideration: Each recipient, as consideration for the grant of an award, shall remain in the continuous employ of the Company for at least one year from the date of the granting of such award, and any shares covered by such an award shall lapse if the recipient does not remain in the continuous employ of the Company for at least one year from the date of the granting of the award.
(4) Restriction Criteria: The Committee shall establish the criteria upon which the restriction period shall be based. Restrictions may be based upon either the continued employment of the recipient or upon the attainment by the Company of one or more of the following measures of the operating performance:

a. Earnings                         d. Financial return ratios
b. Revenue                          e. Total Shareholder Return
c. Operating or net cash flows      f. Market share	

The Committee shall establish the specific targets for the selected criteria. These targets may be set at a specific level or may be expressed as relative to the comparable measure at comparison companies or a defined index. Performance objectives may be established in combination with restrictions based upon the continued employment of the recipient. These targets may be based upon the total Company or upon a defined business unit which the executive has responsibility for or influence over.
In cases where objective performance criteria are established, the Committee shall determine the extent to which the criteria have been achieved and the corresponding level to which restrictions will be removed from the Award or the extent to which a participant's right to receive an Award should be lapsed in cases where the performance criteria have not been met and shall certify these determinations in writing. The Committee may provide for the determination of the attainment of such restrictions in installments where deemed appropriate.
(c) Terms and Conditions of Restrictions and Forfeitures: The shares of Common Stock awarded pursuant to the Plan shall be subject to the following restrictions and conditions:
(1) During the Restriction Period, the participant will not be permitted to sell, transfer, pledge or assign Restricted Stock awarded under this Plan.
(2) Except as provided in Section 8(c)(i), or as the Committee may otherwise determine, the participant shall have all of the rights of a stockholder of the Issuer, including the right to vote the shares and receive dividends and other distributions provided that distributions in the form of stock shall be subject to the same restrictions as the underlying Restricted Stock.
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(3) In the event of a participant's retirement, death or disability prior to the end of the Restriction Period for a participant who has satisfied the one year employment requirement of Section 7(c)(iii) with respect to an award prior to Retirement, death or Disability, the participant, or his/her estate, shall be entitled to receive that proportion (to the nearest whole share) of the number of shares subject to the Award granted as the number of months of the Restriction Period which have elapsed since the Award date to the date at which the participant's retirement, death or disability occurs, bears to the total number of months in the Restriction Period. The participant's right to receive any remaining shares shall be canceled and forfeited and the shares will be deemed to be reacquired by the Issuer.
(4) In the event of a participant's retirement, death, disability or in cases of special circumstances as determined by the Committee, the Committee may, in its sole discretion when it finds that such an action would be in the best interests of the Company, accelerate or waive in whole or in part any or all remaining time based restrictions with respect to all or part of such participant's Restricted Stock.
(5) Upon termination of employment for any reason during the restriction period, subject to the provisions of paragraph (iii) above or in the event that the participant fails promptly to pay or make satisfactory arrangements as to the withholding taxes as provided in the following paragraph, all shares still subject to restriction shall be forfeited by the participant and will be deemed to be reacquired by the Company.
(6) A participant may, at any time prior to the expiration of the Restriction Period, waive all right to receive all or some of the shares of a Restricted Stock Award by delivering to the Company a written notice of such waiver.
(7) Notwithstanding the other provisions of this Section 7, the Committee may adopt rules which would permit a gift by a participant of restricted shares to members of his/her immediate family (spouse, parents, children, stepchildren, grandchildren or legal dependants) or to a Trust whose beneficiary or beneficiaries shall be either such a person or persons or the participant.
(8) Any attempt to dispose of Restricted Stock in a manner contrary to the restrictions shall be ineffective.
9. Determination of Breach of Conditions: The determination of the Committee as to whether an event has occurred resulting in a forfeiture or a termination or reduction of the Company's obligations in accordance with the provisions of the Plan shall be conclusive.
10. Adjustment in the Event of Change in Stock: In the event of changes in the outstanding Common Stock of the Company by reason of stock dividends, recapitalization, mergers, consolidations, split-ups, combinations or exchanges of shares and the like, the aggregate number and class of shares available under the Plan, and the number, class and the price of shares subject to outstanding options and/or awards and the number of performance units and/or the dollar value of each unit shall be appropriately adjusted by the Committee, whose determination shall be conclusive.
11. Taxes: Each participant shall, no later than the Tax Date (as defined below), pay to the Company, or make arrangements satisfactory to the Committee regarding payment of, any Withholding Tax (as defined below) with respect to an Option or Award, and the Company shall, to the extent permitted by law, have the right to deduct such amount from any payment of any kind otherwise due to the participant. The Company shall also have the right to retain or sell without notice, or to demand surrender of, shares of Common Stock in value sufficient to cover the amount of any Withholding Tax (that is that portion of any Applicable Tax, as defined below, required by any governmental entity to be withheld or otherwise deducted and paid with respect to such Award), and to make payment (or to reimburse itself for payment made) to the appropriate taxing authority of an amount in cash equal to the amount of such
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Withholding Tax, remitting any balance to the participant. For purposes of the paragraph, the value of shares of Common Stock so retained or surrendered shall be the average of the high and low sales prices per share on the New York Stock Exchange composite tape on the date that the amount of the Withholding Tax is to be determined (the "Tax Date") and the value of shares of Common Stock so sold shall be the actual net sale price per share (after deduction of commissions) received by the Company. Notwithstanding the foregoing, if the stock options have been transferred, the optionee shall provide the Company with funds sufficient to pay such Withholding Tax or Applicable Tax. Furthermore, if such optionee does not satisfy his tax payment obligation and the stock options have been transferred, the transferee may provide the funds sufficient to enable the Company to pay such taxes. However, if the stock options have been transferred, the Company shall have no right to retain or sell without notice, or to demand surrender from the transferee of, shares of Common Stock in order to pay such Withholding Tax or Applicable Tax.
Notwithstanding the foregoing, the participant shall be entitled to satisfy the obligation to pay any Withholding Tax or to satisfy the obligation to pay any tax to any governmental entity in respect of such Award, including any Federal, state or local income tax up to an amount determined on the basis of the highest marginal tax rate applicable to such participant, Federal Insurance Contribution Act taxes or other governmental impost or levy (an "Applicable Tax"), in whole or in part, by providing the Company with funds sufficient to enable the Company to pay such Withholding Tax or Applicable Tax or by requiring the Company to retain or to accept upon delivery thereof by the participant shares of Common Stock having a Fair Market Value sufficient to cover the amount of such Withholding Tax or Applicable Tax or in a greater amount as deemed appropriate by the Company. Each election by a participant to have shares retained or to deliver shares for this purpose shall be subject to the following restrictions: (i) the election must be in writing and be made on or prior to the Tax Date; (ii) the election must be irrevocable; (iii) the election shall be subject to the disapproval of the Committee.
12. Deferral Election: Notwithstanding the provisions of Section 11, any optionee or participant may elect, with the concurrence of the Committee and consistent with any rules and regulations established by the Committee, to defer the delivery of the proceeds of the exercise of any stock option not transferred under the provisions of Section 6(b)(6) or stock appreciation rights.
(a) Election Timing: The election to defer the delivery of the proceeds from any eligible award must be made at least six months prior to the date such award is exercised or at such other time as the Committee may specify. Deferrals will only be allowed for exercises which occur while the optionee or participant is an active employee of the Company. Any election to defer the delivery of proceeds from an eligible award shall be irrevocable as long as the optionee or participant remains an employee of the Company.
(b) Stock Option Deferral: The deferral of the proceeds of stock options may be elected by an optionee subject to the Regulations established by the Committee. The proceeds from such an exercise shall be credited to the optionee's deferred stock option account as the number of deferred share units equivalent in value to those proceeds. Deferred share units shall be valued at the Fair Market Value on the date of exercise. Subsequent to exercise, the deferred share units shall be valued at the Fair Market Value of Common Stock of the Company. Deferred share units shall accrue dividends at the rate paid upon the Company's Common Stock credited in the form of additional deferred share units. Deferred share units shall be distributed in shares of Company Stock upon the termination of employment of the participant or at such other date as may be approved by the Committee over a period of no more than 10 years.
(c) Stock Appreciation Right Deferral: Upon such exercise, the Company will credit the optionee's deferred stock option account with the number of deferred share units equivalent in value to the difference between the Fair Market Value of a share of Common Stock on the exercise date and the exercise price of the Stock Appreciation Right multiplied by the number of shares exercised. Deferred share units shall be valued at the Fair Market Value on the date of exercise. Subsequent to exercise,
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the deferred share units shall be valued at the Fair Market Value of Common Stock of the Company. Deferred share units shall accrue dividends at the rate paid upon the Company's Common Stock credited in the form of additional deferred share units. Deferred share units shall be distributed in shares of Common Stock upon the termination of employment of the participant or at such other date as may be approved by the Committee over a period of no more than 10 years.
(d) Accelerated Distributions: The Committee may, at its sole discretion, allow for the early payment of an optionee's or participant's deferred share units account in the event of an "unforeseeable emergency" or in the event of the death or disability of the optionee or participant. An "unforeseeable emergency" is defined as an unanticipated emergency caused by an event beyond the control of the optionee or participant that would result in severe financial hardship if the distribution were not permitted. Such distributions shall be limited to the amount necessary to sufficiently address the financial hardship. Any distributions under this provision shall be consistent with the Regulations established under the Code. Additionally, the Committee may use its discretion to cause deferred share unit accounts to be distributed when continuing the Program is no longer in the best interest of the Company.
(e) Assignability: No rights to deferred share unit accounts may be assigned or subject to any encumbrance, pledge or charge of any nature except that an optionee or participant may designate a beneficiary pursuant to any rules established by the Committee.
13. Amendment of the Plan: The Board of Directors may amend or suspend the Plan at any time and from time to time. No such amendment of the Plan may, however, increase the maximum number of shares to be offered under options or awards, or change the manner of determining the option price, or change the designation of employees or class of employees eligible to receive options or awards, or permit the transfer or issue of stock before payment therefor in full, or, without the written consent of the optionee or participant, alter or impair any option or award previously granted under the Plan or Prior Plan. Notwithstanding the foregoing, if an option has been transferred in accordance with Section 6(b)(6), written consent of the transferee (and not the optionee) shall be necessary to alter or impair any option or award previously granted under the Plan.
14. Miscellaneous:
(a) By accepting any benefits under the Plan, each optionee or participant and each person claiming under or through such optionee or participant shall be conclusively deemed to have indicated acceptance and ratification of, and consent to, any action taken or made to be taken or made under the Plan by the Company, the Board, the Committee or any other Committee appointed by the Board.
(b) No participant or any person claiming under or through him shall have any right or interest, whether vested or otherwise, in the Plan or in any option, or stock appreciation right or award thereunder, contingent or otherwise, unless and until all of the terms, conditions and provisions of the Plan and the Agreement that affect such participant or such other person shall have been complied with.
(c) Nothing contained in the Plan or in any Agreement shall require the Company to segregate or earmark any cash or other property.
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(d) Neither the adoption of the Plan nor its operation shall in any way affect the rights and powers of the Company or any of its Subsidiaries or Affiliates to dismiss and/or discharge any employee at any time.
(e) Notwithstanding anything to the contrary in the Plan, neither the Board nor the Committee shall have any authority to take any action under the Plan where such action would affect the Company's ability to account for any business combination as a "pooling of interests."
15. Term of the Plan: The Plan, if approved by stockholders, will be effective May 6, 1997. The Plan shall expire on May 31, 2002 unless suspended or discontinued by action of the Board of Directors. The expiration of the Plan, however, shall not affect the rights of Optionees under options theretofore granted to them or the rights of participants under awards theretofore granted to them, and all unexpired options and awards shall continue in force and operation after termination of the Plan except as they may lapse or be terminated by their own terms and conditions.
E-1-15

BRISTOL-MYERS SQUIBB COMPANY
1983 STOCK OPTION PLAN
 (as amended effective as of November 3, 1998)
1. Purpose: The purpose of the 1983 Stock Option Plan (as amended effective as of November 3, 1998) (the "Plan") is to secure for the Company and its stockholders the benefits of the incentive inherent in common stock ownership by the officers and key employees of the Company and its Subsidiaries and Affiliates who will be largely responsible for the Company's future growth and continued financial success and by providing long-term incentives in addition to current compensation to certain key executives of the Company and its Subsidiaries and Affiliates who contribute significantly to the long-term performance and growth of the Company and such Subsidiaries and Affiliates. It is intended that the former purpose will be effected through the grant of stock options and stock appreciation rights under the Plan and that the latter purpose will be effected through an award conditionally granting performance units under the Plan, either independently or in conjunction with and related to a nonqualified stock option grant under the Plan. The Bristol-Myers Squibb Company Long-Term Performance Award Plan (as amended to January 17, 1983 and in effect as of December 31, 1992) ("LTPAP") has been merged into and consolidated with the Plan as of January 1, 1993. As used herein, the term "Prior Plan" shall mean the Bristol-Myers Squibb Company 1983 Stock Option Plan (as amended through May 1, 1991 and in effect as of December 31, 1992) prior to its amendment and restatement as of January 1, 1993.
2. Definitions: For purposes of this Plan:
(a) "Affiliate" shall mean any entity in which the Company has an ownership interest of at least 20%.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" shall mean the Company's common stock (par value $.10 per share).
(d) "Company" shall mean Bristol-Myers Squibb Company.
(e) "Disability" or "Disabled" shall mean qualifying for and receiving payments under a disability pay plan of the Company or any Subsidiary or Affiliate.
(f) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
(g) "Fair Market Value" shall mean the average of the high and low sale prices of a share of Common Stock on the New York Stock Exchange, Inc. composite tape on the date of measurement or on any date as determined by the Committee and if there were no trades on such date, on the day on which a trade occurred next preceding such date.
(h) "Retirement" shall mean termination of the employment of an employee with the Company or a Subsidiary or Affiliate on or after (i) the employee's 65th birthday or (ii) the employee's 55th birthday if the employee has completed 10 years of service with the Company, its Subsidiaries and/or its Affiliates. For purposes of this Section 2(h) and all other purposes of this Plan, Retirement shall also mean termination of employment of an employee with the Company or a Subsidiary or Affiliate for any reason (other than the employee's death, disability, resignation, willful misconduct or activity deemed detrimental to the interests of the Company) where, on termination, the employee's age plus years of service (rounded up to the next higher whole number) equals at least 70 and the employee has completed 10 years of service with the Company, its Subsidiaries and/or its Affiliates.
Furthermore, an employee who makes an election to retire under Article 19 of the Bristol-Myers Squibb Company Retirement Income Plan (the "Retirement Income Plan") shall have any additional years of age and service which are credited under Article 19 of the Retirement Income Plan taken into account when determining such employee's age and service under this Section 2(h). Such election shall be deemed a Retirement for purposes of this Section 2(h) and all other purposes of this Plan.
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(i) "Subsidiary" shall mean any corporation which at the time qualifies as a subsidiary of the Company under the definition of "subsidiary corporation" in Section 424 of the Code.
3. Amount of Stock: The amount of stock which may be made subject to grants of options or awards of performance units under the Plan in calendar year 1993 shall not exceed an amount equal to (i) 0.9% of the outstanding shares of the Company's Common Stock on January 1, 1993, plus (ii) the amount of shares available for, and not made subject to, grants of options under the Prior Plan as of January 1, 1993, less (iii) the number of shares subject to options granted in 1993 under the Prior Plan and (iv) the number of shares corresponding to awards of performance units outstanding under the LTPAP on the date the Plan is approved by the stockholders of the Company. With respect to each succeeding year, the amount of stock which may be made subject to grants of options or awards of performance units under the Plan shall not exceed an amount equal to (i) 0.9% of the outstanding shares of the Company's Common Stock on January 1 of such year plus, subject to this Section 3, (ii) in any year the number of shares equal to the amount of shares that were available for grants and awards in the prior year but were not made subject to a grant or award in such prior year and (iii) the number of shares that were subject to options or awards granted hereunder or under the Prior Plan, which options or awards terminated or expired in the prior year without being exercised. Common Stock issued hereunder may be authorized and reissued shares or issued shares acquired by the Company or its Subsidiaries on the market or otherwise.
4. Administration: The Plan shall be administered under the supervision of the Board of Directors of the Company which shall exercise its powers, to the extent herein provided, through the agency of a Compensation and Management Development Committee (the "Committee") which shall be appointed by the Board of Directors of the Company and shall consist of not less than three directors who shall serve at the pleasure of the Board. No member of the Committee shall have been within one year prior to appointment to, or while serving on, the Committee granted or awarded equity securities of the Company pursuant to this or any other plan of the Company or its Subsidiaries or Affiliates except to the extent that participation in any such plan or receipt of any such grant or award would not adversely affect the Committee member's status as a non-employee director for purposes of Rule 16b-3 under the Exchange Act.
The Committee, from time to time, may adopt rules and regulations for carrying out the provisions and purposes of the Plan and make such other determinations, not inconsistent with the terms of the Plan, as the Committee shall deem appropriate. The interpretation and construction of any provision of the Plan by the Committee shall, unless otherwise determined by the Board of Directors, be final and conclusive.
The Committee shall maintain a written record of its proceedings. A majority of the Committee shall constitute a quorum, and the acts of a majority of the members present at any meeting at which a quorum is present, or acts unanimously approved in writing, shall be the acts of the Committee.
5. Eligibility: Options and awards may be granted only to present or future officers and key employees of the Company and its Subsidiaries and Affiliates, including Subsidiaries and Affiliates which become such after the adoption of the Plan. Any officer or key employee of the Company or of any such Subsidiary or Affiliate shall be eligible to receive one or more options or awards under the Plan. Any director who is not an officer or employee of the Company or one of its Subsidiaries or Affiliates and any member of the Committee, during the time of the member's service as such or thereafter, shall be ineligible to receive an option or award under the Plan. The adoption of this Plan shall not be deemed to give any officer or employee any right to an award or to be granted an option to purchase Common Stock of the Company, except to the extent and upon such terms and conditions as may be determined by the Committee.
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6. Stock Options: Stock options under the Plan shall consist of incentive stock options under Section 422 of the Code or nonqualified stock options (options not intended to qualify as incentive stock options), as the Committee shall determine. In addition, the Committee may grant stock appreciation rights in conjunction with an option, as set forth in Section 6(b)(11), or may grant awards in conjunction with an option, as set forth in Section
6(b)(10) (an "Associated Option").
Each option shall be subject to the following terms and conditions:
(a) Grant of Options. The Committee shall (1) select the officers and key employees of the Company and its Subsidiaries and Affiliates to whom options may from time to time be granted, (2) determine whether incentive stock options or nonqualified stock options, are to be granted, (3) determine the number of shares to be covered by each option so granted, (4) determine the terms and conditions (not inconsistent with the Plan) of any option granted hereunder (including but not limited to restrictions upon the options, conditions of their exercise, or on the shares of Common Stock issuable upon exercise thereof), (5) determine whether nonqualified stock options or incentive stock options granted under the Plan shall include stock appreciation rights and, if so, shall determine the terms and conditions thereof in accordance with Section 6(b)(11) hereof, (6) determine whether any nonqualified stock options granted under the Plan shall be Associated Options, and (7) prescribe the form of the instruments necessary or advisable in the administration of options.
(b) Terms and Conditions of Option. Any option granted under the Plan shall be evidenced by a Stock Option Agreement executed by the Company and the optionee, in such form as the Committee shall approve, which agreement shall be subject to the following terms and conditions and shall contain such additional terms and conditions not inconsistent with the Plan, and in the case of an incentive stock option not inconsistent with the provisions of the Code applicable to incentive stock options, as the Committee shall prescribe:
(1) Number of Shares Subject to an Option. The Stock Option Agreement shall specify the number of shares of Common Stock subject to the Agreement. If the option is an Associated Option, the number of shares of Common Stock subject to such Associated Option shall initially be equal to the number of performance units subject to the award, but one share of Common Stock shall be canceled for each performance unit paid out under the award.
(2) Option Price. The purchase price per share of Common Stock purchasable under an option will be determined by the Committee but will be not less than the Fair Market Value of a share of Common Stock on the date of the grant of such option.
(3) Option Period. The period of each option shall be fixed by the Committee, but no option shall be exercisable after the expiration of ten years from the date the option is granted.
(4) Consideration. Each optionee, as consideration for the grant of an option, shall remain in the continuous employ of the Company or of one of its Subsidiaries or Affiliates for at least one year from the date of the granting of such option, and no option shall be exercisable until after the completion of such one year period of employment by the optionee.
(5) Exercise of Option. An option may be exercised in whole or in part from time to time during the option period (or, if determined by the Committee, in specified installments during the option period) by giving written notice of exercise to the Company specifying the number of shares to be purchased, such notice to be accompanied by payment in full of the purchase price and Withholding Taxes (as defined in Section 10 hereof) due either by certified or bank check, or in shares of Common Stock of the Company owned by the optionee having a Fair Market Value at the date of exercise equal to such purchase price and Withholding Taxes due, or in a combination of the foregoing; provided, however, that payment in shares of Common Stock of the Company will not be permitted unless at least 100 shares of Common Stock are required and delivered for such purpose. No shares shall be issued until full payment therefor has been made. An optionee shall have the rights of a stockholder only with respect to shares of stock for which certificates have been issued to the optionee.
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(6) Nontransferability of Options. No option or stock appreciation right granted under the Plan shall be transferable by the optionee otherwise than by will or by the laws of descent and distribution, and such option or stock appreciation right shall be exercisable, during the optionee's lifetime, only by the optionee. Notwithstanding the foregoing, the Committee may set forth in a Stock Option Agreement at the time of grant or thereafter, that the options may be transferred to members of the optionee's immediate family, to trusts solely for the benefit of such immediate family members and to partnerships in which such family members and/or trusts are the only partners. For this purpose, immediate family members means the optionee's spouse, parents, children, stepchildren, grandchildren and legal dependents. Any transfer of options made under this provision will not be effective until notice of such transfer is delivered to the Company.
(7) Retirement and Termination of Employment Other than by Death or Disability. If an optionee shall cease to be employed by the Company or any of its Subsidiaries or Affiliates for any reason (other than termination of employment by reason of death or Disability) after the optionee shall have been continuously so employed for one year after the granting of the option, the option shall be exercisable only to the extent that the optionee was otherwise entitled to exercise it at the time of such cessation of employment with the Company, Subsidiary or Affiliate, but in no event after the expiration of the option period set forth therein except that in the case of cessation of employment other than by reason of Retirement or death, the option shall in no event be exercisable after the date three months next succeeding such cessation of employment. The Plan does not confer upon any optionee any right with respect to continuation of employment by the Company or any of its Subsidiaries or Affiliates.
(8) Disability of Optionee. An optionee who ceases to be employed by reason of Disability shall be treated as though the optionee remained in the employ of the Company or a Subsidiary or Affiliate until the earlier of (i) cessation of payments under a disability pay plan of the Company, Subsidiary or Affiliate, (ii) the optionee's death, or (iii) the optionee's 65th birthday.
(9) Death of Optionee. Except as otherwise provided in subsection (13), in the event of the optionee's death (i) while in the employ of the Company or any of its Subsidiaries or Affiliates, (ii) while Disabled as described in subsection (8) or (iii) after cessation of employment due to Retirement, the option shall be fully exercisable by the executors, administrators, legatees or distributees of the optionee's estate, as the case may be, at any time following such death. In the event of the optionee's death after cessation of employment for any reason other than Disability or Retirement, the option shall be exercisable by the executors, administrators, legatees or distributees of the optionee's estate, as the case may be, at any time during the twelve month period following such death. Notwithstanding the foregoing, in no event shall an option be exercisable unless the optionee shall have been continuously employed by the Company or any of its Subsidiaries or Affiliates for a period of at least one year after the option grant, and no option shall be exercisable after the expiration of the option period set forth in the Stock Option Agreement. In the event any option is exercised by the executors, administrators, legatees or distributees of the estate of a deceased optionee, the Company shall be under no obligation to issue stock thereunder unless and until the Company is satisfied that the person or persons exercising the option are the duly appointed legal representatives of the deceased optionee's estate or the proper legatees or distributees thereof.
(10) Long Term Performance Awards. The Committee may from time to time grant nonqualified stock options under the Plan in conjunction with and related to an award of performance units made under a Long Term Performance Award as set forth in Section 7(b)(11). In such event, notwithstanding any other provision hereof, (i) the number of shares to which the Associated Option applies shall initially be equal to the number of performance units granted by the award, but such number of shares shall be reduced on a one share-for-one unit basis to the extent that the Committee determines pursuant to the terms of the award, to pay to the optionee or the optionee's beneficiary the performance units granted pursuant to such award; and (ii) such Associated Option shall be cancelable in the discretion of the Committee, without the consent of the optionee, under the conditions and to the extent specified in the award.
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(11) Stock Appreciation Rights. In the case of any option granted under the Plan, either at the time of grant or by amendment of such option at any time after such grant there may be included a stock appreciation right which shall be subject to such terms and conditions, not inconsistent with the Plan, as the Committee shall impose, including the following:
(A) A stock appreciation right shall be exercisable to the extent, and only to the extent, that the option in which it is included is at the time exercisable, and may be exercised within such period only at such time or times as may be determined by the Committee;
(B) A stock appreciation right shall entitle the optionee (or any person entitled to act under the provisions of subsection (9) hereof) to surrender unexercised the option in which the stock appreciation right is included (or any portion of such option) to the Company and to receive from the Company in exchange therefor that number of shares having an aggregate value equal to (or, in the discretion of the Committee, less than) the excess of the value of one share (provided such value does not exceed such multiple of the option price per share as may be specified by the Committee) over the option price per share specified in such option times the number of shares called for by the option, or portion thereof, which is so surrendered. The Committee shall be entitled to cause the Company to settle its obligation, arising out of the exercise of a stock appreciation right, by the payment of cash equal to the aggregate value of the shares the Company would otherwise be obligated to deliver or partly by the payment of cash and partly by the delivery of shares. Any such election shall be made within 30 business days after the receipt by the Committee of written notice of the exercise of the stock appreciation right. The value of a share for this purpose shall be the Fair Market Value thereof on the last business day preceding the date of the election to exercise the stock appreciation right;
(C) No fractional shares shall be delivered under this subsection
(11) but in lieu thereof a cash adjustment shall be made;
(D) If a stock appreciation right included in an option is exercised, such option shall be deemed to have been exercised to the extent of the number of shares called for by the option or portion thereof which is surrendered on exercise of the stock appreciation right and no new option may be granted covering such shares under this Plan; and
(E) If an option which includes a stock appreciation right is exercised, such stock appreciation right shall be deemed to have been canceled to the extent of the number of shares called for by the option or portion thereof is exercised and no new stock appreciation rights may be granted covering such shares under this Plan.
(12) Incentive Stock Options. In the case of any incentive stock option granted under the Plan, the aggregate Fair Market Value of the shares of Common Stock of the Company (determined at the time of grant of each option) with respect to which incentive stock options granted under the Plan and any other plan of the Company or its parent or a Subsidiary which are exercisable for the first time by an employee during any calendar year shall not exceed $100,000 or such other amount as may be required by the Code. In any year, the maximum number of shares with respect to which incentive stock options may be granted shall not exceed 4,000,000 shares.
(13) Rights of Transferee. Notwithstanding anything to the contrary herein, if an option has been transferred in accordance with
Section 6(b)(6), the option shall be exercisable solely by the transferee. The option shall remain subject to the provisions of the Plan, including that it will be exercisable only to the extent that the optionee or optionee's estate would have been entitled to exercise it if the optionee had not transferred the option. In the event of the death of the optionee prior to the expiration of the right to exercise the transferred option, the period during which the option shall be exercisable will terminate on the date one year following the date of the optionee's death. In the event of the death of the transferee prior to the expiration of the right to exercise the option, the period during which the option shall be exercisable by the executors, administrators, legatees and distributees of the transferee's estate, as the case may be, will
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terminate on the date one year following the date of the transferee's death. In no event will the option be exercisable after the expiration of the option period set forth in the Stock Option Agreement. The option shall be subject to such other rules as the Committee shall determine.
7. Long-term Performance Awards: Awards under the Plan shall consist of the conditional grant to the participants of a specified number of performance units. The conditional grant of a performance unit to a participant will entitle the participant to receive a specified dollar value, variable under conditions specified in the award, if the performance objectives specified in the award are achieved and the other terms and conditions thereof are satisfied.
Each award will be subject to the following terms and conditions:
(a) Grant of Awards. The Committee shall (1) select the officers and key executives of the Company and its Subsidiaries and Affiliates to whom awards may from time to time be granted, (2) determine the number of performance units covered by each award, (3) determine the terms and conditions of each performance unit awarded and the award period and performance objectives with respect to each award, (4) determine the periods during which a participant may request the Committee to approve deferred payment of a percentage (50% or 100%) of an award (the "Deferred Portion") and the interest or rate of return thereon or the basis on which such interest or rate of return thereon is to be determined, (5) determine whether payment with respect to the portion of an award which has not been deferred (the "Current Portion") and the payment with respect to the Deferred Portion of an award shall be made entirely in cash, entirely in Common Stock or partially in cash and partially in Common Stock, (6) determine whether the award is to be made independently of or in conjunction with a nonqualified stock option granted under the Plan, and (7) prescribe the form of the instruments necessary or advisable in the administration of the awards.
(b) Terms and Conditions of Award. Any award conditionally granting performance units to a participant shall be evidenced by a Performance Unit Agreement executed by the Company and the participant, in such form as the Committee shall approve, which Agreement shall contain in substance the following terms and conditions and such additional terms and conditions as the Committee shall prescribe:
(1) Number of Performance Units. The Performance Unit Agreement shall specify the number of performance units conditionally granted to the participant. If the award has been made in conjunction with the grant of an Associated Option, the number of performance units granted shall initially be equal to the number of shares which the participant is granted the right to purchase pursuant to the Associated Option, but one performance unit shall be canceled for each share of the Company's Common Stock purchased upon exercise of the Associated Option or for each stock appreciation right included in such option that has been exercised.
(2) Value of Performance Units. The Performance Unit Agreement shall specify the threshold, target and maximum dollar values of each performance unit and corresponding performance objectives as provided under Section 7(b)(5).
(3) Award Periods. For each award, the Committee shall designate an award period with a duration to be determined by the Committee in its discretion but in no event less than three calendar years within which specified performance objectives are to be attained. There may be several award periods in existence at any one time and the duration of performance objectives may differ from each other.
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(4) Consideration. Each participant, as consideration for the award of performance units, shall remain in the continuous employ of the Company or of one of its Subsidiaries or Affiliates for at least one year after the date of the making of such award, and no award shall be payable until after the completion of such one year of employment by the participant.
(5) Performance Objectives. The Committee shall establish performance objectives with respect to the Company for each award period on the basis of such criteria and to accomplish such objectives as the Committee may from time to time determine. Performance objectives may include objective and subjective criteria. During any award period, the Committee may adjust the performance objectives for such award period as it deems equitable in recognition of unusual or nonrecurring events affecting the Company, changes in applicable tax laws or accounting principles, or such other factors as the Committee may determine.
(6) Determination and Payment of Performance Units Earned. As soon as practicable after the end of an award period, the Committee shall determine the extent to which awards have been earned on the basis of the Company's actual performance in relation to the established performance objectives as set forth in the Performance Unit Agreement. The Performance Unit Agreement shall specify that as soon as practicable after the end of each award period, the Committee shall determine whether the conditions of Sections 7(b)(4) and 7(b)(5) hereof have been met and, if so, shall ascertain the amount payable to the participant in respect of the performance units. As promptly as practicable after it has determined that an amount is payable in respect of an award, the Committee shall cause the Current Portion of such award to be paid to the participant or the participant's beneficiaries, as the case may be, in the Committee's discretion, either entirely in cash, entirely in Common Stock or partially in cash and partially in Common Stock. The Deferred Portion of an award shall be contingently credited and payable to the participant over a deferred period and shall be credited with interest or a rate of return, as determined by the Committee. The Committee, in its discretion, shall determine the conditions upon, and method of, payment of such deferred portions and whether such payment will be made entirely in cash, entirely in Common Stock or partially in cash and partially in Common Stock.
In making the payment of an award in Common Stock hereunder, the cash equivalent of such Common Stock shall be determined by the Fair Market Value of the Common Stock on the day the Committee designates the performance units shall be paid.
(7) Nontransferability of Awards and Designation of Beneficiaries. No award under the Plan shall be transferable by the participant other than by will or by the laws of descent and distribution, except that a participant may designate a beneficiary pursuant to the provisions hereof.
If any participant or the participant's beneficiary shall attempt to assign the participant's rights under the Plan in violation of the provisions thereof, the Company's obligation to make any further payments to such participant or the participant's beneficiaries shall forthwith terminate.
A participant may name one or more beneficiaries to receive any payment of an award to which the participant may be entitled under the Plan in the event of the participant's death, on a form to be provided by the Committee. A participant may change the participant's beneficiary designation from time to time in the same manner.
If no designated beneficiary is living on the date on which any payment becomes payable to a participant's beneficiary, such payment will be payable to the person or persons in the first of the following classes of successive preference:
(i) Widow or widower, if then living,
(ii) Surviving children, equally,
(iii) Surviving parents, equally,
(iv) Surviving brothers and sisters, equally,
(v) Executors or administrators
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and the term "beneficiary" as used in the Plan shall include such person or persons.
(8) Retirement and Termination of Employment Other Than by Death or Disability. In the event of the Retirement prior to the end of an award period of a participant who has satisfied the one year employment requirement of Section 7(b)(4) with respect to an award prior to Retirement, the participant, or his estate, shall be entitled to a payment of such award at the end of the award period, pursuant to the terms of the Plan and the participant's Performance Unit Agreement, provided, however, that the participant shall be deemed to have earned that proportion (to the nearest whole unit) of the value of the performance units granted to the participant under such award as the number of months of the award period which have elapsed since the first day of the calendar year in which the award was made to the end of the month in which the participant's Retirement occurs, bears to the total number of months in the award period. The participant's rights in any remaining performance units shall be canceled and forfeited.
Subject to Section 7(b)(6) hereof, the Performance Unit Agreement shall specify that the rights of the participant in the performance units granted to such participant shall be conditional and shall be canceled, forfeited and surrendered if the participant's continuous employment with the Company and its Subsidiaries and Affiliates shall terminate for any reason, other than the participant's death, Disability or Retirement prior to the end of the award period.
The Committee may, in its discretion, waive, in whole or in part, the cancellation, forfeiture and surrender of any performance units.
(9) Disability of Participant. For the purposes of any award a participant who becomes Disabled shall be deemed to have suspended active employment by reason of Disability commencing on the date the participant becomes entitled to receive payments under a disability pay plan of the Company or any Subsidiary or Affiliate and continuing until the date the participant is no longer entitled to receive such payments. In the event a participant becomes Disabled during an award period but only if the participant has satisfied the one year employment requirement of Section 7(b)(4) with respect to an award prior to becoming Disabled, upon the determination by the Committee of the extent to which an award has been earned pursuant to Section 7(b)(6) the participant shall be deemed to have earned that proportion (to the nearest whole unit) of the value of the performance units granted to the participants under such award as the number of months of the award period in which the participant was not Disabled bears to the total number of months of the award period. The participant's rights in any remaining performance units shall be canceled and forfeited.
The Committee may, in its discretion, waive, in whole or in part, such cancellation and forfeiture of any performance units.
(10) Death of Participant. In the event of the death prior to the end of an award period of a participant who has satisfied the one year employment requirement with respect to an award prior to the date of death, the participant's beneficiaries or estate, as the case may be, shall be entitled to a payment of such award upon the end of the award period, pursuant to the terms of the Plan and the participant's Performance Unit Agreement, provided, however, that the participant shall be deemed to have earned that proportion (to the nearest whole unit) of the value of the performance units granted to the participant under such award as the number of months of the award period which have elapsed since the first day of the calendar year in which the award was made to the end of the month in which the participant's death occurs, bears to the total number of months in the award period. The participant's rights in any remaining performance units shall be canceled and forfeited.
The Committee may, in its discretion, waive, in whole or in part, such cancellation and forfeiture of any performance units.
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(11) Grant of Associated Option. If the Committee determines that the conditional grant of performance units under the Plan is to be made to a participant in conjunction with the grant of a nonqualified stock option under the Plan, the Committee shall grant the participant an Associated Option under the Plan subject to the terms and conditions of this subsection (11). In such event, such award under the Plan shall be contingent upon the participant's being granted such an Associated Option pursuant to which: (i) the number of shares the optionee may purchase shall initially be equal to the number of performance units conditionally granted by the award, (ii) such number of shares shall be reduced on a one share-for-one unit basis to the extent that the Committee determines, pursuant to Section 7(b)(6) hereof, to pay to the participant or the participant's beneficiaries the performance units conditionally granted pursuant to the award, and
(iii) the Associated Option shall be cancelable in the discretion of the Committee, without the consent of the participant, under the conditions and to the extent specified herein and in
Section 7(b)(6) hereof.
If no amount is payable in respect of the conditionally granted performance units, the award and such performance units shall be deemed to have been canceled, forfeited and surrendered, and the Associated Option, if any, shall continue in effect in accordance with its terms. If any amount is payable in respect of the performance units and such units were granted in conjunction with an Associated Option, the Committee shall, within 30 days after the determination of the Committee referred to in the first sentence of Section 7(b)(6), determine, in its sole discretion, either:
(A) to cancel in full the Associated Option, in which event the value of the performance units payable pursuant to Sections 7(b)(5) and (6) shall be paid;
(B) to cancel in full the performance units, in which event no amount shall be paid to the participant in respect thereof but the Associated Option shall continue in effect in accordance with its terms; or
(C) to cancel some, but not all, of the performance units, in which event the value of the performance units payable pursuant to Sections 7(b)(5) and (6) which have not been canceled shall be paid and the Associated Option shall be canceled with respect to that number of shares equal to the number of conditionally granted performance units that remain payable.
Any action taken by the Committee pursuant to the preceding sentence shall be uniform with respect to all awards having the same award period. If the Committee takes no such action, it shall be deemed to have determined to cancel in full the award in accordance with clause (B) above.
8. Determination of Breach of Conditions: The determination of the Committee as to whether an event has occurred resulting in a forfeiture or a termination or reduction of the Company's obligations in accordance with the provisions of the Plan shall be conclusive.
9. Adjustment in the Event of Change in Stock: In the event of changes in the outstanding Common Stock of the Company by reason of stock dividends, recapitalization, mergers, consolidations, split-ups, combinations or exchanges of shares and the like, the aggregate number and class of shares available under the Plan, and the number, class and the price of shares subject to outstanding options and/or awards and the number of performance units and/or the dollar value of each unit shall be appropriately adjusted by the Committee, whose determination shall be conclusive.
10. Taxes: In connection with the transfer of shares of Common Stock to an optionee, subject to Section 16 of the Exchange Act, as the result of the exercise of a nonqualified stock option or a stock appreciation right, or to a participant subject to Section 16 of the Exchange Act, upon payment of an award, the Company shall have the right to retain or sell without notice, or to demand surrender of, shares of Common Stock having a Fair Market Value (taking into account any commissions or other expenses the Company may incur upon the sale of such shares) on the date that the amount required by any governmental entity to be withheld or otherwise deducted and paid with respect to such transfer ("Withholding Tax") is to be determined (the "Tax Date") sufficient to cover the amount of any Applicable Tax (the amount of W ithholding Tax plus the incremental amount determined on the basis of the highest marginal tax rate applicable to such optionee or participant, Federal Insurance Contribution Act taxes or other governmental impost or levy), and to make payment (or to reimburse itself for payment made) to the appropriate taxing authority of an amount in cash equal to the amount of such Applicable Tax, remitting any balance to the optionee or participant. Notwithstanding the foregoing, if the stock options have been transferred, the optionee shall provide the Company with funds sufficient to pay such Withholding or Applicable Tax. Furthermore, if such optionee does not satisfy his
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withholding obligation, the transferee may provide the funds sufficient to enable the Company to pay such Withholding Tax or Applicable Tax. However, if the stock options have been transferred, the Company shall have no right to retain or sell without notice, or to demand surrender from the transferee of, shares of Common Stock in order to pay such Withholding Tax or Applicable Tax.
An optionee or participant who is not an executive officer of the Company subject to Section 16 of the Exchange Act shall be entitled to satisfy the obligation to pay any Withholding Tax or Applicable Tax, by providing the Company with funds sufficient to enable the Company to pay such Withholding Tax or Applicable Tax or by requiring the Company to retain or to accept upon delivery thereof by the optionee or participant shares of Common Stock sufficient in value (determined in accordance with the last sentence of the preceding paragraph), to cover the amount of such Withholding Tax or Applicable Tax. Each election by an optionee or participant to have shares retained or to deliver shares for this purpose shall be subject to the following restrictions: (i) the election must be in writing and be made on or prior to the Tax Date; (ii) the election must be irrevocable; (iii) the election shall be subject to the disapproval of the Committee.
11. Amendment of the Plan: The Board of Directors may amend or suspend the Plan at any time and from time to time. No such amendment of the Plan may, however, increase the maximum number of shares to be offered under options or awards, or change the manner of determining the option price, or change the designation of employees or class of employees eligible to receive options or awards, or permit the transfer or issue of stock before payment therefor in full, or, without the written consent of the optionee or participant, alter or impair any option or award previously granted under the Plan, Prior Plan or LTPAP. Notwithstanding the foregoing, if an option has been transferred in accordance with Section 6(b)(6), written consent of the transferee (and not the optionee) shall be necessary to alter or impair any option or award previously granted under the Plan.
12. Amendment of Options Outstanding Under the Prior Plan: The Prior Plan and certain nonqualified options granted and outstanding thereunder are hereby amended to provide that any nonqualified option which is outstanding on the date this Plan is adopted by a vote of the holders of a majority of the shares of the Company's Common Stock and $2.00 Convertible Preferred Stock present in person or by proxy at a duly held shareholders meeting at which a quorum representing a majority of all outstanding voting stock is present shall be exercisable in accordance with Sections 6(b)(7) and 6(b)(9), except that for the purpose of such options "Retirement" shall additionally mean termination of the employment of an employee after completing 35 years of service with the Company or its Subsidiaries.
Furthermore, an employee who makes an election to retire under Article 19 of the Retirement Income Plan shall have any additional years of age and service which are credited under Article 19 of the Retirement Income Plan taken into account when determining such employee's age and years of service with the Company or its Subsidiaries under this Section 12. Such election shall be deemed a Retirement for purposes of this Section 12 and all other purposes of this Plan.
13. Miscellaneous: By accepting any benefits under the Plan, each optionee or participant and each person claiming under or through such optionee or participant shall be conclusively deemed to have indicated acceptance and ratification of, and consent to, any action taken or made to be taken or made under the Plan by the Company, the Board, the Committee or any other Committee appointed by the Board. No participant or any person claiming under or through him shall have any right or interest, whether vested or otherwise, in the Plan or in any option, or stock appreciation right or award thereunder, contingent or otherwise, unless and until all of the terms, conditions and provisions of the Plan and the Agreement that affect such participant or such other person shall have been complied with. Nothing contained in the Plan or in any Agreement shall require the Company to segregate or earmark any cash or other property. Neither the adoption of the Plan nor its operation shall in any way affect the rights and powers of the Company or any of its Subsidiaries or Affiliates to dismiss and/or discharge any employee at any time.
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14. Term of the Plan: The Plan shall become effective as of January 1, 1993 by action of the Board of Directors conditioned on and subject to approval of the Plan, by a vote of the holders of a majority of the shares of Common Stock and $2.00 Convertible Preferred Stock of the Company present in person or by proxy at a duly held shareholders meeting at which a quorum representing a majority of all outstanding voting stock is present. The Plan shall terminate on December 31, 2002, or at such earlier date as may be determined by the Board of Directors. Termination of the Plan, however, shall not affect the rights of optionees under options theretofore granted to them or the rights of participants under awards theretofore granted to them, and all unexpired options and awards shall continue in force and operation after termination of the Plan except as they may lapse or be terminated by their own terms and conditions.

BRISTOL-MYERS SQUIBB COMPANY
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
AMENDED EFFECTIVE JANUARY 12, 1999
1. Purpose:
The purpose of the Bristol-Myers Squibb Company Non-Employee Directors' Stock Option Plan ("the Plan") is to secure for Bristol-Myers Squibb Company ("the Company") and its stockholders the benefits of the incentive inherent in increased common stock ownership by the members of the Board of Directors ("the Board") of the Company who are Eligible Directors as defined in the Plan.
2. Administration:
The Plan shall be administered by the Board. The Board shall have all the powers vested in it by the terms of the Plan, such powers to include authority (within the limitations described herein) to prescribe the form of the agreement embodying awards of stock options made under the Plan ("Options"). The Board shall, subject to the provisions of the Plan, grant Options under the Plan and shall have the power to construe the Plan, to determine all questions arising thereunder and to adopt and amend such rules and regulations for the administration of the Plan as it may deem desirable. Any decision of the Board in the administration of the Plan, as described herein, shall be final and conclusive. The Board may act only by a majority of its members in office, except that the members thereof may authorize any one or more of their number or the Secretary or any other officer of the Company to execute and deliver documents on behalf of the Board. No member of the Board shall be liable for anything done or omitted to be done by such member or by any other member of the Board in connection with the Plan, except for such member's own willful misconduct or as expressly provided by statute.
3. Amount of Stock:
The stock which may be issued and sold under the Plan will be the Common Stock (par value $.10 per share) of the Company, of a total number not exceeding 500,000 shares, subject to adjustment as provided in Paragraph 6 below. The stock to be issued may be either authorized and unissued shares or issued shares acquired by the Company or its subsidiaries. In the event that Options granted under the Plan shall terminate or expire without being exercised in whole or in part, new Options may be granted covering the shares not purchased under such lapsed Options.
4. Eligible Directors:
The members of the Board who are eligible to participate in the Plan are persons who serve as directors of the Company after the effective date of the Plan and:
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(a) who are not current or former employees of the Company and
(b) who are not and, in the past, have not been eligible to receive Options on Company stock by participation as an employee in another plan sponsored by the Company or under a contractual arrangement with the Company.
5. Terms and Conditions of Options:
Each Option granted under the Plan shall be evidenced by an agreement in such form as the Board shall prescribe from time to time in accordance with the Plan and shall comply with the following terms and conditions:
(a) The Option exercise price shall be the fair market value of the Common Stock shares subject to such Option on the date the Option is granted, which shall be the average of the high and the low sales prices of a Common Stock share on the date of grant as reported on the New York Stock Exchange Composite Transactions Tape or, if the New York Stock Exchange is closed on that date, on the last preceding date on which the New York Stock Exchange was open for trading.
(b) Each year, as of the date of the Annual Meeting of Stockholders of the Company, each Eligible Director who has been elected or reelected or who is continuing as a member of the Board as of the adjournment of the Annual Meeting shall automatically receive an Option for 2,500 shares of Common Stock on a post-split basis.
(c) The Option shall not be transferable by the optionee otherwise than by will or the laws of descent and distribution, and shall be exercisable during his lifetime only by him.
(d) No Option or any part of an Option shall be exercisable:
(I) before the Eligible Director has served one term-year as a member of the Board since the date the Option was granted (as used herein, the term "term-year" means that period from one Annual Meeting to the subsequent Annual Meeting),
(ii) after the expiration of ten years from the date the Option was granted,
(iii) unless, written notice of the exercise is delivered to the Company specifying the number of shares to be purchased and payment in full is made for the shares of Common Stock being acquired thereunder at the time of exercise; such payment shall be made
(A) in United States dollars by certified check, or bank draft or
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(B) by tendering to the Company Common Stock shares owned by the person exercising the Option and having a fair market value equal to the cash exercise price applicable to such Option, such fair market value to be the average of the high and low sales prices of a Common Stock share on the date of exercise as reported on the New York Stock Exchange Composite Transactions Tape, or, if the New York Stock Exchange is closed on that date, on the last preceding date on which the New York Stock Exchange was open for trading, or
by a combination of United States dollars and Common Stock shares as aforesaid; and
(iv) unless the person exercising the Option has been, at all times during the period beginning with the date of grant of the Option and ending on the date of such exercise, an Eligible Director of the Company, except that
(A) if such a person shall cease to be such an Eligible Director for reasons other than retirement or death, while holding an Option that has not expired and has not been fully exercised, such person, at any time within one year after the date he ceases to be such an Eligible Director (but in no event after the Option has expired under the provisions of subparagraph 5(d) (ii) above), may exercise the Option with respect to any Common Stock shares as to which such person has not exercised the Option on the date the person ceased to be such an Eligible Director; or
(B) if such person shall cease to be such an Eligible Director by reason of retirement or death while holding an Option that has not expired and has not been fully exercised, such person, or in the case of death, the executors, administrators or distributees, as the case may be, may at any time within five years after the date such person ceased to be such an Eligible Director (but in no event after the Option has expired under the provisions of subparagraph 5(d)
(ii) above), exercise the Option with respect to any shares of Common Stock as to which such person has not exercised the Option on the date the person ceased to be such an Eligible Director, notwithstanding the provisions of subparagraph 5(e) below.
if any person who has ceased to be such an Eligible Director for reasons other than death, shall die holding an Option that has not been fully exercised, such person's executors, administrators, heirs or distributees, as the case may be, may, at any time within the greater of (1) one year after the date of death or (2) the remainder for the period in which such person could have exercised the Option had the person not died, (but in no event (under either (1) or (2) after the Option has expired under the provisions of subparagraph 5(d) (ii) above)), exercise the Option with respect to any shares as to which the decedent could have exercised the Option at the time of death.
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In the event any Option is exercised by the executors, administrators, legatees or distributees of the estate of a deceased optionee, the Company shall be under no obligation to issue stock thereunder unless and until the Company is satisfied that the person or persons exercising the Option are the duly appointed legal representatives of the deceased optionee's estate or the proper legatees or distributees thereof.
(e) Subject to subparagraph 5(d) (I) above, one-quarter (25%) of the total number of shares of Common Stock covered by the Option shall become exercisable beginning on the earlier of (a) the first anniversary date of the grant of the Option or (b) the completion of one term-year following the grant of the Option; thereafter an additional one-quarter (25%) of the shares shall become exercisable annually on the earlier of
(a) the anniversary date of the grant of the Option or (b) the completion of an additional term-year of service as a member of the Board.
6. Adjustment in the Event of Change in Stock:
In the event of changes in the outstanding Common Stock of the Company by reason of stock dividends, recapitalizations, mergers, consolidations, split-ups, combinations or exchanges of shares and the like, the aggregate number and class of shares available under the Plan, and the number, class and the price of shares of Common Stock subject to outstanding Options shall be appropriately adjusted by the Board, whose determination shall be conclusive.
7. Miscellaneous Provisions:
(a) Except as expressly provided for in the Plan, no Eligible Director or other person shall have any claim or right to be granted an Option under the Plan. Neither the Plan nor any action taken hereunder shall be construed as giving any Eligible Director any right to be retained in the service of the Company.
(b) An optionee's rights and interest under the Plan may not be assigned or transferred in whole or in part either directly or by operation of law or otherwise (except in the event of an optionee's death, by will or the laws of descent and distribution), including, but not by way of limitations, execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner, and no such right or interest of any participant in the Plan shall be subject to any obligation or liability of such participant.
(c) No Common Stock shares shall be issued hereunder unless counsel for the Company shall be satisfied that such issuance will be in compliance with applicable federal, state and other securities laws and regulations.
(d) It shall be a condition to the obligation of the Company to issue Common Stock shares upon exercise of an Option, that the optionee (or any beneficiary or person entitled to act under subparagraph 5(d) (iv) above) pay to the Company, upon its demand, such amount as may be requested by the Company for the purpose of satisfying any liability to withhold federal, state, local or foreign income or other taxes. If the amount requested is not paid, the Company may refuse to issue Common Stock shares.
E-3-4

(e) The expenses of the Plan shall be borne by the Company.
(f) The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the issuance of shares upon exercise of any Option under the Plan and issuance of shares upon exercise of Options shall be subordinate to the claims of the Company's general creditors.
(g) By accepting any Option or other benefit under the Plan, each optionee and each person claiming under or through such person shall be conclusively deemed to have indicated his acceptance and ratification of, and consent to, any action taken under the Plan by the Company or the Board.
8. Amendment or Discontinuance:
The Plan may be amended at any time and from time to time by the Board as the Board shall deem advisable, including, but not limited to amendments necessary to qualify for any exemption or to comply with applicable law or regulations provided, however, that except as provided in Paragraph 6 above, the Board may not, without further approval by the shareholders of the Company in accordance with Paragraph 10 below, increase the maximum number of shares of Common Stock as to which Options may be granted under the Plan, increase the number of shares subject to an Option, reduce the minimum Option exercise price described in subparagraph 5(a) above, extend the period during which Options may be granted or exercised under the Plan or change the class of persons eligible to receive Options under the Plan. No amendment of the Plan shall materially and adversely affect any right of any optionee with respect to any Option theretofore granted without such optionee's written consent.
9. Termination:
This Plan shall terminate upon the earlier of the following dates or events to occur:
(a) upon the adoption of a resolution of the Board terminating the Plan; or
(b) ten years from the date the Plan is initially approved and adopted by the shareholders of the Company in accordance with Paragraph 10 below.
10. Effective Date of Plan:
The Plan shall become effective as of May 1, 1990 or such later date as the Board may determine, provided that the Company stockholders shall have adopted the Plan at the Company's 1990 Annual Meeting of Stockholders.
E-3-5

March 12, 1999
Mr. Charles A. Heimbold, Jr.
Chairman and Chief Executive Officer
Bristol-Myers Squibb Company
345 Park Avenue
New York, New York 10154-0037
Dear Charlie:
Over the period since you assumed the role of Chief Executive Officer, your leadership has significantly contributed to the Company's success, as reflected in the substantial increase in the value of the Company by approximately $100 billion as of year-end 1998. In light of this, the Compensation and Management Development Committee has approved the following in exchange for your agreement to serve as Chairman and Chief Executive Officer until December 31, 2001, or such earlier date as the Board of Directors may appoint your successor. This new agreement, the provisions of which are detailed below, replaces the original agreement dated March 25, 1998.
* You are granted a Restricted Stock Award of 300,000 shares which will vest upon your retirement on December 31, 2001, or such earlier date as the Board of Directors may appoint your successor.
* Your annual bonus target will be determined by the Board but will not be less than 170% of your base salary, and your base salary will not be less than in 1998.
* After your retirement you will be provided with the benefits, support and agreements similar to those historically provided to other retiring executives who served as Chairman and Chief Executive Officer of the Company.
* You are granted a Restricted Stock Award of 100,000 shares which will vest on January 1, 2002. In the event the Board of Directors appoints your successor prior to December 31, 2001, and you elect to retire prior to December 1, 2001, you may elect to have this Restricted Stock Award vest at the time you elect to retire.
* Your Retirement Income Plan Benefit will be calculated on the basis of your three-year final average pay (salary plus bonus) instead of the five-year final average pay normally provided under the Plan.
E-4-1

In calculating your pension benefit, the pension formula will be increased to reflect an additional ten percentage points above that provided by the normal formula for retirement benefits (It is estimated that the benefit earned under the Plan will approximate 77% of your final average pay upon retirement at the end of 2001. This additional benefit would increase your total retirement benefit to approximately 87% of final average pay).
Bristol-Myers Squibb Company

By: /s/ James D. Robinson III
-----------------------------------
        James D. Robinson III
        Chairman, Compensation and
        Management Development Committee	

Agreed to:

By: /s/ Charles A. Heimbold, Jr.
--------------------------------------------
        Charles A. Heimbold, Jr.
        Chairman and Chief Executive Officer	

E-4-2

EXHIBIT 21
 BRISTOL-MYERS SQUIBB COMPANY
SUBSIDIARY LIST
2309 Realty Corporation
345 Park Corporation
77 Wilson St., Corp.
A.G. Medical Services, P.A.
Agit Ges. fuer Informationssysteme und Techniken m.b.H. Alive & Well, Inc.
Allard Laboratories, Inc.
Allard Labs Acquisition LLC
Apothecon BV
Apothecon Farmaceutica Ltda.
Apothecon, Inc.
Apothecon, S.A.
Astel Laboratoires S.A.R.L.
Auslandsbeteiligungs Holding, GmbH
B-MS GeneRx
B. L. Pharmaceuticals (Proprietary) Limited Blisa Acquisition LLC
Blisa, Inc.
BMS Holdings
BMS Investco SAS
BMS Music Company
BMS-Generiques SA
BMSIC Pharma Handels GmbH & Co. KG
BMSIC Pharma-Handels Verwaltungs GmbH
Boclaro Inc.
Bristol (Iran) S.A.
Bristol Arzneimittel G.m.b.H.
Bristol Caribbean, Inc.
Bristol Foundation
Bristol Iran Private Company Limited
Bristol Laboratories Corporation
Bristol Laboratories Inc.
Bristol Laboratories International, S.A.
Bristol Laboratories Medical Information Systems Inc. Bristol Pharmaceutical Information Center, S.A. Bristol-Myers (Bangladesh) Inc.
Bristol-Myers (Japan) Limited
Bristol-Myers (Private) Limited
Bristol-Myers (Zaire) Ltd.
Bristol-Myers Award Superannuation Pty. Ltd. Bristol-Myers Barceloneta, Inc.
E-5-1

BRISTOL-MYERS SQUIBB COMPANY
SUBSIDIARY LIST
Bristol-Myers Company Limited
Bristol-Myers de Mexico, S. de R. L. de C.V. Bristol-Myers Foreign Sales Corporation
Bristol-Myers Ges.m.b.H.
Bristol-Myers Industrial (Dominicana), Inc. Bristol-Myers International s.r.l.
Bristol-Myers Lion Ltd.
Bristol-Myers Middle East S.A.L.
Bristol-Myers Nederland Inc.
Bristol-Myers Oncology Therapeutic Network, Inc. Bristol-Myers Overseas Corporation
Bristol-Myers Overseas Corporation (Guam Branch) Bristol-Myers Overseas Corporation (Korea - Branch) Bristol-Myers Pakistan (Pvt.) Limited
Bristol-Myers S.A.
Bristol-Myers Squibb (China) Investment Co., Ltd. Bristol-Myers Squibb (Guangzhou) Ltd.
Bristol-Myers Squibb (Hong Kong) Limited Bristol-Myers Squibb (Malaysia) Sendirian Berhad Bristol-Myers Squibb (N.Z.) Limited
Bristol-Myers Squibb (Phil.) Inc.
Bristol-Myers Squibb (Proprietary) Limited Bristol-Myers Squibb (Russia)
Bristol-Myers Squibb (Singapore) Pte. Limited Bristol-Myers Squibb (Taiwan) Ltd.
Bristol-Myers Squibb (Thailand) Ltd.
Bristol-Myers Squibb (West Indies) Ltd.
Bristol-Myers Squibb A.E.B.E.
Bristol-Myers Squibb A.G.
Bristol-Myers Squibb Aktiebolag
Bristol-Myers Squibb Argentina, S.A.*
Bristol-Myers Squibb Asia/Pacific, Inc.
Bristol-Myers Squibb Asia/Pacific, Inc. (Singapore - Branch) Bristol-Myers Squibb Auslandsbeteiligungs Holding, GmbH Bristol-Myers Squibb Australia Pty. Ltd. Bristol-Myers Squibb B.V.
Bristol-Myers Squibb Belgium, S.A.
Bristol-Myers Squibb Brasil, S.A.
Bristol-Myers Squibb Business Services Limited Bristol-Myers Squibb Canada Inc.
Bristol-Myers Squibb Company
Bristol-Myers Squibb de Colombia S.A.
Bristol-Myers Squibb de Costa Rica, S.A.
E-5-2

BRISTOL-MYERS SQUIBB COMPANY
SUBSIDIARY LIST
Bristol-Myers Squibb de Guatemala, S. A. Bristol-Myers Squibb de Mexico, S de R.L. de C.V. Bristol-Myers Squibb de Venezuela, S.A.
Bristol-Myers Squibb del Ecuador, C.A.
Bristol-Myers Squibb Delta Holdings, L.L.C. Bristol-Myers Squibb Dominicana, S.A.
Bristol-Myers Squibb Europa PLC
Bristol-Myers Squibb Europe Headquarters SARL Bristol-Myers Squibb Export SA
Bristol-Myers Squibb Farmaceutica Portuguesa Limitada Bristol-Myers Squibb G.m.b.H.
Bristol-Myers Squibb Ges. m.b.H.
Bristol-Myers Squibb Global Properties Ltd. Bristol-Myers Squibb Holding Germany GMBH Bristol-Myers Squibb Holdings B.V.
Bristol-Myers Squibb Holdings Limited
Bristol-Myers Squibb Holdings Limited (Ireland - Branch) Bristol-Myers Squibb Holdings Limited (Kenya - Branch) Bristol-Myers Squibb Ilaclari Limited Sirketi Bristol-Myers Squibb Ilaclari, Inc.
Bristol-Myers Squibb Ilaclari, Inc. (Turkey - Branch) Bristol-Myers Squibb International Company Bristol-Myers Squibb International Corporation Bristol-Myers Squibb International Corporation (Belgium - Branch) Bristol-Myers Squibb International Corporation (Egypt - Branch) Bristol-Myers Squibb International Corporation (Spain - Branch) Bristol-Myers Squibb International Insurance Company Bristol-Myers Squibb International Limited Bristol-Myers Squibb Investco, Inc.
Bristol-Myers Squibb K.K.
Bristol-Myers Squibb Korea Ltd.
Bristol-Myers Squibb Laboratories Company Bristol-Myers Squibb Manufacturing
Bristol-Myers Squibb MEA S.A. (Saudi Arabia - Branch) Bristol-Myers Squibb MEA S.A. (Switzerland) Bristol-Myers Squibb MEA S.A.(Egypt - Branch) Bristol-Myers Squibb Norway Ltd.
Bristol-Myers Squibb Pakistan (Pvt.) Ltd. Bristol-Myers Squibb Peru S.A.
Bristol-Myers Squibb Pharmaceuticals Limited (England) Bristol-Myers Squibb Pharmaceuticals Limited (Ireland) Bristol-Myers Squibb Products S.A.
Bristol-Myers Squibb Puerto Rico, Inc.
E-5-3

BRISTOL-MYERS SQUIBB COMPANY
SUBSIDIARY LIST
Bristol-Myers Squibb S.p.A.
Bristol-Myers Squibb Service Ltd.
Bristol-Myers Squibb Sp. z o.o.
Bristol-Myers Squibb Spol. s r.o.
Bristol-Myers Squibb Superannuation Plan Pty. Ltd. Bristol-Myers Squibb Zentrum Fuer Forschung Und Fortbildung Im Gesundheitswesen G.m.b.H.
Bristol-Myers Squibb, S.A.
Bristol-Myers Zimmer Award Superannuation Plan Bristol-Salor Pharma G.m.b.H.
Cancer Research, Inc.
Carboplant Spezialimplante GmbH
CJG Partners, L.P.
Clairol Brazil Ltda.
Clairol Incorporated
Clairol International S.r.l.
Clairol Limited
Comercializadora RPM, S. De R.L. De C.V.
Compania Bristol-Myers Squibb de Centro America (El Salvador Branch) Compania Bristol-Myers Squibb de Centro America (Honduras Branch) Compania Bristol-Myers Squibb de Centro America (Nicaragua Branch) Compania Bristol-Myers Squibb de Centro America (Panama Branch) Convatec Limited
Convatec Spot s r.o.
Convatec Vertriebs G.m.b.H.
Convatec, S.A.
CRBM GIE
 Delmed S.A.
Dermogroup S.R.L.
Dong-A-Biotech Co., Ltd.
Duart Industries, Ltd.
E. R. Squibb & Sons de Venezuela, C.A.
E. R. Squibb & Sons Inter-American (Chile - Branch) E. R. Squibb & Sons Inter-American Corporation E. R. Squibb & Sons Inter-American Corporation (Colombia - Branch) E. R. Squibb & Sons Inter-American Corporation (PRico - Branch) E. R. Squibb & Sons Limited
E. R. Squibb & Sons, Inc.
E. R. Squibb & Sons, Inc. (England - Branch)* Elektrochemische Ges.Hirschfelde M.b.H.
ESS Partners, L.P.
EWI Corporation
F.A.I.R. Laboratories Limited
E-5-4

BRISTOL-MYERS SQUIBB COMPANY
SUBSIDIARY LIST
G.I.E. Centre de Recherche de Biologie Moleculaire G.I.E. Institut de Recherche Squibb
Grove Insurance Company Ltd.
Grove Limited
Grove Products (Far East) Limited
Grove Products (Far East) Limited (India - Branch) Heyden Farmaceutica Portugesa Limitada
Iris Acquisition Corp.
JG Partners, L.P.
Kingsdown Medical Consultants Limited
Laboratoire Oberlin
Laboratoires Convatec S.A.
Laboratoires Guieu France S.a.r.l.
Laboratoires UPSA
Laboratori Guieu S.p.A.
Lawrence Laboratories
Linson Investments Limited
Linson Pharma Inc.
Listo B.V.
Logics International, Inc.
Matrix Essentials Itallia SRL
Matrix Essentials, Inc.
Mead Johnson & Company
Mead Johnson (Guangzhou) Ltd.
Mead Johnson (Manufacturing) Jamaica Limited Mead Johnson A.E.B.E.
Mead Johnson B.V.
Mead Johnson de Mexico, S. de R.L. de C.V. Mead Johnson Farmaceutica Limitada
Mead Johnson International Limited (Argentine - Branch) Mead Johnson International Limited (Canada) Mead Johnson International Limited (Colombia - Branch) Mead Johnson Jamaica Ltd.
Mead Johnson Limited
Mead Johnson Pharmaceutical, Inc.
Mead Johnson S.p.A.
MEC Subsidiary Corporation
Medical Engineering Corporation
Monarch Crown Corporation
Oncogen Limited Partnership
Oncology Therapeutics Network Automated Technologies, Inc. Oncology Therapeutics Network Corporation Oncology Therapeutics Network Joint Venture, L.P.
E-5-5

BRISTOL-MYERS SQUIBB COMPANY
SUBSIDIARY LIST
Orthoplant Endoprothetik GmbH
Osmat S.A.
OTN Online, Inc.
OTN Parent Corp.
Oy Bristol-Myers Squibb (Finland) AB
P. T. Squibb Indonesia
Pharmagen
Pharmavit Rt.
PRB Partners, L.P.
Princeton Pharmaceuticals, S.A.
echerche et Propriete Industrielle
Redmond Products de Mexico, S. De R.L. De C.V. Redmond Products Distributing, Inc.
Redmond Products International, Inc.
Redmond Products, Inc.
Route 22 Real Estate Holding Corporation RPI Management, Inc.
S+G Implants G.m.b.H.
S.O.F.C.A.
Salorpharma G.m.b.H.
Sanofi Pharma Bristol-Myers Squibb SNC
Schuppert Meubelen Holten B.V.
Selecciones Mercantiles, S.A. de C.V.
Sino-American Shanghai Squibb Pharmaceuticals Limited Societe Francaise de Complements Alimentaires Squibb (Far East) Limited
Squibb (Far East) Limited (Taiwan - Branch) Squibb (Nigeria) Limited
Squibb (Thailand) Limited
Squibb ApS
Squibb Convatec Medical Products Co. Ltd. Squibb Development Limited
Squibb Farmaceutica Portuguesa, Limitada Squibb Industria Farmaceutica, S.A.
Squibb Manufacturing, Inc.
Squibb Middle East S.A. (Egypt - Branch) Squibb Middle East S.A. (Jordan - Branch) Squibb Middle East S.A. (Panama)
Squibb Overseas Investments, Inc.
Squibb Pacific Limited
Squibb Pharma G.m.b.H.
Squibb Properties, Inc.
Squibb Surgicare Limited
E-5-6

BRISTOL-MYERS SQUIBB COMPANY
SUBSIDIARY LIST
Squibb-von Heyden G.m.b.H.
Stamford Holdings B.V.
Swords Holdings I, L.L.C.
Swords Holdings II, L.L.C.
Swords Laboratories
T S V Corporation
Tallosa, S.A.
The B-M Group (Proprietary) Limited
Unterstuetzungskasse Bristol-Myers Squibb G.m.b.H. Upsamedica LDA
Upsamedica SA NV
Upsamedica SpA
Von Heyden Pharma G.m.b.H.
Wallingford Research, Inc.
Westwood-Intrafin, S.A.
Westwood-Squibb Holdings, Inc.
Westwood-Squibb Pharmaceuticals, Inc.
Zimmer B.V.
Zimmer Caribe, Inc.
Zimmer Chirurgie G.m.b.H.
Zimmer Europe Co-Ordination Centre N.V.
Zimmer Europe Limited
Zimmer Limited
Zimmer New Zealand Limited
Zimmer of Canada Limited
Zimmer Pte. Ltd.
Zimmer S. A. S.(France)
Zimmer S.A. (Spain)
Zimmer S.R.L.
Zimmer SAS
Zimmer, Inc.
E-5-7

Exhibit 23

CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses constituting part of the Registration Statements on Form S-8 (Nos. 33-30856, 33-38411, 33-38587, 33-44788, 333-47403, 33-52691, 33-58187 and 333-02873), Post-Effective Amendment No. 2 on Form S-8 (No. 33-30756-02) to Form S-4 (No. 333-09519), Form S-3 (Nos. 33-33682 and 333-49227) and Pre-Effective Amendment No. 1 on Form S-3 (No. 33-62496) of Bristol-Myers Squibb Company of our report dated January 20, 1999 appearing on page 61 of this Form 10-K.

/s/ PricewaterhouseCoopers LLP
------------------------------	

PRICEWATERHOUSECOOPERS LLP
 New York, New York
March 31, 1999
E-6-1

ARTICLE5	
Exhibit 27 for Bristol-Myers Squibb For Year Ended 12/31/98	
MULTIPLIER:1000000	

		
PERIOD TYPE	YEAR	
FISCAL YEAR END	Dec 31 1998	
PERIOD END	Dec 31 1998 1	
CASH	2244	
SECURITIES	285	
RECEIVABLES	3337	
ALLOWANCES	147	
INVENTORY	1873	
CURRENT ASSETS	8782	
PP&E	7508	
DEPRECIATION	3079	
TOTAL ASSETS	16272	
CURRENT LIABILITIES	5791	
BONDS	1364	
PREFERRED MANDATORY	0	
PREFERRED	0	
COMMON	219	
OTHER SE	7357	
TOTAL LIABILITY AND EQUITY	16272	
SALES	18284	
TOTAL REVENUES	18284	
CGS	4856	
TOTAL COSTS	4856	
OTHER EXPENSES	3889	
LOSS PROVISION	0	
INTEREST EXPENSE	154	
INCOME PRETAX	4268	
INCOME TAX	1127	
INCOME CONTINUING	3141	
DISCONTINUED	0	
EXTRAORDINARY	0	
CHANGES	0	
NET INCOME	3141	
EPS PRIMARY	1.58	
EPS DILUTED	1.55	
		
1	Items reported as "zero" are not applicable or are immaterial to the consolidated financial position of the Company. E-7-1	

EXHIBIT 99.1
Cautionary statement regarding forward looking statements made by the Company, intended to have the benefit of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995.
The Company is hereby filing a cautionary statement identifying important factors that could cause the Company's actual results to differ materially from those projected in forward looking statements made by or on behalf of the Company. There are several communications made by or on behalf of the Company (including the Company's Annual Report to Stockholders and Form 10-K) which contain statements relating to goals, plans and projections regarding its financial position, results of operations, market position and product development, among other things, which are based on current expectations that involve inherit risks and uncertainties including factors that would delay, divert or change one of them in the next several years.
These important factors include --
New government laws and regulations, such as (i) health care initiatives,
(ii) changes in the FDA and foreign regulatory approval processes which may cause delays in approving new products, (iii) tax changes such as the phasing out of tax benefits heretofore available in the United States and certain foreign countries.
Difficulties in developing new products; new products developed by competitors which have lower prices or superior performance features or which are otherwise competitive with the Company's current products; and generic competition as the Company's products go off patent, as well as possible problems with licensors.
Legal difficulties including negative results relating to patents; adverse decisions in litigation including the breast implant cases and other product liability cases; the inability to obtain adequate insurance with respect to this type of liability; recalls of pharmaceutical products or forced closings of manufacturing plants.
Increasing pricing pressures worldwide from managed care buyers and institutional and governmental purchasers; the impact of Year 2000 problems; and changes of business and economic conditions including, but not limited to, changes in interest rates and fluctuation of foreign currency exchange rates.
No assurance can be given that any goal or plan set forth in forward looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. The Company undertakes no obligation to release publicly any revisions to forward looking statements as a result of future events or developments.
E-8-1