SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o¨
Check the appropriate box:
| ¨ | Preliminary Proxy Statement | |||
| ¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |||
| þ | Definitive Proxy Statement | |||
| ¨ | Definitive Additional Materials | |||
| ¨ | Soliciting Material Pursuant to §240.14a-12 | |||
| Becton, Dickinson and Company | ||||
| (Name of Registrant as Specified In Its Charter) | ||||
| (Name of Person(s) Filing Proxy Statement, if other than the Registrant) | ||||
| Payment of Filing Fee (Check the appropriate box): | ||||
| þ | No fee required. | |||
| ¨ | ||||
| Fee computed on table below per Exchange ActRules 14a-6(i)(1) and0-11. | ||||
| (1) | Title of each class of securities to which transaction applies: | |||
| (2) | Aggregate number of securities to which transaction applies: | |||
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange ActRule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |||
| (4) | Proposed maximum aggregate value of transaction: | |||
| (5) | Total fee paid: | |||
| ¨ | Fee paid previously with preliminary materials. | |||
| Check box if any part of the fee is offset as provided by Exchange ActRule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | ||||
| (1) | Amount Previously Paid: | |||
| (2) | Form, Schedule or Registration Statement No.: | |||
| (3) | Filing Party: | |||
| (4) | Date Filed: | |||
1 Becton Drive
Franklin Lakes, New Jersey 07417-1880
07417-1880
December 22, 2010
Dear Fellow Shareholders:
You are cordially invited to attend the 20112013 Annual Meeting of Shareholders of Becton, Dickinson and Company (“BD”) to be held at 1:00 p.m. EST on Tuesday, February 1, 2011January 29, 2013 at Thethe Hilton Short Hills, 41 John F. Kennedy Parkway, Short Hills, New Jersey. You will find directions to the meeting on the back cover of the accompanying proxy statement.
The notice of meeting and proxy statement describe the matters to be acted upon at the meeting. We also will report on matters of interest to BD shareholders.
Your vote is important. Whether or not you plan to attend the Annual Meeting in person, we encourage you to vote so that your shares will be represented and voted at the meeting. You may vote by proxy on the internetInternet or by telephone, or by completing and mailing the enclosed proxy card in the return envelope provided. You may also vote in person at the Annual Meeting.
Thank you for your continued support of BD.
| Sincerely, |
 |
Vincent A. Forlenza |
Chairman, Chief Executive Officer and President |
Becton, Dickinson and Company
1 Becton Drive
Franklin Lakes, New Jersey07417-1880
December 22, 2010
The 20112013 Annual Meeting of Shareholders of Becton, Dickinson and Company (“BD”) will be held as follows:
| DATE: | Tuesday, | |||
| TIME: | 1:00 p.m. EST | |||
| LOCATION: | Hilton Short Hills 41 John F. Kennedy Parkway Short Hills, New Jersey | |||
| PURPOSE: | To consider and act upon the following proposals: | |||
1. | The election as directors of the | |||
2. | The ratification of the selection of the independent registered public accounting firm; | |||
3. | An advisory vote | |||
4. Approval of an amendment to BD’s Restated Certificate of Incorporation; | ||||
5. Approval of amendments to the | ||||
6. | ||||
| Such other business as may properly come before the meeting. |
Shares represented by properly executed proxies will be voted in accordance with the instructions specified therein. Shares represented by properly executed proxies that aredo not limited to the contraryprovide specific voting instructions will be voted in accordance with the recommendations of the Board of Directors set forth in this proxy statement, except that if no instructions are provided on Proposal 4, your shares will be voted as abstentions.
Important Notice Regarding the Availability of Proxy Materials for the 20112013 Annual Meeting of Shareholders to be held on February 1, 2011.January 29, 2013. BD’s proxy statement and 20102012 Annual Report, which includes BD’s consolidated financial statements, are available atwww.bd.com/investors/.
Shareholders of record at the close of business on December 10, 20107, 2012 will be entitled to attend and vote at the meeting.
| By order of the Board of Directors, |
 |
| GARY DEFAZIO |
| Vice President and Corporate Secretary |
It is important that your shares be represented and voted,
whether or not you plan to attend the meeting.
YOU CAN VOTE BY PROXY OR SUBMIT VOTING INSTRUCTIONS IN
ONE OF THREE WAYS:
| 1. | VIA THE INTERNET: |
Visit the website noted on your proxy/voting instruction card.
| 2. | BY TELEPHONE: |
Use the toll-free telephone number noted on your proxy/voting instruction card.
| 3. | BY MAIL: |
Promptly return your signed and dated proxy/voting instruction card in the enclosed envelope.
| 1 | ||||
| 1 | ||||
| 1 | ||||
| 1 | ||||
| 2 | ||||
| 2 | ||||
| 3 | ||||
| 3 | ||||
| 3 | ||||
| 3 | ||||
| 4 | ||||
| 5 | ||||
| 13 | ||||
| 14 | ||||
| 17 | ||||
| 17 | ||||
| 17 | ||||
| 18 | ||||
| 18 | ||||
| 19 | ||||
| 21 | ||||
| 22 | ||||
| 39 | ||||
| 39 | ||||
| 41 | ||||
| 43 | ||||
| 53 | ||||
| 54 | ||||
| 55 | ||||
PROPOSAL 4. AMENDMENT TO BD’S RESTATED CERTIFICATE OF | 55 | |||
| 56 | ||||
| 61 | ||||
SHAREHOLDER PROPOSALS OR DIRECTOR NOMINATIONS FOR 2014 ANNUAL MEETING | 62 | |||
| Back Cover |
20112013 ANNUAL MEETING OF SHAREHOLDERS
Tuesday, February 1, 2011January 29, 2013
BECTON, DICKINSON AND COMPANY
1 Becton Drive
Franklin Lakes, New Jersey07417-1880
These proxy materials are being mailed or otherwise sent to shareholders of Becton, Dickinson and Company (“BD”) on or about December Directors, officers and other BD associates also may solicit proxies by telephone or otherwise. Brokers and other nominees will be requested to solicit proxies or authorizations from beneficial owners and will be reimbursed for their reasonable expenses. BD has retained MacKenzie Partners, Inc. to assist in soliciting proxies for a fee not to exceed $25,000 plus expenses. The cost of soliciting proxies will be borne by BD.Proxy Solicitation22, 201020, 2012 in connection with the solicitation of proxies by the Board of Directors for BD’s 2013 Annual Meeting of Shareholders (the “2011 Annual Meeting”) to be held at 1:00 p.m. EST on Tuesday, February 1, 2011January 29, 2013 at the Hilton Short Hills, 41 John F. Kennedy Parkway, Short Hills, New Jersey.Important Notice Regarding the Availability of Proxy Materials for the 20112013 Annual Meeting of Shareholders to be held on February 1, 2011.January 29, 2013. This proxy statement and BD’s 20102012 Annual Report (the “2010 Annual Report”)to Shareholders are also available atwww.bd.com/investors/.
Shareholders of record at the close of business on December If your shares are held in the name of a bank, broker or other Shareholders Entitled to Vote; Attendance at the Meeting10, 20107, 2012 are entitled to notice of, and to vote at, the meeting. As of such date, there were 226,252,937195,850,121 shares of BD common stock outstanding, each entitled to one vote.holder of recordnominee (also known as shares held in “street name”) and you wish to attend the meeting, you must present proof of ownership as of the record date, such as a current bank or brokerage account statement, to be admitted. BD also may request appropriate identification as a condition of admission.
The holders of a majority of the shares entitled to vote at the meeting must be present in person or represented by proxy to constitute a quorum. Approval of Proposals 2, 3 and 5 requires the affirmative vote of a majority of the votes cast at the meeting. Approval of Proposal 4 requires the affirmative vote of two-thirds of the votes cast at the meeting. Under New Jersey law, abstentions and shares that brokers do not have the authority to vote in the absence of timely instructions from the beneficial owners Quorum; Required VoteAbstentionsDirectors are elected by a majority of the votes cast at the meeting (Proposal 1). This means that a director nominee will be elected to the Board only if the number of votes cast for the nominee exceeds the number of votes cast against that nominee.(“broker non-votes”) are treated as present for the purposes of determining a quorum.Directors are elected by a plurality of the votes cast at the meeting (Proposal 1). Under New Jersey law, abstentions and broker non-votes will not be counted as votes cast, and, accordingly, will have no effect on the outcome of the vote for directors. Under BD’s Corporate Governance Principles (the “Principles”), any nominee for director who receives a greater number of “withhold” votes than “for” votes is required to offer to submit his or her resignation from the Board following the shareholder vote. The Board will consider what action is to be taken with respect to the same. We will publicly disclose the Board’s decision. A more detailed description of these procedures is contained on page 20 under the heading “Corporate Governance—Significant Governance Practices—Voting for Directors” and in the Principles, which are available on BD’s website atwww.bd.com/investors/corporate_governance/. Printed copies of the Principles may be obtained, without charge, by contacting the Corporate Secretary, BD, 1 Becton Drive, Franklin Lakes, New Jersey07417-1880, phone1-201-847-6800.Approval of Proposals 2, 3, 5 and 6 requires the affirmative vote of a majority of the votes cast at the meeting. There is no minimum requisite affirmative vote under New Jersey law for Proposal 4. Abstentions and broker non-votes will not be counted as votes cast, and, accordingly, will not affect the outcome of these votes.Proposals. Proposal 2 is a
Shareholders of record may (1) using the (2) using the toll-free telephone number listed on the (3) signing, completing and returning the Votes cast through the If you are the beneficial owner of shares held in “street name,” you have the right to direct your bank, broker or other nominee on how to vote your shares by using the voting instruction form provided to you by them, or by following their instructions for voting through the Shares represented by properly executed proxies will be voted in accordance with the instructions specified therein. Shares represented by properly executed proxies that Savings Incentive Plan Participants in SIP, BD’s 401(k) plan, may instruct the SIP trustee how to vote all shares of BD common stock allocated to their SIP accounts. The SIP trustee will vote the SIP shares for which it Participants in Other Plans Participants in BD’s Deferred Compensation and Retirement Benefit Restoration Plan (“DCP”), the 1996 Directors’ Deferral Plan (“DDP”), and GSIP (if so provided under the terms of the local country GSIP plan) may provide voting instructions for all shares of BD common stock allocated to Proxies representing shares of BD common stock held of record also will serve as proxies for shares held under the Direct Stock Purchase Plan sponsored and administered by Computershare Trust Company, N.A. and any shares of BD common stock allocated to participants’ accounts under the plans mentioned above, if the registrations are the same. Separate mailings will be made for shares not held under the same registrations.How to Vote attend and cast their votes at the meeting. In addition, shareholders of record may cast their votevotes by proxy, and participants in the BD plans described below may submit their voting instructions, by:internetInternet and voting at the website listed on the enclosed proxy/voting instruction card (the “proxy card”);enclosed proxy card; or enclosed proxy card in the enclosed postage-paid envelope.internetInternet and telephone votes are authenticated by use of a personal identification number. This procedure allows shareholders to appoint a proxy, and the various plan participants to provide voting instructions, and to confirm that their actions have been properly recorded. Specific instructions to be followed are set forth on the enclosed proxy card. If you vote through the internetInternet or by telephone, you do not need to return your proxy card.In order to be timely processed, voting instructions submitted by participants in BD’s Global Share Investment Program (“GSIP”) must be received by 12:00 p.m. EST on January 26, 2011,23, 2013, and voting instructions submitted by participants in all other BD plans must be received by 12:00 p.m. EST on January 28, 2011.25, 2013. All proxies submitted by record holders through the internetInternet or by telephone must be received by 11:00 a.m. EST on February 1, 2011.January 29, 2013.internetInternet or by telephone. In the alternative, you may vote in person at the meeting if you obtain a valid proxy from your bank, broker or other nominee and present it at the meeting.aredo not limited to the contraryspecify voting instructions will be voted in accordance with the recommendations of the Board of Directors set forth in this proxy statement, except that if no instructions are provided on Proposal 4, your shares will be voted as abstentions.statement.(SIP)(“SIP”)hasdoes not receivedreceive instructions in the same proportion as the SIP shares for which it has receiveddoes receive instructions.Participants in the Savings Incentive Plan of Med-Safe Systems, Inc., a wholly-owned subsidiary of BD (the “Med-Safe Plan”), may instruct the Med-Safe Plan’s trustee how to vote all shares of BD common stock allocated to their accounts. The Med-Safe Plan’s trustee will vote shares for which it has not received instructions in the same proportion as the shares for which it has received instructions.that person’stheir plan account. Trusteesaccounts. The trustees of DCP, DDP and GSIPthese plans will vote the plan shares for which they havedo not receivedreceive instructions in the same proportion as the plan shares for which they have receiveddo receive instructions.2
A proxy given by a shareholder of record may be revoked at any time before it is voted by sending written notice of revocation to the Corporate Secretary of BD at the address set forth above or delivering such notice at
the meeting, by delivering a proxy (by one of the methods described above under the heading “How to Vote”) bearing a later date, or by voting in person at the meeting. Participants in the plans described above may change their voting instructions by delivering new voting instructions by one of the methods described above under the heading “How to Vote.”
If you are the beneficial owner of shares held in “street name,” you may submit new voting instructions in the manner provided by your bank, or broker or other nominee, or you may vote in person at the 2011 Annual Meetingmeeting in the manner described above under the heading “How to Vote.”
The Board of Directors is not aware of any matters to be presented at the meeting other than those set forth in the accompanying notice. If any other matters properly come before the meeting, the persons named in the proxy card will vote on such matters in accordance with their best judgment.Other MattersMultiple BD shareholders who share an address may receive only one copy of this proxy statement and the 2010 Annual Report from their bank, broker or other nominee, unless contrary instructions are received. We will deliver promptly a separate copy of this proxy statement and the 2010 Annual Report to any BD shareholder who resides at a shared address and to which a single copy of the documents was delivered, if the shareholder makes a request by contacting the Corporate Secretary, BD, 1 Becton Drive, Franklin Lakes, New Jersey07417-1880, phone 1-201-847-6800. Beneficial owners sharing an address who are receiving multiple copies of this proxy statement and the 2010 Annual Report and who wish to receive a single copy in the future will need to contact their bank, broker or other nominee.OWNERSHIP OF BD COMMON STOCK
The following table sets forth as of September 30, Securities Owned by Certain Beneficial Owners2010,2012, information concerning those persons known to BD to be the beneficial owner of more than 5% of BD’s outstanding common stock. This information is as reported by such persons in their Schedule 13G filings with the Securities and Exchange Commission (“SEC”). Amount and Nature of Name and Address of Beneficial Owner Beneficial Ownership Percent of Class State Street Corporation
State Street Bank and Trust Company, Trustee
State Street Financial Center
One Lincoln Street
Boston, MA 02111 13,224,021(1 ) 5.6 %
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | ||||||
State Street Corporation | 13,108,193 | (1) | 6.6 | % | ||||
Vanguard Group, Inc. | 10,430,843 | (2) | 5.2 | % | ||||
| (1) | The owner has shared investment power |
| (2) | The owner has shared investment power with respect to 345,622 shares, sole investment power with respect to 10,085,221 shares, and sole voting power with respect to 351,639 shares. |
The following table sets forth as of Except as indicated in the footnotes to the table, each person has the sole power to vote and transfer the shares he or she beneficially owns.Securities Owned by Directors and ManagementNovember 30, 2010December 1, 2012 information concerning the beneficial ownership of BD common stock by (i) each director, (ii) the executive officers named in the Summary Compensation Table on page 37,39, and (iii) all BD directorsnominees for director and executive officers as a group.group (except that the holdings of Mr. Elkins, who resigned from BD effective November 9, 2012, are shown as of that date). In general, “beneficial ownership” includes those shares that a director or executive officer has the sole or shared power to vote or transfer, including shares that may be acquired under outstanding equity compensation awards or otherwise within 60 days of such date.No individual director or executive officer owns more than 1% of the outstanding BD common stock. Together, the directors and executive officers, as a group, owned approximately 1.1% of the outstanding BD common stock as of November 30, 2010. days.3 None of the shares listed below have been pledged as security.
| Amount and Nature of | ||||||||||||||||
| Beneficial Ownership | ||||||||||||||||
| Shares Owned | Shares That May Be | |||||||||||||||
| Directly and | Acquired within | Total Shares | Percentage of | |||||||||||||
Name | Indirectly (1) | 60 days (2) | Beneficially Owned | Class | ||||||||||||
| Basil L. Anderson | 5,857 | 12,856 | 18,713 | * | ||||||||||||
| Henry P. Becton, Jr. (3) | 267,626 | 22,629 | 290,255 | * | ||||||||||||
| Gary M. Cohen | 89,584 | 98,238 | 187,822 | * | ||||||||||||
| Edward F. DeGraan | 8,942 | 16,460 | 25,402 | * | ||||||||||||
| David V. Elkins | 0 | 8,211 | 8,211 | * | ||||||||||||
| Vincent A. Forlenza | 70,359 | 225,834 | 296,193 | * | ||||||||||||
| Claire M. Fraser-Liggett | 0 | 7,371 | 7,371 | * | ||||||||||||
| Christopher Jones | 264 | 1,147 | 1,411 | * | ||||||||||||
| William A. Kozy | 62,102 | 169,540 | 231,642 | * | ||||||||||||
| Marshall O. Larsen | 1,689 | 5,709 | 7,398 | * | ||||||||||||
| Edward J. Ludwig | 254,539 | 758,015 | 1,012,554 | * | ||||||||||||
| Adel A.F. Mahmoud | 112 | 7,371 | 7,483 | * | ||||||||||||
| Gary A. Mecklenburg | 3,220 | 12,856 | 16,076 | * | ||||||||||||
| Cathy E. Minehan | 4,000 | 5,709 | 9,709 | * | ||||||||||||
| James F. Orr | 11,645 | 16,460 | 28,105 | * | ||||||||||||
| Willard J. Overlock, Jr. | 38,794 | 21,568 | 60,362 | * | ||||||||||||
| Bertram L. Scott | 8,404 | 19,241 | 27,645 | * | ||||||||||||
| Alfred Sommer | 12,655 | 16,460 | 29,115 | * | ||||||||||||
| Directors and executive officers as a group (23 persons) | 901,728 | 1,664,894 | 2,566,622 | 1.1 | % | |||||||||||
| Amount and Nature of Beneficial Ownership | ||||||||||||||||
Name | Shares Owned Directly and Indirectly (1) | Shares That May Be Acquired Within 60 Days (2) | Total Shares Beneficially Owned | Percentage of Class | ||||||||||||
Basil L. Anderson | 6,120 | 17,374 | 23,494 | * | ||||||||||||
Henry P. Becton, Jr. (2) | 187,207 | 21,037 | 208,244 | * | ||||||||||||
Catherine M. Burzik | 0 | 0 | 0 | * | ||||||||||||
Gary M. Cohen | 73,116 | 172,649 | 245,765 | * | ||||||||||||
Edward F. DeGraan | 11,596 | 21,037 | 32,633 | * | ||||||||||||
David V. Elkins | 120 | 66,398 | 66,518 | * | ||||||||||||
Vincent A. Forlenza | 79,199 | 813,662 | 892,861 | * | ||||||||||||
Claire M. Fraser | 0 | 11,739 | 11,739 | * | ||||||||||||
Christopher Jones | 2,266 | 5,237 | 7,503 | * | ||||||||||||
William A. Kozy | 65,242 | 457,162 | 522,404 | * | ||||||||||||
Marshall O. Larsen | 2,549 | 10,004 | 12,553 | * | ||||||||||||
Adel A.F. Mahmoud | 118 | 11,739 | 11,857 | * | ||||||||||||
Gary A. Mecklenburg | 4,310 | 17,374 | 21,684 | * | ||||||||||||
James F. Orr | 12,122 | 21,037 | 33,159 | * | ||||||||||||
Willard J. Overlock, Jr. | 29,448 | 21,037 | 50,485 | * | ||||||||||||
Rebecca W. Rimel | 148 | 1,143 | 1,291 | * | ||||||||||||
Bertram L. Scott | 10,818 | 23,818 | 34,636 | * | ||||||||||||
Jeffrey S. Sherman | 14,454 | 122,064 | 136,518 | * | ||||||||||||
Alfred Sommer | 13,222 | 16,601 | 29,823 | * | ||||||||||||
Directors and executive officers as a group (23 persons) | 555,960 | 2,094,758 | 2,650,718 | 1.2 | % | |||||||||||
| * | Represents less than 1% of the outstanding BD common stock. | |
| (1) | Includes shares held directly, and, with respect to executive officers, indirect interests in BD common stock held under the SIP and the DCP, and, with respect to the non-management directors, indirect interests in BD common stock held under the DDP. Additional information on certain of these plans appears onpages | |
| (2) | Includes shares under outstanding stock options or stock appreciation rights that are exercisable or become exercisable within 60 | |
| (3) | Includes |
4
| (c) | ||||||||||||
| (a) | (b) | Number of securities | ||||||||||
| Number of securities | Weighted-average | remaining available for | ||||||||||
| to be issued upon | exercise price of | future issuance under | ||||||||||
| exercise of | outstanding | equity compensation plans | ||||||||||
| outstanding options, | options, warrants | (excluding securities | ||||||||||
Plan Category | warrants and rights | and rights(1) | reflected in column (a)) | |||||||||
| Equity compensation plans approved by security holders | 17,348,842 | (2) | $ | 55.74 | 10,633,962 | (3) | ||||||
| Equity compensation plans not approved by security holders | 2,237,931 | (4) | $ | 34.95 | 0 | (5) | ||||||
| Total | 19,586,773 | $ | 55.70 | 10,633,962 | ||||||||
5
Section 16(a) of the Securities Exchange Act of 1934 requires BD’s directors and executive officers to file initial reports of their ownership of BD’s equity securities and reports of changes in such ownership with the SEC and the NYSE. Directors and executive officers are required by SEC regulations to furnish BD with copies of all Section 16(a) forms they file with respect to BD securities. Based solely on a review of copies of such forms and written representations from BD’s directors and executive officers, BD believes that, for the period from October 1, 20092011 through September 30, 2010,2012, all of its directors and executive officers were in compliance with the disclosurereporting requirements of Section 16(a), except that reports for one transaction by each of Marshall O. Larsen and Scott P. Bruder, and a report for two transactions by Willard J. Overlock, Jr., werewith respect to the November 2011 equity compensation grant made to Gary M. Cohen was inadvertently filed late.
6
| Proposal 1. | ELECTION OF DIRECTORS |
BD directors have a variety of backgrounds, that represent a rich portfolio that ably serves BD’s governance and strategic needs, andwhich reflects the Board’s continuing objectiveefforts to achieve a diversity of viewpoint, experience, background, knowledge, geography, ethnicity and gender. As more fully discussed under “Director Nomination Process” below, director nominees are considered on the basis of a range of criteria, including their broad-based business knowledge and background, prominence and excellent reputationsreputation in their primary fields, of endeavor, together with a global business perspective and commitment to strong corporate citizenship. They must also have demonstrated experience and ability that is relevant to the Board’s oversight role with respect to BD’s business and affairs. Each director’snominee’s biography includes the particular experience and qualifications that led the Board to conclude that the directornominee should serve on the Board.
 | ||
 | Basil L. Anderson, Mr. Anderson has an extensive business and financial background as both an operating executive and as a chief financial officer of major multinational public companies. His experience includes strategic, business and financial planning and | |
  | Henry P. Becton, Jr., Mr. Becton possesses a broad range of operational, financial and corporate governance experience developed through his professional and board-related activities in a variety of contexts. This broad background is coupled with Mr. Becton’s extensive knowledge of BD, which provides him with a unique perspective on BD. | |
7
 | Catherine M. Burzik, 62, served as President and Chief Executive Officer of Kinetic Concepts, Inc., a medical device company specializing in the fields of woundcare and regenerative medicine, from 2006 until January 2012 following the sale of the company. Ms. Burzik currently serves as Chair of the Board of Directors of VitaPath Genetics, Inc. and as Chair of the San Antonio Branch of the Dallas Federal Reserve Board. Previously, Ms. Burzik was President of Applied Biosystems; President of Ortho-Clinical Diagnostics, Inc., a Johnson & Johnson company; and held senior executive roles at Eastman Kodak Company. Ms. Burzik was formerly a director of Allscripts Healthcare Solutions, Inc. Ms. Burzik is a seasoned executive in the healthcare industry, having led major medical device, diagnostic, diagnostic imaging and life sciences businesses. She contributes strong strategic and leadership expertise, and extensive knowledge of the global healthcare field. | |
 | ||
 | Edward F. DeGraan, Mr. DeGraan brings extensive operational, manufacturing and executive experience in a consumer industry with a strong manufacturing base. He possesses a broad background in strategic, business and financial planning and operations, deepened by his global perspective developed through his long tenure with a multinational company. | |
  | Vincent A. Forlenza, 59, has been a director since October 2011, and became BD’s Chairman in July 2012. He was elected BD’s Chief Executive Officer in October 2011 and has served as its President since January 2009. He also served as BD’s Chief Operating Officer from July 2010 to October 2011, and prior thereto, served as Executive Vice President. Mr. Forlenza has been with BD for over thirty years in a number of different capacities, including strategic planning, marketing, general management in all three of BD’s segments, and overseas roles. Mr. Forlenza brings to the Board extensive business and industry experience, and provides the Board with a unique perspective on BD’s strategy and operations, particularly in the area of new product development. | |
 | Claire M. Dr. | |
 | ||
 | Christopher Jones, Mr. Jones contributes an important international perspective based on his distinguished career as a marketing leader | |
  | Marshall O. Larsen As a veteran chief executive officer of a public company, Mr. Larsen offers the valuable perspective of an individual with highly-developed executive leadership and financial and strategic management skills in a global manufacturing company. These qualities reflect considerable domestic and international business and financial experience. | |
8
  | ||
 | Adel A.F. Mahmoud, M.D., Ph.D Dr. Mahmoud is a distinguished scientist, physician and business leader with broad and deep knowledge of infectious diseases and vaccines. He brings strong technical, strategic and operational experience as a former senior executive with a major global pharmaceutical company, as well as an extensive academic background. | |
 | ||
 | Gary A. Mecklenburg Mr. Mecklenburg’s long tenure in hospital administration affords him a broad perspective on the many facets of the delivery of healthcare and a deep knowledge of healthcare financing and administration. As the former leader of a major teaching hospital, Mr. Mecklenburg possesses strong executive management, financial, strategic and operational knowledge as applied in a healthcare setting. | |
  | ||
9
 | James F. Orr Mr. Orr contributes the important insights of a former chief executive officer of a public company. His background reflects | |
  | Willard J. Overlock, Jr., Mr. Overlock has | |
  | Rebecca W. Rimel, 61, has been a director since July 2012. Since 1994, she has served as President and Chief Executive Officer of The Pew Charitable Trusts, a public charity that provides grants to improve public policy and support community service. Ms. Rimel previously served as Assistant Professor in the Department of Neurosurgery at the University of Virginia Hospital and also as Head Nurse of its medical center emergency department. Ms. Rimel also is a director of CardioNet, Inc., a director/trustee of various DWS mutual funds, and a trustee of Washington College. Ms. Rimel was added to the Board due to her executive leadership and her extensive experience in public policy and advocacy, particularly in the area of healthcare. She also brings to the Board the perspective of someone with a strong background in the healthcare field. | |
 | Bertram L. Scott Mr. Scott possesses strong strategic, operational and financial experience | |
  | Alfred Sommer, M.D., M.H.S., Dr. Sommer is a renowned clinician, researcher and academic administrator with substantial and | |
The Board of Directors recommends a vote FOR each of the nominees for director.
10
BD is governed by a Board of Directors that currently consists of 14 members, 13 of whom have been determined by the Board to be independent. The Board has established five Committees: the Executive Committee,four operating committees (the “Committees”): the Audit Committee,Committee; the Compensation and Benefits Committee the Corporate and Scientific Affairs Committee, and(the “Compensation Committee”); the Corporate Governance and Nominating Committee (the “Governance Committee”); and the Science, Innovation and Technology Committee. AllThese Committees meet regularly, except for theregularly. The Board has also established an Executive Committee whichthat meets only as necessary.needed. Committee meetings may be called by the Committee chair, the Chairman of the Board or a majority of Committee members. The Board has adopted written charters for each of the Committees that are posted on BD’s website atwww.bd.com/investors/corporate_governance/. Printed copies of these charters, BD’s 20102012 Annual Report onForm 10-K, and BD’s reports and statements filed with or furnished to the SEC, may be obtained, without charge, by contacting the Corporate Secretary, BD, 1 Becton Drive, Franklin Lakes, New Jersey07417-1880, telephone201-847-6800.
Set forth below is a summary description of each of the AUDIT COMMITTEE Function Retains and reviews the qualifications, independence and performance of BD’s registered public accounting firm (the “independent auditors”). Reviews BD’s public financial disclosures and financial statements, and its accounting principles, policies and practices; the scope and results of the annual audit by the independent auditors; BD’s internal audit process; and the effectiveness of BD’s internal control over financial reporting. Reviews BD’s guidelines and policies relating to enterprise risk assessment and risk management, and management’s plan for risk mitigation or remediation. Oversees BD’s ethics and enterprise compliance practices. Reviews financial strategies regarding currency, interest rates and use of derivatives, and reviews BD’s insurance program. Functions as a qualified legal compliance committee, if necessary. Basil L. Anderson—Chair Christopher Jones Marshall O. Larsen Gary A. Mecklenburg James F. Orr Rebecca W. Rimel Bertram L. Scott The Board has determined that the members of the Audit Committee meet the independence and financial literacy COMPENSATION AND BENEFITS COMMITTEE Function Reviews BD’s compensation and benefits policies, recommends the compensation of the Chief Executive Officer to the non-management members of the Board for their approval, and approves the compensation of BD’s other executive officers. Approves all employment, severance and change of control agreements of BD with executive officers. Serves as the granting and administrative committee for BD’s equity compensation plans. Oversees certain other BD benefit plans. Basil L. Anderson Marshall O. Larsen James F. Orr Willard J. Overlock, Jr. Bertram L. Scott The Board has determined that each member of the Compensation Procedure for Determining Executive Compensation The Compensation Role of Management The Compensation The Compensation Role of the Independent The Compensation or BD’s management without the Compensation Committee’s prior approval, and Pay Governance reviews all materials prepared for the Compensation Pay Governance also conducts an annual review of the compensation practices of select peer companies. Based on this review, Pay Governance advises the Compensation Setting Compensation At the end of each fiscal year, the Board conducts a review of the Chief Executive Officer’s performance. The Compensation The Board has delegated responsibility for formulating recommendations regarding non-management director compensation to the Function Oversees BD’s research and development activities. Oversees BD’s strategic marketing activities as they relate to BD’s innovation agenda. Oversees BD’s policies, practices and procedures relating to regulatory compliance and product quality and safety. Alfred Sommer—Chair Henry P. Becton, Jr. Claire M. Fraser Christopher Jones Adel A.F. Mahmoud Gary A. Mecklenburg Rebecca W. Rimel CORPORATE GOVERNANCE AND NOMINATING COMMITTEE Function Identifies and recommends candidates for election to the Board. Reviews the composition, structure and function of the Board and its Committees, as well as the performance and compensation of non-management directors. Monitors BD’s corporate governance and Board practices, and oversees the Board’s self-evaluation process. Oversees BD’s policies, practices and procedures impacting BD’s image and reputation and its standing as a responsible corporate citizen, including, without limitation, issues relating to communications with BD’s key stakeholders, community relations, and public policy and government relations activities. Henry P. Becton, Jr.—Chair Edward F. DeGraan Claire M. Fraser Adel A.F. Mahmoud Willard J. Overlock, Jr. Alfred Sommer The Board has determined that each member of the The Board and its Committees held the following number of meetings during fiscal year Board Audit Committee Compensation and Benefits Committee Corporate Governance and Nominating Committee Science, Innovation and Technology Committee The Executive Committee did not meet during fiscal year Each director attended 75% or more of the total number of the meetings of the Board and the Committees on which he or she served during fiscal year The Board has adopted a policy pursuant to which directors are expected to attend the Annual Meeting of Shareholders in the absence of a scheduling conflict or other valid reason. The Board believes that providing competitive compensation is necessary to attract and retain qualifiednon-management directors. The key elements of BD’s non-management director compensation are a cash retainer, equity compensation, Committee chair fees and Cash Retainer Each non-management director currently receives an annual cash retainer of Equity Compensation Each non-management director elected at an Annual Meeting of Shareholders is granted restricted stock units Committee Chair/Lead Director Fees An annual fee of Other Arrangements BD reimburses non-management directors for travel and other business expenses incurred in the performance of their services for BD. Directors may travel on BD aircraft in connection with such activities, and, on limited occasions, spouses of directors have joined them on such flights. No compensation is attributed to the director for these flights in the table below, since the aggregate incremental costs of Directors are eligible, on the same basis as BD The following table sets forth the compensation received by Fiscal Year Name Basil L. Anderson Henry P. Becton, Jr. Edward F. DeGraan Claire M. Fraser Christopher Jones Marshall O. Larsen Adel A.F. Mahmoud Gary A. Mecklenburg Cathy E. Minehan (5) James F. Orr Willard J. Overlock, Jr. Rebecca W. Rimel Bertram L. Scott Alfred Sommer Name Basil L. Anderson Henry P. Becton, Jr. Edward F. DeGraan Claire M. Fraser Christopher Jones Marshall O. Larsen Adel A.F. Mahmoud Gary A. Mecklenburg James F. Orr Willard J. Overlock, Jr. Rebecca W. Rimel Bertram L. Scott Alfred Sommer Directors’ Deferral Plan Directors may defer receipt of all or part of their annual cash retainer and other cash fees pursuant to the provisions of the 1996 Directors’ Deferral Plan. Directors may also defer receipt of shares issuable to them under their restricted stock Shareholders or other interested parties wishing to communicate with the Board, the non-management directors or any individual director (including complaints or concerns regarding accounting, internal accounting controls or audit matters) may do so by contacting the Lead Director either: by mail, addressed to BD Lead Director, P.O. Box 264, Franklin Lakes, New Jersey 07417-0264; by calling the BD Ethics Help Line, an independent toll-free service, at 1-800-821-5452 (callers from outside North America should use “AT&T Direct” to reach AT&T in the U.S. and then dial the above toll-free number); or All communications will be kept confidential and promptly forwarded to the Lead Director, who shall, in turn, forward them promptly to the appropriate director(s). Such items BD’s commitment to good corporate governance is embodied in The Board’s goal is to achieve the best board leadership structure for effective oversight and management of BD’s affairs. The Board believes that there is no single, generally accepted approach to providing board leadership, and that each possible leadership structure must be considered in the In connection with Vince A. Forlenza’s appointment as Chief Executive Officer in October 2011, succeeding Edward J. Ludwig, Mr. Ludwig continued to serve as the Chairman of the At the same time, the role of Lead Director, currently being served by Henry P. Becton, Jr., allows the non-management directors to provide independent Board leadership and oversight of management. The Principles provide for the appointment of a Lead Director from among the independent directors whenever the Chairman is not independent. The responsibilities of the Lead Director include: Presiding over executive sessions of the non-management directors and over Board meetings in the absence of the Chairman; Consulting on and approving Board agendas and meeting schedules; Ensuring the adequacy of the flow of information to the non-management directors; Together with the Chair of the Compensation Committee, coordinating the evaluation of the Chief Executive Officer by the non-management directors; Acting as a liaison between the non-management directors and the Chief Executive Officer; and Serving as a contact person to facilitate communications between BD’s associates, shareholders and other constituents and the non-management directors. The Board believes having an independent Lead Director provides independent oversight of management, including risk oversight, while avoiding the risk of confusion regarding the Board’s oversight responsibilities and theday-to-day management of BD’s management engages in a process referred to as In addition, The various Committees of BD’s Board are also responsible for monitoring and reporting on risks associated with their respective areas of With respect to our compensation policies and practices, BD’s management reviewed our policies and practices to determine whether they create risks that are reasonably likely to have a material adverse effect on BD. In connection with this risk assessment, The importance to BD. When considering individual director candidates, the The Candidates should be persons of high integrity who possess independence, forthrightness, inquisitiveness, good judgment and strong analytical skills. Candidates should demonstrate a commitment to devote the time required for Board duties, including, but not limited to, attendance at meetings. Candidates should be team-oriented and be committed to the interests of all shareholders as opposed to those of any particular constituency. The It is the To recommend a candidate for consideration, a shareholder should submit a written statement of the qualifications of the proposed nominee, including full name and address, to the Corporate Secretary, BD, 1 Becton Drive, Franklin Lakes, New Jersey07417-1880. Described below are some of the significant corporate governance practices that have been instituted by the BD Board. Annual Election of Directors BD’s Voting for Directors Under our By-Laws, in uncontested elections (where the number of nominees does not exceed the number of directors to be elected), nominees for director must receive the affirmative vote of a majority of the votes cast in order to be elected to the Board affirmative vote is required to offer to submit his or her resignation to the Board following the shareholder Board Equity Ownership by Directors The Board believes that directors should hold meaningful equity ownership positions in BD. To that end, Annual Report of Charitable Contributions In furtherance of BD’s commitment to good governance and disclosure practices, the Principles require that BD’s charitable contributions or pledges in an aggregate amount of $50,000 or more (not including contributions Under the oversight of the Audit Committee, BD’s enterprise compliance function Political Contributions We have a policy that prohibits the expenditure of company assets for political campaigns without the express authorization of the Chief Executive Officer or Chief Financial Officer, compliance with company policies and all applicable laws, and clearance from BD’s internal law department. Contributions outside the United States must also be approved by the relevant country leaders. In 2012, no corporate funds were used to support political campaigns. BD’s general prohibition on the use of corporate funds for political campaigns extends to “super PACs”. We have also advised the major industry associations in which BD has membership that we do not authorize them to use any portion of our dues or other funds for “super PACs” or any other political campaign purpose. Under the NYSE rules and The Board has determined that the following In determining that each of the The types of transactions with director-affiliated organizations considered by the Board The Board has also established a written policy (the “Policy”) requiring Board approval or ratification of transactions involving more than $120,000 per year than 5% of BD’s stock (excluding certain passive investors) or their immediate family members has, or will have, a material During fiscal year 2012, BD BD The Chief Ethics and Compliance Officer leads the BD Ethics Office, Any waivers from any provisions of the The The primary objective of the BD compensation program is to fully support the strategic business goal of delivering superior long-term shareholder returns through sustained revenue growth, EPS growth, Aligning the interests of executives and shareholders Through equity compensation and equity ownership guidelines for executives, we seek to align the interests of executives with those of the company’s shareholders. This represents the largest portion of our compensation structure in terms of target value. Linking rewards to performance We maintain a pay-for-performance philosophy based on actual performance as against clear, measurable company performance targets, particularly those metrics that support the creation of long-term shareholder value. Delivering superior business and financial results Performance targets are set to reward executives for achieving short- and long-term results in line with our objective of enhancing long-term shareholder value. In setting short-term goals and in rewarding performance, we will take care to ensure that we do not create incentives to take inappropriate risks. Offering a competitive compensation structure We have established and intend to maintain a competitive structure that supports the recruitment and retention of high-performance executives essential to driving the business results required to execute our strategy and create long-term value for shareholders. This structure is determined, in part, by evaluating peer group data, which is provided and analyzed by the Committee’s independent consultant, Pay Governance LLC. Maintaining a transparent compensation structure The Committee strives to provide absolute transparency to executives, employees and shareholders of all aspects of BD’s compensation and benefits structure. This includes disclosure of performance targets, payout formulas, details of other earned benefits and the Committee’s use of discretion in determining award payouts. Maintaining Committee independence The Committee is made up exclusively of independent directors and utilizes an independent compensation consultant, Pay Governance LLC, which, by Committee policy, is prohibited from performing any services for BD or its management without the Committee’s prior approval. Retaining prerogative to adjust programs The Committee retains the prerogative to change or modify compensation and benefit programs to reflect prevailing economic, market or company financial conditions. COMPENSATION AND BENEFITS COMMITTEE Edward F. DeGraan—Chair Basil L. Anderson Marshall O. Larsen James F. Orr Willard J. Overlock, Jr. Bertram L. Scott This section discusses our executive compensation program and the compensation actions taken with respect to the executive officers named in the Summary Compensation Table on page All references in this section to years are references to our fiscal year, which ends on September 30, unless otherwise noted. This section includes a discussion of performance targets in the limited context of our executive compensation program. These targets are not statements of management’s expectations of our future results or other guidance. Investors should not use or evaluate these targets in any other context or for any other purpose. Executive Summary Overview of our compensation program Our goal is to provide an executive compensation program that best serves the long-term interests of our shareholders. We believe that attracting and retaining superior talent is a key to delivering The following is a summary of important aspects of our executive compensation program discussed later in this section. The key elements of our program are salary, annual cash incentives under our Performance Incentive Plan (“PIP”) and long-term equity compensation consisting of stock-settled stock appreciation rights (“SARs”), Performance Units and Time-Vested Units (“TVUs”). We emphasize pay-for-performance to align executive compensation with our business strategy and the creation of long-term shareholder value. While we emphasize “at risk” pay tied to performance, we believe our program does not encourage excessive risk taking by management. Our executives are subject to robust share ownership guidelines and are prohibited from hedging against the economic risk of such ownership. We offer our named executive officers very limited perquisites, and none of them have employment agreements. We have a compensation recovery policy that gives the Board discretion to recover incentive compensation paid to senior management We have “double-trigger” change of control agreements with our The independent consultant to the Compensation and Benefits Committee (the “Compensation Committee”) BD delivered solid results in 2012, driven by strong growth in safety-engineered device sales and in emerging markets. Similar to 2011, the medical device industry continued to face continued to put downward pressure on healthcare utilization in Western Europe and the U.S. and increased pricing pressure for certain products in our Medical segment. Our Biosciences segment was also unfavorably impacted in developed markets by an uncertain academic research spending environment for high-end instruments and increased competitiveness in research reagents. Despite these ongoing challenges, management continued to execute on BD’s strategy and delivered solid results for the year. Highlights of our performance include: Reported revenues grew about 1.6%, We reported earnings per share from continuing operations (“EPS”) of $5.30. While this was a slight decrease from the prior year, after excluding a $0.06 per share charge resulting from primarily non-cash pension settlements and a negative effect of $0.21 per share from foreign currency translation, our EPS was $5.58 (adjusted for rounding), representing about 5% underlying growth for the year. This growth came even after absorbing additional costs from unbudgeted acquisitions during the year. We continued to use our strong financial condition to position BD for long-term growth, including investments in Significant progress was made on BD’s operating efficiency initiatives. These include the initial roll-out of Project Everest (our enterprise resource planning upgrade), savings realized from ReLoCo (our program to reduce manufacturing costs), and our We completed the acquisition of Kiestra Lab Automation, a maker of innovative automation solutions for microbiology laboratories, and of Sirigen Group Limited, a developer of unique dyes for flow cytometry, as part of our We announced plans to sell the majority of We returned Based on BD’s performance, BD’s revenues were slightly above the revenue target and its EPS was at 98% of Objectives of Our Executive Compensation Program The objectives of our executive compensation program include: Offering competitive compensation. We seek to offer a competitive compensation package that helps us attract and retain our executives. Linking compensation to performance. We seek to implement apay-for-performance philosophy by Aligning executives with our shareholders. We seek to align the interests of our executives with those of our shareholders through equity compensation and share ownership guidelines. The Process for Setting Executive Compensation The role of the Compensation Committee, its consultant and management The Compensation Committee oversees the compensation program for the named executive officers and our other executive officers. The Compensation Committee is assisted in fulfilling its responsibilities by its independent consultant, Pay Governance LLC (“Pay Governance”), and BD’s senior management. Additional information about our process for setting executive compensation, including the role of Pay Governance and management, may be found on pages Approximately 95% of the shares voted last year were cast in support of BD’s advisory vote on executive compensation. The Compensation Committee viewed the results of this vote as general broad shareholder support for our executive compensation program. Based on this result and our ongoing review of our compensation policies and decisions, we believe that our existing compensation program effectively aligns the interests of our named executive officers with the long-term goals of BD. The use of market comparison data The Compensation Committee considers a number of factors in structuring our program and making compensation decisions. This includes the compensation practices of select peer companies in the healthcare industry, which we refer to as the “Comparison Group.” These companies were chosen by the Compensation Committee after considering the recommendations of Pay Governance and management, and were selected because they have significant lines of business that are similar to BD’s. The Compensation Committee believes that reference to the Comparison Group is appropriate when reviewing BD’s compensation program because it believes we compete with these companies for executive talent. The Compensation Committee reviews the composition of the Comparison Group at least annually. The companies in the Comparison Group Abbott Laboratories Agilent Technologies, Inc. Allergan, Inc. C.R. Bard, Inc. Baxter International Inc. Boston Scientific Corporation Covidien plc Hospira, Inc. Johnson & Johnson Medtronic, Inc. PerkinElmer, Inc. Roche Diagnostics St. Jude Medical, Inc. Stryker Corporation Thermo Fisher Scientific Inc. Zimmer Holdings, Inc. Abbott Laboratories, Johnson & Johnson and Roche Diagnostics are included in the Comparison Group in order to increase the number of comparable positions for which compensation data is The table below sets forth revenue and market capitalization information regarding the 25th Percentile Median 75th Percentile BD Percentile Rank The Compensation Committee attempts to set the compensation of our executive officers at levels that are competitive with the Because the Compensation Committee reviews each compensation element The use of tally sheets The Compensation Committee is from time-to-time provided a “tally sheet” report prepared by management for each named executive officer. The tally sheet includes, among other things, total annual compensation, the value of unexercised or unvested equity compensation awards, and amounts payable upon termination of employment under various circumstances, including retirement or following a change of control. The Compensation Committee uses tally sheets to provide perspective on the wealth the executives have accumulated from prior equity awards and plan accruals and their retentive value, consider any changes to our program that may be appropriate (including the mix of compensation elements), and provide additional context for their compensation decisions. Performance-based compensation While we do not use a specific formula to determine the mix of performance-based and fixed compensation, PIP awards and performance-based long-term equity compensation represent a significant portion of the compensation paid to our The above charts are based on the target values of performance-based compensation. Actual amounts received (and the percentage of total compensation coming from performance-based compensation) may differ based on actual performance and BD’s stock price. How BD measured performance in 2012 The goal of our compensation program is to provide incentives for management to deliver near-term and long-term performance. The vehicle for rewarding near-term performance is the PIP. For 2012, the Compensation Committee evaluated performance under this plan based primarily on BD’s EPS for the year. The Compensation Committee used EPS because it is the primary basis on which BD sets performance expectations for the year and it is a widely-used measure of overall company performance. However, because the Compensation Committee believes sustained revenue growth is necessary to create long-term shareholder value, it also set a revenue target for the year, although not weighted as heavily as EPS. The vehicle for rewarding long-term performance is equity compensation, including Performance Units. The Compensation Committee evaluates long-term performance based on how well BD is executing on its strategy for profitable growth. For the Performance Units granted in 2012, the two metrics the Compensation Committee used to measure performance were long-term revenue growth and return on invested capital (“ROIC”), which measures profitability and how effectively company assets are being used. These two metrics require the named executive officers to effectively manage a number of different aspects of the business, including new product introductions, productivity improvements and expansion into geographic markets. The other way equity compensation is tied to our long-term performance is its linkage to the BD stock price. We believe that sustained performance should, over time, result in the creation of long-term shareholder value and be reflected in our stock price. If the named executive officers are not successful in creating this shareholder value, the value of their equity compensation will be reduced. When setting performance targets for the PIP and Performance Units, the Compensation Committee considers the environment in which BD is operating. As discussed before, the global economy generally, and the healthcare industry specifically, has been facing very challenging conditions over the last several years. The Compensation Committee seeks to reward what it deems to be superior performance by management in light of the economic conditions and growth trends in the markets BD serves, and sets what it believes are reasonably achievable performance targets for BD at the time. The Compensation Committee also structures these plans so that payouts are aligned with BD’s performance against these targets. For instance, as discussed further below, a 1% shortfall in performance against a PIP performance measure target would result in a 2.5% decrease in funding with respect to that measure. Likewise, a 1% shortfall in performance against the revenue growth target set under the Performance Units we issued in 2012 would reduce the payout of the awards by 12%. Changes to performance-based compensation for 2013 Previously, BD’s compensation programs have been focused on key financial indicators of operating success, including revenue growth, EPS and ROIC. Over the past few years, our industry has changed and become more challenging based on a variety of factors. Looking ahead, we believe the strategic objectives for BD will include not only revenue growth, EPS and ROIC, but also operational efficiency, which frees up funds that BD can use to invest in its future. Therefore, it will be important that going forward, our compensation program reinforce and reward behaviors that support a balance of growth, profitability and operating efficiency. In addition, given the current market conditions, we believe it is important to incorporate a measure of BD’s performance that relates BD’s performance to peer companies facing these same market conditions. With this in mind, during 2012, the Compensation Committee, with input and recommendations from Pay Governance and management, conducted a review of BD’s annual and long-term incentive compensation to identify ways to improve the overall design of our executive compensation program. Based on this evaluation, the Compensation Committee approved the following changes for 2013. PIP. Free cash flow as a percentage of sales will be added as a third performance metric, in addition to the existing revenue and EPS metrics. EPS will be weighted 50%, and the revenue and free cash flow metrics will each be weighted 25%. “Free cash flow” means cash flow from our operating activities, less capital expenditures and capitalized software. The free cash flow as a percentage of sales metric was added because efficient use of cash is an important driver of our ability to fund ongoing product development and innovation, a key strategic priority for BD. Adding this free cash flow metric also provides for a more balanced set of performance targets that focus on both profitability and operating efficiency. Equity Compensation. The Compensation Committee changed the performance metrics for the Performance Units issued in 2013, replacing revenue growth with relative total shareholder return (“TSR”). Relative TSR measures BD’s stock performance (assuming reinvestment of dividends) during the performance period against that of peer companies. Relative TSR and ROIC will both be weighted 50% in determining Performance Unit payouts. The Compensation Committee chose relative TSR as a new performance metric because it allows payouts to be based on how BD’s performance, as reflected in our stock price over time, compares to peer companies facing similar business conditions, and it is directly tied to shareholder outcomes. A majority of Comparison Group companies that include performance-based stock units in their equity compensation use relative TSR as a performance metric. Our risk analysis of performance-based compensation While a significant portion of executive compensation is performance-based, we do not believe that our program encourages excessive or unnecessary risk-taking. While risk-taking is a necessary part of operating and growing a business, the Compensation Committee focuses on aligning BD’s compensation policies with our long-term strategy and attempts to avoid short-term rewards for management decisions that could pose long-term risks to BD. This includes: Limits on PIP Share Ownership Guidelines. Our share ownership guidelines ensure that our executives have a significant amount of their personal wealth tied to long-term holdings in BD stock. Use of Long-Term Equity Compensation. The largest Use of Performance Units. Performance Metrics. We use a variety of performance metrics The key elements of our executive compensation program are summarized in the table below. Component Description Purpose Base salary Performance Incentive Plan Long-term equity compensation: ) ) ) ) ) ) ) ) Ÿ Time-Vested Units The Compensation Committee believes this combination of cash and equity compensation furthers the objectives of our executive compensation program. Based on prevailing market practices, the Compensation Committee How PIP Payments and Equity Compensation Are Awarded PIP The PIP provides our executives an opportunity to receive a cash The factors the Compensation Committee considers when setting PIP awards include BD’s overall performance for the year compared to the performance targets and the level of available funding (discussed below), as well as the executive’s target award and performance. CEO performance is measured against the performance goals for the year established by the Board. For the other named executive officers, the CEO provides an assessment to the Compensation Committee of how those executive officers performed against the performance objectives Performance As previously discussed, we use EPS as a performance target because it is the primary basis on which we set our performance expectations for the year and EPS is a widely-used measure of overall company performance. For this reason, EPS is more heavily weighted than Funding for PIP awards is determined by a formula. For both EPS and revenues, the Compensation Committee When comparing BD’s operating results against the performance targets, the Compensation Committee has the discretion to adjust The equity compensation awards made to the named executive officers in How equity Performance Unit awards are given a share target. The actual number of shares issued is determined by a grid, and can range anywhere from zero (if BD fails to meet the minimum performance threshold forbothrevenue growth and ROIC) to 200% of the share target (if BD meets or exceeds the maximum Compensation Actions Below is a discussion of compensation actions taken with respect to the named executive officers. Salary adjustments The base salaries of the named executive officers are reviewed each November, and any adjustments go into effect on January 1 of the following calendar year. In PIP awards The threshold performance, target performance and maximum performance under the PIP for EPS (75% weighting) Currency-neutral revenues (25% weighting)* Reported EPS for the year was The following table shows the PIP awards granted for Name Vincent A. Forlenza David V. Elkins William A. Kozy Gary M. Cohen Jeffrey S. Sherman The PIP awards made to the named executive officers, Equity compensation awards The Compensation Committee made the equity compensation awards to the named executive officers The Performance Units included in these awards cover the Payout of prior Performance Unit awards In November eliminate the effects of acquisitions and divestitures, and a charge relating to the pending settlement of certain antitrust cases, since this settlement did not relate to BD’s underlying performance. These adjustments increased the payout from 15% to 20%. 2010-2012 performance period In November 2012 (fiscal year 2013), Performance Units covering the 2010-2012 performance period vested. These awards had performance targets of 7% currency-neutral revenue growth and 32% ROIC. Our revenue growth and ROIC over the performance period were 3.9% and 27.2%, respectively. Based on our results over the performance period, there was no payout for these awards. Performance Unit payout trend As was stated earlier, BD has been operating in a challenging economic environment the last several years. The impact of global economic conditions on BD’s revenue growth and ROIC Performance Period 2007-2009 2008-2010 2009-2011 2010-2012 These reduced Performance Unit payouts have resulted in significant differences between the original grant date value of these Name Vincent A. Forlenza David V. Elkins William A. Kozy Gary M. Cohen Jeffrey S. Sherman Note: Realized values are determined based on the closing BD stock price on the vesting date and include deemed dividend reinvestment during the vesting period. Mr. Elkins’ first Performance Unit award was made in 2010 for the 2010-2012 period. Other Benefits Under Our Executive Compensation Program Company transportation Mr. Deferred compensation Our Deferred Compensation and Retirement Benefit Restoration Plan is an unfunded, nonqualified plan that, among other things, allows eligible associates to defer receipt of cash compensation and shares issuable under certain equity compensation awards. The plan is offered to our eligible associates as part of a competitive compensation program. It gives eligible associates the opportunity to defer compensation on a pre-tax basis in addition to what is allowed under our tax-qualified 401(k) plan. We offer retirement benefits for all of our U.S. associates. Because the Internal Revenue Code limits the maximum annual benefit that may be paid to an individual under our qualified Retirement Plan, we provide additional retirement benefits through our Change of control agreements We have General purpose. Our change of control agreements are intended to retain the executives and provide continuity of management in the event of an actual or Triggering events. Our agreements contain a “double trigger”—that is, there must be a change of control of BDanda termination of the executive’s employment in order for any payments to be made. We opted for a double-trigger, rather than a “single trigger” that provides for severance payments solely on the basis of a change of control, since a double trigger is consistent with the purpose of encouraging the continued employment of the provision. Other change of control provisions Upon a change of control, all outstanding equity compensation awards granted to our associates, including the named executive officers, immediately vest. Unlike the “double trigger” discussed above, no termination of employment is required for the accelerated vesting of the awards. This “single-trigger” vesting provides our associates with the same opportunity as our shareholders to realize the value created by the transaction. Recovery of prior compensation We have a policy that gives the Board the discretion to require a member of the BD Leadership Team to reimburse BD for any PIP award or Performance Unit payout that was based on financial results that were subsequently restated as a result of The policy also gives the Board the authority to require those members of the BD Leadership Team who were not involved in the misconduct to reimburse BD for the amount by which their PIP award or Performance Unit payouts exceeded the amount they would have received based on the restated results. Share retention and ownership guidelines In order to increase executive share ownership and promote a long-term perspective when managing our business, our share retention and ownership guidelines require the named executive officers and other members of the BD Leadership Team to retain, in shares of BD stock, 75% of the net after-tax proceeds from any equity compensation awards until the person achieves the required ownership level. The required ownership levels are as follows: Chief Executive Officer Other Executive Officers Other BD Leadership Team Members Shares held directly, shares held indirectly through our 401(k) plan and deferred compensation plan, and time-vested restricted stock units are included in determining a person’s share ownership. Timing of equity The Compensation Committee has adopted a policy that prohibits the backdating of any equity Tax considerations Section 162(m) of the Internal Revenue Code precludes BD from taking a federal income tax deduction for compensation paid in excess of $1 million to a named executive The following table shows the compensation provided by BD to each of the named executive officers. Name and Vincent A. Forlenza Chairman, Chief Executive Officer and President David V. Elkins(6) Former Executive Vice-President and Chief Financial Officer William A. Kozy Executive Vice- President and Chief Operating Officer Gary M. Cohen Executive Vice- President Jeffrey S. Sherman(8) Senior Vice- President and General Counsel Name Vincent A. Forlenza David V. Elkins William A. Kozy Gary M. Cohen Jeffrey S. Sherman Pension—Amounts shown are the aggregate changes in the actuarial present value of accumulated benefits under our defined benefit pension plans (including our restoration plan). These amounts represent the difference between the present value of accumulated pension benefits at normal retirement age (or, in the case of Messrs. Forlenza and Kozy, the earliest date they can retire without any reduction in benefits) at the beginning and end of the fiscal year. Deferred Compensation—Earnings on nonqualified deferred compensation are not included in this column, since no named executive officer earned above-market or preferential earnings on nonqualified deferred compensation during the fiscal years shown. Information on the named executive officers’ nonqualified deferred compensation accounts is on page Matching contributions under plans Matching charitable gifts Term life insurance Total The following is a description of these benefits: Matching Contributions Under Plans—The amounts shown reflect matching contributions made by BD pursuant to our 401(k) plan and deferred compensation plan. Term Life Insurance—BD provides incremental term life insurance benefits to certain named executive officers beyond those provided to BD associates generally. The amounts shown reflect the dollar value of the insurance premiums paid by BD for this incremental insurance. Set forth below is information regarding awards Grants of Plan-Based Awards in Fiscal Year Name Vincent A. Forlenza David V. Elkins William A. Kozy Gary M. Cohen Jeffrey S. Sherman PIP = Performance Incentive Plan TVU = Time-Vested Unit PU = Performance Unit SAR = Stock Appreciation Right Description of Awards Performance Incentive Plan The BD Performance Incentive Plan (“PIP”) provides an opportunity for annual cash incentive payments to eligible associates. A more detailed discussion of the PIP and the performance targets established under the PIP for fiscal year Performance Time-Vested Units. A Time-Vested Unit (“TVU”) is a restricted stock unit that represents the right to receive one share of BD common stock upon vesting. TVUs vest three years after grant. TVUs were issued in tandem with dividend equivalent rights (see below). TVUs are not transferable, and holders may not vote shares underlying the award until the shares have been distributed. Stock-Settled Stock Appreciation Dividend Equivalent Rights. Performance Units and TVUs are Change of The following table sets forth the outstanding equity awards held by the named executive officers at the end of fiscal year Outstanding Equity Awards at Name Vincent A. Forlenza David V. Elkins William A. Kozy Gary M. Cohen Jeffrey S. Sherman Name Vincent A. Forlenza David V. Elkins William A. Kozy Gary M. Cohen Jeffrey S. Sherman Grant Date Performance Period Grant Date Grant Date Grant Date Grant Date The following table contains information relating to the exercise of stock options and the vesting of Performance Units and TVUs during fiscal year Option Exercises and Stock Vested in Fiscal Year Name Vincent A. Forlenza William A. Kozy Gary M. Cohen David V. Elkins Jeffrey S. Sherman General. BD’s Retirement Plan is a non-contributory defined benefit plan that provides for normal retirement at age 65 and permits earlier retirement in certain cases. The Retirement Plan is generally available to all active full-time and part-time U.S. BD associates. The Retirement Plan provides benefits on either a “final average pay” basis or on a “cash balance” basis. Under the final average pay provisions, benefits are based upon an associate’s years of service and compensation for the five consecutive calendar years that produce the highest average annual compensation. The covered compensation includes salary, commissions and PIP awards. Under the cash balance provisions, an associate has an account that is increased by pay credits based on compensation, age and service, and interest credits based on the rate prescribed by the plan. The benefits for all associates joining BD after April 1, 2007 are calculated in accordance with the cash balance provisions of the Retirement Plan. Equity compensation is not included in calculating benefits under the plan. Messrs. Under the final average pay provisions, the Retirement Plan is integrated with Social Security, which means that BD provides a higher pension benefit with respect to an associate’s compensation that exceeds the Social Security wage base than on compensation that is subject to the Social Security tax. This feature of the Retirement Plan accounts for the fact that Social Security benefits will not be paid to the associate with respect to compensation that exceeds the Social Security wage base. Deferred Compensation and Retirement Benefit Restoration Plan. The Internal Revenue Code limits the maximum annual benefit that may be paid to an individual under the Retirement Plan and the amount of compensation that may be recognized in calculating these benefits. BD makes supplemental payments to its Deferred Compensation and Retirement Benefit Restoration Plan to offset any reductions in benefits that result from these limitations. BD’s obligations to pay retirement benefits under the Deferred Compensation and Retirement Benefit Restoration Plan are funded through a trust. The trust is currently secured by a letter of credit. The trustee is required to draw on the letter of credit, up to specified limits, following a change of control of BD (as defined in the trust agreement). Estimated Benefits. The following table shows the lump sum actuarial present value on September 30, 2012 of accumulated retirement benefits payable under our plans at PENSION BENEFITS AT Name Plan name Number of years credited service Present value of accumulated benefit Vincent A. Forlenza David V. Elkins William A. Kozy Gary M. Cohen Jeffrey S. Sherman Amounts shown are not subject to any further deduction for Social Security benefits or other offsets. Associates may elect to receive a lifetime pension or the actuarial value of their retirement benefits in a lump sum, as described below. Calculation of Benefits. Final Average Pay (1% of average final covered compensation, plus 1.5% of average final excess compensation) multiplied by years and months of credited service For purposes of the formula, “average final covered compensation” is generally the portion of an associate’s covered compensation subject to Social Security tax, and “average final excess compensation” is the portion that is not subject to such tax. Cash Balance Age plus years of as of the upcoming December 31 Less than 40 40-49 50-59 60-69 70 or more In addition, each month the associate’s account is credited with interest. The rate used during the year is determined based on the30-year U.S. Treasury rates in effect during the prior September. Early Retirement. Early retirement is available for an associate who has reached age 55 and has at least 10 years of vesting service. Messrs. Under the final average pay provisions of the Retirement Plan, an associate’s pension benefit is reduced by Form of Benefit. Participants may elect to receive their benefits in various forms. Participants may select a single life annuity, in which pension payments will be payable only during the associate’s lifetime. Associates may also elect to receive their benefits in a single lump sum payment. Under the final average pay provisions, this lump sum is actuarially equivalent to the benefit payable under the single life annuity option. Under the cash balance provisions, the lump sum is equal to the associate’s account balance. Married participants may select a joint and survivor annuity option. Under this option, the associate receives a reduced benefit during his or her lifetime, and, upon death, the associate’s spouse will receive monthly payments for the remainder of the spouse’s lifetime. The associate can choose a continuation benefit of 50%, 75% or 100% of the amount that was paid to the associate. The degree to which the pension benefit is reduced depends upon the age difference of the associate and the spouse, and on the percentage of the continuation benefit that is selected. Associates may also select a guaranteed payment option. The associate chooses a designated number of guaranteed monthly payments (either a60-month minimum guarantee or a120-month minimum guarantee). If the associate dies before receiving all of the minimum payments, the associate’s beneficiary will receive the balance of the payments. If this option is selected, the single life annuity otherwise payable is reduced to cover the cost of the guarantee. The amount of the reduction is 3% if the60-month option is chosen, and 7% if the120-month option is chosen. Cash Deferrals. The BD Deferred Compensation and Retirement Benefit Restoration Plan is a nonqualified plan that allows an eligible BD associate to defer receipt of up to 75% of salaryand/or up to 100% of a PIP award until the date or dates elected by the associate. The amounts deferred are invested in shares of BD common stock or in cash accounts that mirror the gainsand/or losses of several different investment funds, based on the investment selections of the participants. The investment risk is borne solely by the participant. Participants are entitled to change their investment elections at any time with respect to prior deferrals, future deferrals or both. The plan does not offer any above-market or preferential rates of return to the named executive officers. The investment options available to participants may be changed by BD at any time. Deferral of Equity Awards. The plan also allows associates to defer receipt of up to 100% of the shares issuable under their Withdrawals and Distributions. Matching Contributions. BD provides matching contributions on cash amounts deferred under the plan. These contributions are made in the first calendar quarter following the calendar year in which the compensation was deferred. BD matches 75% of the first 6% of salary and PIP award deferred by a participant under the plan and our 401(k) plan combined. Matching contributions are made to the extent the total cash compensation from which a participant makes contributions to Unfunded Liability. NONQUALIFIED DEFERRED COMPENSATION IN FISCAL YEAR Name Vincent A. Forlenza David V. Elkins William A. Kozy Gary M. Cohen Jeffrey S. Sherman Payments Upon Termination of Employment The table below shows the estimated payments and benefits that would be paid by BD to each named executive officer as a result of his termination of employment under various scenarios. The amounts shown assume termination of employment on September 30, Name Vincent A. Forlenza David V. Elkins William A. Kozy Gary M. Cohen Jeffrey S. Sherman The amounts shown in the above table do not include vested deferred compensation Payments Upon Termination Following a Change of Control BD has The agreement provides that BD will continue to employ the executive for two years following a change of control, and that, during this period, the executive’s position and responsibilities at BD will be materially the same as those prior to the change of control. The agreement also provides for minimum salary, PIP award and other benefits during this two-year period. “Change of control” is defined under the agreement generally as: the acquisition by any person or group of 25% or more of the outstanding BD common stock; the incumbent members of the Board ceasing to constitute at least a majority of the Board; certain business combinations; and shareholder approval of the liquidation or dissolution of BD. The agreement also provides that, in the event the executive is terminated without a pro rata PIP award for the year of termination based on the higher of (i) the executive’s average PIP award for the last three fiscal years prior to termination, and (ii) his target PIP award for the year in which the termination occurs (the greater of the two being referred to herein as the “Highest Incentive Payment”); a lump sum severance payment equal to three times (two times in the case of Messrs. Elkins and Sherman) the sum of the executive’s annual salary and his Highest Incentive Payment; a lump sum payment equal to the present value of the increased pension benefits the executive would have received had he remained employed for an additional three years (two years in the case of Messrs. Elkins and Sherman) following termination; continuation of the executive’s health and welfare benefits (reduced to the extent provided by any subsequent employer) for a period of three years (two years in the case of Messrs. Elkins and Sherman); and outplacement services, subject to a limit on the cost to BD of $100,000. “Cause” is generally defined as the willful and continued failure of the executive to substantially perform his duties, or illegal conduct or gross misconduct that is materially injurious to BD. “Good reason” is generally defined to include (i) any significant adverse change in the executive’s position or responsibilities, (ii) the failure of BD to pay any compensation called for by the agreement, or (iii) certain relocations of the executive. Under the agreement, if any payments or distributions made by BD to the executive as a result of a change of control would be subject to The following table sets forth the estimated benefits each named executive officer would receive under his agreement in the event he was terminated without “cause” or terminated his employment for “good reason” following a change of control. The table assumes a termination date of September 30, Name Vincent A. Forlenza David V. Elkins William A. Kozy Gary M. Cohen Jeffrey S. Sherman Accelerated Vesting of Equity Compensation Awards Upon a Change of Control Upon a change of control, as defined in our equity compensation plans, all unvested options and SARs become fully vested and exercisable, and all time-vested The following table sets forth the value to the named executive officers of the accelerated vesting of the unvested equity compensation awards they held at the end of fiscal year Name Vincent A. Forlenza David V. Elkins William A. Kozy Gary M. Cohen Jeffrey S. Sherman The value of unvested restricted stock units is calculated by multiplying the shares distributable by Equity Compensation Upon Termination of Employment Upon a named executive officer’s termination due to retirement: all unvested options and SARs held by the named executive officer become fully exercisable for their remaining term; all time-vested units held by the named executive officer vest at, or on the first anniversary of, retirement; and all Performance Units held by the named executive officer vest pro rata based on the amount of the vesting period that had elapsed. The payments would be made after the end of the applicable vesting periods and would be based on BD’s actual performance for the applicable performance periods, rather than award targets. the named executive officer is entitled to exercise his stock options and SARs for three months following termination, but only to the extent they were vested at the time of termination; all TVUs held by the named executive officer vest pro rata based on the amount of the vesting period that had elapsed and all other time-vested restricted stock units fully vest; and all Performance Units held by the named executive officer vest pro rata based on the amount of the vesting period that had elapsed. The payments would be made after the end of the applicable vesting periods and would be based on BD’s actual performance for the applicable performance periods, rather than award targets. Upon a named executive officer’s termination due to death or disability: all unvested options and SARs held by the named executive officer become fully exercisable for their remaining term; all time-vested units held by the named executive officer fully vest; and all Performance Units held by the named executive officer vest pro rata based on the amount of the vesting period that had elapsed. The payment would be based on award targets. Ernst & Young LLP (“E&Y”) has been selected by the Audit Committee of the Board to audit the accounts of BD and its subsidiaries for the fiscal year ending September 30, Listed below are the fees billed to BD by E&Y for services rendered during fiscal years 2012 2011 Audit Fees Audit Related Fees Tax Fees All Other Fees Total Pre-Approval of Audit and Non-Audit Services The Audit Committee is responsible for appointing BD’s independent registered public accounting firm (the “independent auditors”) and approving the terms of the independent auditors’ services. The Audit Committee has established a policy for the pre-approval of all audit and permissible non-audit services to be provided by the independent auditors, as described below. Audit Services. Non-Audit Services. The Audit Committee believes that the provision of the non-audit services described above by E&Y is consistent with maintaining the independence of E&Y. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2. IF RATIFICATION IS WITHHELD, THE AUDIT COMMITTEE WILL RECONSIDER ITS SELECTION. The Audit Committee reviews BD’s financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process, including the system of internal controls. The independent auditors are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with generally accepted auditing standards and to issue a report thereon. The Committee monitors these processes. In this context, the Committee met and held discussions with management and the independent auditors. Management represented to the Committee that the Company’s consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States, and the Committee reviewed and discussed the consolidated financial statements with management and the independent auditors. The Committee also discussed with the independent auditors the matters required to be discussed by the statement on Auditing Standards No. 61 (Codification of Statements on Auditing Standards, AU 380), as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T. In addition, the Committee discussed with the independent auditors the auditors’ independence from BD and its management, and the independent auditors provided to the Committee the written disclosures and the letter pursuant to the applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor’s communications with the Committee concerning independence. The Committee discussed with BD’s internal and independent auditors the overall scope and plans for their respective audits. The Committee met with the internal and independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of BD’s internal controls, and the overall quality of BD’s financial reporting. Management has also reviewed with the Audit Committee its report on the effectiveness of BD’s internal control over financial reporting. The Audit Committee also received the report from the independent auditors on BD’s internal control over financial reporting. Based on the reviews and discussions referred to above, the Committee recommended to the Board of Directors, and the Board has approved, that the audited financial statements be included in the Company’s Annual Report onForm 10-K for the fiscal year ended September 30, AUDIT COMMITTEE Basil L. Anderson, Chair Christopher Jones Marshall O. Larsen Gary A. Mecklenburg James F. Orr Rebecca W. Rimel Bertram L. Scott The Compensation Discussion and Analysis beginning on page “RESOLVED, that the shareholders of Becton, Dickinson and Company (“BD”) approve the compensation of the BD executive officers named in the Summary Compensation Table, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission (which disclosure includes the Compensation Discussion and Analysis, the executive compensation tables and the related footnotes and narrative accompanying the tables).” As we describe in the Compensation Discussion and Analysis, our executive compensation program embodies apay-for-performance philosophy that supports BD’s business strategy and aligns the interests of our executives with our shareholders. For these reasons, the Board is asking shareholders to support this proposal. While the advisory vote we are asking you to cast is non-binding, the Compensation and Benefits Committee and the Board value the views of our shareholders and will take into account the outcome of the vote when considering future compensation decisions for our named executive officers. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 3. The Board of Directors is unanimously recommending approval of an amendment to The Board has carefully considered the advantages and disadvantages of against the type of transactions the fair price provision was designed to defend against, and that a separate fair price provision in the Restated Certification is unnecessary. In general, the Act prohibits certain New Jersey corporations from engaging in a merger or other business combination with a holder of 10% or more of To be approved, Proposal 4 requires the affirmative vote of at least two-thirds of the votes cast at the meeting. If this Proposal is approved, it will be affected by the filing of an amended Restated Certificate with the State of New Jersey promptly after the Annual Meeting. If our shareholders THE BOARD OF DIRECTORS RECOMMENDS A VOTE Our 2004 Employee and Director Equity-Based Compensation Plan (the “2004 Plan”) allows us to grant equity-based compensation. As we describe elsewhere in this proxy statement, equity-based compensation continues to be a significant element of Proposed Amendments The Board of Directors has approved, subject to shareholder approval, two amendments to the 2004 Plan. The first is to amend the 2004 Plan to extend its term. The second is to amend the 2004 Plan to increase the number of shares available for awards. Extension of Term. The 2004 Plan was originally approved by BD’s shareholders on February 11, 2004. The 2004 Plan has a ten year term that expires on February 11, 2014, following which no further awards may be made under the 2004 Plan. The proposed amendment would extend the term of the 2004 Plan for a period of ten years following shareholder approval of the amendment, or January 29, 2023. Increase in Shares. As of November 30, 2012, 3,646,483 shares of BD common stock To the extent any outstanding award granted under the 2004 Plan is canceled or expires, the shares subject to the award will become available again for issuance. Also, shares underlying awards issued in assumption of, or substitution for, awards issued by a company acquired by BD A copy of the 2004 Plan as proposed to be amended (with deleted text indicated by strikethroughs and new text underlined) is attached to this proxy statement as Appendix B. Material Terms of the 2004 Plan The following Eligibility and Participation Any employee of BD, including any officer or employee-director, is eligible to receive awards under the 2004 Plan. Additionally, any holder of an outstanding equity-based award issued by a company acquired by BD may be granted a Substitute Award under the 2004 Plan. BD had approximately 29,600 employees as of September 30, 2012. Non-management directors of BD are also eligible to participate in Administration of the 2004 Plan The 2004 Plan is administered by the Compensation and Benefits Committee of the Board of Directors (referred to herein as the “Compensation Committee”). The Compensation Committee has the sole discretion to grant to eligible participants one or more equity awards and to determine the type, number or amount of any award to be granted. The Compensation Committee has, among other powers, the authority to interpret and construe any provision of the 2004 Plan, adopt rules and regulations for administering the 2004 Plan, perform other acts relating to the 2004 Plan, and delegate any administrative responsibilities under the 2004 Plan. Decisions of the Compensation Committee are final and binding on all parties. Awards General. Awards are granted for no cash consideration, or for minimal cash consideration if required by applicable law. Awards may provide Exercise Price. Except in the Exercise of Award; Form of Consideration. The Compensation Committee determines the times at which Stock Options and Stock Appreciation Rights. The term of stock options and SARs granted under the 2004 Plan is established by the Compensation Committee, but may not exceed ten years. The Compensation Committee may impose a vesting schedule on stock options and SARs. Unless otherwise provided by the Compensation Committee, employee stock options and SARs: are exercisable following voluntary termination of employment or involuntary termination of employment without cause for three months, to the extent such awards were exercisable at the time of termination; become fully vested upon retirement, death and disability, and otherwise remain in effect in accordance with their terms; and otherwise lapse upon termination of employment. Stock options granted under the 2004 Plan may be “incentive stock options” (“ISOs”), which afford certain favorable tax treatment for the holder, or “nonqualified stock options” (“NQSOs”). See “Tax Matters” below. Restricted Stock and Restricted Stock Units. The Compensation Committee may impose restrictions on restricted stock and restricted stock units, in its discretion. Upon death, disability or retirement, all restrictions on restricted stock and restricted stock units will no longer apply, and upon an involuntary termination without cause, participants vest in a pro rata portion of their award. In all other cases of termination of employment during the restriction period, restricted stock and restricted stock units will be forfeited. Performance Units. Performance units vest upon the attainment of performance goals established by the Compensation Committee. The Compensation Committee establishes the performance criteria, the length of the performance period and the form and time of payment of the award. Upon retirement, certain disabilities or involuntary termination without cause during the performance period, a holder of performance units will receive a pro rata portion of the amount otherwise payable under the award. In the event of voluntary termination or termination for cause, performance units will be forfeited. In other cases of termination of employment during the performance period, the rights of the holder will be as Other Stock-Based Awards. The Compensation Committee may grant and establish the terms and conditions of other stock-based awards, such as Performance-Based Compensation Awards. Awards (other than stock options and SARs) to certain senior executives will, if the Compensation Committee intends any such award to qualify as “performance-based compensation” under Section 162(m) of the Internal Revenue Code, become earned and payable only if pre-established targets relating to one or more of the following performance measures are achieved during a performance period or periods, as determined by the Compensation Committee: (i) Return on Net Assets, (ii) Revenue Growth, (iii) Return on Common Equity, (iv) Total Shareholder Return, (v) Earnings Per Share, (vi) Net Revenue Per Employee, (vii) Market Share, (viii) Return on Invested Capital or (ix) Net Income (each as defined in the 2004 Plan). Such targets may relate to BD as a whole, or to one or more units of BD, and may be measured over such periods, as the Compensation Committee determines. The maximum number of shares Certain Adjustments. If a recapitalization, stock split or Transferability. Awards granted under the 2004 Plan are not transferable other than by will or the laws of descent and distribution, except as otherwise provided by the may an award be transferred by a participant for value. Except to the extent a transfer is permitted, an award is exercisable during a participant’s lifetime only by the participant or by the participant’s guardian or legal representative. Deferral Eligible recipients of Change in Control Unless otherwise specified by the Compensation Committee, upon a New Plan Benefits The issuance of any awards under the 2004 Plan will be at the discretion of the Compensation Committee. Therefore, it is not possible to determine the amount or form of any award that will be granted to any individual in the future. The table below sets forth the awards that were provided under the 2004 Plan during the 2012 fiscal year. More information on the awards made during the 2012 fiscal year to the named executive officers appears in the “Grants of Plan-Based Awards in Fiscal Year 2012” table on page 41. Becton, Dickinson and Company 2004 Employee and Director Equity-Based Compensation Plan Name and Position Vincent A. Forlenza Chairman, Chief Executive Officer and President David V. Elkins Former Executive Vice President and Chief Financial Officer William A. Kozy Executive Vice President and Chief Operating Officer Gary M. Cohen Executive Vice President Jeffrey S. Sherman Senior Vice President and General Counsel All current executive officers as a group All current non-employee directors as a group BD employees other than executive officers, as a group Tax Matters The following is a Non-Qualified Stock Options and Stock Appreciation Rights. An optionee or SAR recipient will not recognize any taxable income upon the grant of an NQSO or SAR and BD will not be entitled to a tax deduction with respect to the grant of an NQSO or SAR. Upon exercise of an NQSO or SAR, the excess of the fair market value of the underlying shares of BD common stock on the exercise date over the exercise price will be taxable as compensation income to the grantee and will be subject to applicable withholding taxes. BD will generally be entitled to a tax deduction at such time in the amount of such compensation income. The grantee’s tax basis for the Incentive Stock Options. An optionee will not recognize any taxable income at the Restricted Stock. A grantee will not recognize any income upon the receipt of Restricted Stock Units and Performance Units. The grant of an Award of restricted stock units or performance units will not result in income for the grantee or in a tax deduction for BD. Upon the settlement of such an Award, the grantee will recognize ordinary income equal to the aggregate value of the payment received, and BD generally will be entitled to a tax deduction in the Equity Compensation Plan Information The Plan Category Equity compensation plans approved by security holders Equity compensation plans not approved by security holders Total Deferred Compensation and Retirement Benefit Restoration Plan. Information regarding the Global Share Investment Program. BD maintains a Global Share Investment Program (“GSIP”) for its non-U.S. associates in certain jurisdictions outside of A participant may withdraw the vested portion of the participant’s account, although such withdrawals must be in the form of a cash payment if the participant is employed by BD at the time of withdrawal. Following termination of service, withdrawals will be paid in either cash or shares, at the election of the participant. Non-Employee Directors 2000 Stock Option Plan. Non-management directors formerly received grants of nonqualified stock options under the Non-Employee Directors 2000 Stock Option Plan (the “Directors Stock Option Plan”), which provided for the granting of nonqualified stock options at each Annual Meeting of Shareholders to the non-management directors elected at or continuing to serve after such meeting. Options are no longer granted under the Directors Stock Option Plan. The exercise price of stock options granted under the Directors Stock Option Plan was the fair market value of the BD common stock on the date of grant. Each option granted under the Directors Stock Option Plan has a term of 10 years from its date of grant. The options granted under the Directors Stock Option Plan have vesting periods of three to four years, depending on the year of grant. 1996 Directors’ Deferral Plan. The 1996 Directors’ Deferral Plan (the “Directors’ Deferral Plan”) allows non-management directors to defer receipt, in an unfunded cash account or a BD common stock account, of all or part of their annual retainer and other cash fees. In the event a director elects to have fees deferred in a BD common stock account, the director’s account is credited with a number of shares based on the market price of the BD common stock on the due date of such payment. The cash fees deferred by the director are used to purchase the shares of BD common stock on the open market, which are then held in a trust. Directors may also defer receipt of the shares underlying their restricted stock unit awards. The number of shares credited to the BD common stock accounts of participants is adjusted periodically to reflect the payment and reinvestment of dividends on the BD common stock. Participants may elect to have amounts held in a cash account converted into a BD common stock account. The Directors’ Deferral Plan is not qualified, and participants have an unsecured contractual commitment of BD to pay the amounts due under the Directors’ Deferral Plan. When such payments are due, the cash and/or common stock will be distributed from BD’s general assets. THE BOARD OF DIRECTORS RECOMMENDS A VOTE Any proposal that a shareholder wishes to submit for inclusion in BD’s proxy materials for the Appendix A Text of Article VI of BD’s Restated Certificate of Incorporation (B) The provisions of Section (A) of this Article VI shall not be applicable to any particular Business Combination, and such Business Combination shall require only such affirmative vote, if any, as is required by law or by any other provision of this Restated Certificate of Incorporation or the By-Laws of the Corporation, or any agreement with any national securities exchange, if all of the conditions specified in either of the following paragraphs (1) or (2) are met: (1) The Business Combination shall have been approved by two-thirds of the Continuing Directors (as hereinafter defined), whether such approval is made prior to or subsequent to the acquisition of beneficial ownership of the Voting Stock that caused the Interested Shareholder (as hereinafter defined) to become an Interested Shareholder. (2) All of the following conditions shall have been met: (a) The aggregate amount of cash and the Fair Market Value (as hereinafter defined) as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by holders of Common Stock in such Business Combination shall be at least equal to the highest amount determined under clauses (i), (ii), (iii) and (iv) below: (i) (if applicable) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers’ fees) paid by or on behalf of the Interested Shareholder for any share of Common Stock in connection with the acquisition by the Interested Shareholder of beneficial ownership of shares of Common Stock within the two-year period immediately prior to the first public announcement of the proposed Business Combination, (the “Announcement Date”); (ii) the Fair Market Value per share of Common Stock on the Announcement Date or on the date on which the Interested Shareholder became an Interested Shareholder (the “Determination Date”), whichever is higher; (iii) (if applicable) the price per share equal to the Fair Market Value per share of Common Stock determined pursuant to the immediately preceding clause (ii), multiplied by the ratio of (x) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers’ fees) paid by or on behalf of the Interested Shareholder for any share of Common Stock in connection with the acquisition by the Interested Shareholder of beneficial ownership of shares of Common Stock within the two-year period immediately prior to the Announcement Date to (y) the Fair Market Value per share of Common Stock on the first day in such two-year period on which the Interested Shareholder acquired beneficial ownership of any share of Common Stock; and (iv) the Corporation’s earnings per share of Common Stock for the four full consecutive fiscal quarters immediately preceding the Announcement Date, multiplied by the higher of the then price/earnings multiple (if any) of such Interested Shareholder or the highest price/earnings multiple of the Corporation within the two-year period immediately preceding the Announcement Date (such price/earnings multiples being determined as customarily computed and reported in the financial community); Appendix A (b) The aggregate amount of cash and the Fair Market Value as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by holders of shares of any class or series of outstanding Capital Stock (as hereinafter defined), other than Common Stock, shall be at least equal to the highest amount determined under clauses (i), (ii), (iii) and (iv) below: (i) (if applicable) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers’ fees) paid by or on behalf of the Interested Shareholder for any share of such class or series of Capital Stock in connection with the acquisition by the Interested Shareholder of beneficial ownership of shares of such class or series of Capital Stock within the two-year period immediately prior to the Announcement Date; (ii) the Fair Market Value per share of such class or series of Capital Stock on the Announcement Date or on the Determination Date, whichever is higher; (iii) (if applicable) the price per share equal to the Fair Market Value per share of such class or series of Capital Stock determined pursuant to the immediately preceding clause (ii), multiplied by the ratio of (x) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers’ fees) paid by or on behalf of the Interested Shareholder for any share of such class or series of Capital Stock in connection with the acquisition by the Interested Shareholder of beneficial ownership of shares of such class or series of Capital Stock within the two-year period immediately prior to the Announcement Date to (y) the Fair Market Value per share of such class or series of Capital Stock on the first day in such two-year period on which the Interested Shareholder acquired beneficial ownership of any share of such class or series of Capital Stock; and (iv) (if applicable) the highest preferential amount per share to which the holders of shares of such class or series of Capital Stock would be entitled in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, regardless of whether the Business Combination to be consummated constitutes such an event. The provisions of this sub-paragraph (b) shall be required to be met with respect to every class or series of outstanding Capital Stock, other than Common Stock, whether or not the Interested Shareholder has previously acquired beneficial ownership of any shares of a particular class or series of Capital Stock. (c) The consideration to be received by holders of a particular class or series of outstanding Capital Stock shall be in cash or in the same form as previously has been paid by or on behalf of the Interested Shareholder in connection with its direct or indirect acquisition of beneficial ownership of shares of such class or series of Capital Stock. If the consideration so paid for shares of any class or series of Capital Stock varied as to form, the form of consideration for such class or series of Capital Stock shall be either cash or the form used to acquire beneficial ownership of the largest number of shares of such class or series of Capital Stock previously acquired by the Interested Shareholder. (d) After such Interested Shareholder has become an Interested Shareholder and prior to the consummation of such Business Combination: (i) except as approved by two-thirds of the Continuing Directors, there shall have been no failure to declare and pay at the regular date therefor any dividends (whether or not cumulative) payable in accordance with the terms of any outstanding Capital Stock; (ii) there shall have been no reduction in the annual rate of dividends paid on the Common Stock (except as necessary to reflect any stock split, stock dividend or subdivision of the Common Stock), except as approved by two-thirds of the Continuing Directors; (iii) there shall have been an increase in the annual rate of dividends paid on the Common Stock as necessary to reflect any reclassification (including any reverse stock split), recapitalization, reorganization or any similar transaction that has the effect of reducing the number of outstanding shares of Common Stock, unless the failure so to increase such annual rate is approved by two-thirds of the Continuing Directors; and (iv) such Interested Shareholder shall not have become the beneficial owner of any additional shares of Capital Stock except as part of the transaction Appendix A that results in such Interested Shareholder becoming an Interested Shareholder and except in a transaction that, after giving effect thereto, would not result in any increase in the Interested Shareholder’s percentage beneficial ownership of any class or series of Capital Stock. (e) After such Interested Shareholder has become an Interested Shareholder, such Interested Shareholder shall not have received the benefit, directly or indirectly (except proportionately as a shareholder of the Corporation), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the Corporation, whether in anticipation of or in connection with such Business Combination or otherwise. (f) A proxy or information statement describing the proposed Business Combination and complying with the requirements of the Securities Exchange Act of 1934 and the rules and regulations thereunder (the “Act”) (or any subsequent provisions replacing such Act, rules or regulations) shall be mailed to all shareholders of the Corporation at least 30 days prior to the consummation of such Business Combination (whether or not such proxy or information statement is required to be mailed pursuant to such Act or subsequent provisions). The proxy or information statement shall contain on the first page thereof, in a prominent place, any statement as to the advisability (or inadvisability) of the Business Combination that the Continuing Directors, or any of them, may choose to make and, if deemed advisable by a majority of the Continuing Directors, the opinion of an investment banking firm selected by a majority of the Continuing Directors as to the fairness (or not) of the terms of the Business Combination from a financial point of view to the holders of the outstanding shares of Capital Stock other than any Interested Shareholder and any Affiliate or Associate (as hereinafter defined), of any Interested Shareholder, such investment banking firm to be paid a reasonable fee for its services by the Corporation. (g) Such Interested Shareholder shall not have made any major change in the Corporation’s business or equity capital structure without the approval of a majority of the Continuing Directors. (C) For the purposes of this Article VI: (1) The term “Business Combination” shall mean: (a) any merger or consolidation of the Corporation or any Subsidiary (as hereinafter defined) with (i) any Interested Shareholder or (ii) any other corporation (whether or not itself an Interested Shareholder) which is, or after such merger or consolidation would be, an Affiliate or Associate of an Interested Shareholder; or (b) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) with any Interested Shareholder or any Affiliate or Associate of any Interested Shareholder involving any assets or securities of the Corporation, any Subsidiary or any Interested Shareholder or any Affiliate or Associate of any Interested Shareholder having an aggregate Fair Market Value of $100,000,000 or more; or (c) the adoption of any, plan or proposal for the liquidation or dissolution of the Corporation proposed by or on behalf of on Interested Shareholder or any Affiliate or Associate of any Interested Shareholder; or (d) any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries or any other transaction (whether or not with or otherwise involving an Interested Shareholder) that has the effect, directly or indirectly, of increasing the proportionate share of any class or series of Capital Stock, or any securities convertible into Capital Stock or into equity securities of any Subsidiary, that is beneficially owned by any Interested Shareholder or any Affiliate or Associate of any Interested Shareholder; or Appendix A (e) any agreement, contract or other arrangement providing for any one or more of the actions specified in the foregoing sub-paragraphs (a) to (d). (2) The term “Capital Stock” shall mean all capital stock of the Corporation authorized to be issued from time to time under Article IV of this Restated Certificate of Incorporation, and the term “Voting Stock” shall mean all Capital Stock which by its terms may be voted on all matters submitted to shareholders of the Corporation generally. (3) The term “person” shall mean any individual, firm, corporation or other entity and shall include any group comprised of any person and any other person with whom such person or any Affiliate or Associate of such person has any agreement, arrangement or understanding, directly or indirectly, for the purpose of acquiring, holding, voting or disposing of Capital Stock. (4) The term “Interested Shareholder” shall mean any person (other than the Corporation or any Subsidiary and other than any pension, retirement, profit-sharing, employee stock ownership or other employee benefit plan of the Corporation or any Subsidiary or any trustee of or fiduciary with respect to any such plan when acting in such capacity) who (a) is the beneficial owner of Voting Stock representing ten percent (10%) or more of the votes entitled to be cast by the holders of all then outstanding shares of Voting Stock; or (b) is an Affiliate or Associate of the Corporation and at any time within the two-year period immediately prior to the date in question was the beneficial owner of Voting Stock representing ten percent (10%) or more of the votes entitled to be cast by the holders of all then outstanding shares of Voting Stock. (5) A person shall be a “beneficial owner” of any Capital Stock (a) which such person or any of its Affiliates or Associates beneficially owns, directly or indirectly; (b) which such person or any of its Affiliates or Associates has, directly or indirectly, (i) the right to acquire (whether such right is exercisable immediately or subject only to the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (ii) the right to vote pursuant to any agreement, arrangement or understanding; or (c) which are beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of Capital Stock. For the purposes of determining whether a person is an Interested Shareholder pursuant to paragraph (4) of this Section (C), the number of shares of Capital Stock deemed to be outstanding shall include shares deemed beneficially owned by such person through application of this paragraph (5), but shall not include other shares of Capital Stock that may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise. (6) The terms “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 under the Act as in effect on November 27, 1984 (the term “registrant” in said Rule 12b-2 meaning in this case the Corporation). (7) The term “Subsidiary” shall mean any corporation of which a majority of any class of equity security is beneficially owned by the Corporation;provided,however, that for the purposes of the definition of Interested Shareholder set forth in paragraph (4) of this Section (C), the term “Subsidiary” shall mean only a corporation of which a majority of each class of equity security is beneficially owned by the Corporation. (8) The term “Continuing Director” shall mean any member of the Board of Directors of the Corporation (the “Board”) who is not an Affiliate or Associate or representative of an Interested Shareholder in question in Connection with a particular Business Combination and either: (a) was a member of the Board prior to the time that such Interested Shareholder became an Interested Shareholder; or (b) is or was recommended or elected to fill a vacancy on the Board, however caused, by a majority of the Continuing Directors. Appendix A (9) The term “Fair Market Value” shall mean (a) in the case of cash, the amount of such cash; (b) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the Composite Tape for New York Stock Exchange-Listed stocks, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Act on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotations System or any similar system then in use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined by a majority of the Continuing Directors in good faith; and (c) in the case of property other than cash or stock, the fair market value of such property on the date in question as determined in good faith by a majority of the Continuing Directors. (10) In the event of any Business Combination in which the Corporation survives, the phrase “consideration other than cash to be received” as used in sub-paragraphs (a) and (b) of paragraph (2) of section (B) of this Article VI shall include the shares of Common Stock and/or the shares of any other class or series of Capital Stock retained by the holders of such shares. (D) The Board of Directors shall have the power and duty to determine for the purposes of this Article VI, on the basis of information known to them after reasonable inquiry, (a) whether a person is an Interested Shareholder, (b) the number of shares of Capital Stock or other securities beneficially owned by any person, (c) whether a person is an Affiliate or Associate of another, and (d) whether the assets that are the subject of any Business Combination have, or the consideration to be received for the issuance or transfer of securities by the Corporation or any Subsidiary in any Business Combination has, an aggregate Fair Market Value of $100,000,000 or more. Any such determination made in good faith shall be binding and conclusive on all parties. (E) Nothing contained in this Article VI shall be construed to relieve any Interested Shareholder from any fiduciary obligation imposed by law. (F) The fact that any Business Combination complies with the provisions of Section (B) of this Article VI shall not be construed to impose any fiduciary duty, obligation or responsibility on the Board, or any member thereof, to approve such Business Combination or recommend its adoption or approval to the shareholders of the Corporation, nor shall such compliance limit, prohibit or otherwise restrict in any manner the Board, or any member thereof, with respect to evaluations of or actions and responses taken with respect to such Business Combination. (G) Notwithstanding any other provisions of this Restated Certificate of Incorporation or the By-Laws of the Corporation (and notwithstanding the fact that a lesser percentage or separate class vote may be specified by law, this Restated Certificate of Incorporation or the By-Laws of the Corporation), the affirmative vote of the holders of not less than eighty percent (80%) of the votes entitled to be cast by the holders of all then outstanding shares of Voting Stock, voting together as a single class, shall be required to amend or repeal, or adopt any provisions inconsistent with, this Article VI;provided,however, that this Section (G) shall not apply to, and such eighty percent (80%) vote shall not be required for, any amendment, repeal or adoption unanimously recommended by the Board if all of such directors are persons who would be eligible to serve as Continuing Directors within the meaning of paragraph (8) of Section (C) of this Article VI. Appendix B BECTON, DICKINSON AND COMPANY 2004 EMPLOYEE AND DIRECTOR EQUITY-BASED COMPENSATION PLAN As amended and restated as of January 29, 2013 Section 1.Purpose. The purpose of the Becton, Dickinson and Company 2004 Employee and Director Equity-Based Compensation Plan is to provide an incentive to employees of the Company and its subsidiaries to achieve long-range goals, to aid in attracting and retaining employees and directors of outstanding ability and to closely align their interests with those of shareholders. Section 2.Definition. As used in the Plan, the following terms shall have the meanings set forth below: (a)“Affiliate”shall mean (i) any entity that, directly or indirectly, is controlled by the Company and (ii) any entity in which the Company has a significant equity interest, in either case as determined by the Committee. (b)“Award” shall mean any Option, Stock Appreciation Right, award of Restricted Stock, Restricted Stock Unit, Performance Unit or Other Stock-Based Award granted under the Plan. (c)“Award Agreement” shall mean any written agreement, contract or other instrument or document evidencing any Award granted under the Plan, which may, but need not, be executed or acknowledged by a Participant. (d)“Board” shall mean the board of directors of the Company. (e)“Cause” shall mean (i) the willful and continued failure of a Participant to perform substantially the Participant’s duties with the Company or any Affiliate (other than any such failure resulting from incapacity due to physical or mental illness), or (ii) the willful engaging by the Participant in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company. No act, or failure to act, on the part of the Participant shall be considered “willful” unless it is done, or omitted to be done, by the Participant in bad faith or without the reasonable belief that the Participant’s action or omission was in the best interest of the Company. (f)“Change in Control” means (i) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the“Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of either (A) the then-outstanding shares of common stock of the Company (the“Outstanding Company Common Stock”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the“Outstanding Company Voting Securities”);provided, however, that, for purposes of this Section 2(f), the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company; (ii) any acquisition by the Company, or (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any affiliated company, (iv) any acquisition by any corporation pursuant to a transaction that complies with Section 2(f)(iii)(A), Section 2(f)(iii)(B) and Section 2(f)(iii)(C), or (v) any acquisition that the Board determines, in good faith, was inadvertent, if the acquiring Person divests as promptly as practicable a sufficient amount of the Outstanding Company Common Stock and/or the Outstanding Company Voting Securities, as applicable, to reverse such acquisition of 25% or more thereof; Appendix B (ii) individuals who, as of the day after the effective time of this Plan, constitute the Board (the“Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to such time whose election, or nomination for election as a director by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consent by or on behalf of a Person other than the Board; (iii) consummation of a reorganization, merger, consolidation or sale or other disposition of all or subsequently all of the assets of the Company (a“Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 25% or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or (iv) approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. (g)“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time. (h)“Committee” shall mean the Compensation and Benefits Committee of the Board or such other committee as may be designated by the Board. (i)“Company” shall mean Becton, Dickinson and Company. (j)“Disability” shall mean a Participant’s disability as determined in accordance with a disability insurance program maintained by the Company. (j)“409A Disability” shall mean a Disability that qualifies as a total disability as defined below and determined in a manner consistent with Code Section 409A and the regulations thereunder: The Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. A Participant will be deemed to have suffered a 409A Disability if determined to be totally disabled by the Social Security Administration. In addition, the Participant will be deemed to have suffered a 409A Disability if Appendix B determined to be disabled in accordance with a disability insurance program maintained by the Company, provided that the definition of disability applied under such disability insurance program complies with the requirements of Code Section 409A and the regulations thereunder. (k)“Earnings Per Share”shall mean earnings per share calculated in accordance with U.S. Generally Accepted Accounting Principles. (l)“Executive Group” shall mean every person who is expected by the Committee to be both (i) a “covered employee” as defined in Section 162(m) of the Code as of the end of the taxable year in which payment of the Award may be deducted by the Company, and (ii) the recipient of compensation of more than $1,000,000 for that taxable year. (m)“Fair Market Value” shall mean, with respect to any property (including, without limitation, any Shares or other securities) the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee. (n)“Incentive Stock Option” shall mean an option representing the right to purchase Shares from the Company, granted under and in accordance with the terms of Section 6, that meets the requirements of Section 422 of the Code, or any successor provision thereto. (o)“Market Share” shall mean the percent of sales of the total available market in an industry, product line or product attained by the Company or one of its business units during a time period. (p)“Net Income” shall mean net income calculated in accordance with U.S. Generally Accepted Accounting Principles. (q)“Net Revenue Per Employee” in a period shall mean net revenue divided by the average number of employees of the Company, with average defined as the sum of the number of employees at the beginning and ending of the period divided by two. (r)“Non-Qualified Stock Option” shall mean an option representing the right to purchase Shares from the Company, granted under and in accordance with the terms of Section 6, that is not an Incentive Stock Option. (s)“Option” shall mean an Incentive Stock Option or a Non-Qualified Stock Option. (t)“Other Stock-Based Award” shall mean any right granted under Section 9. (u)“Participant” shall mean an individual granted an Award under the Plan. (v)“Performance Unit” shall mean any right granted under Section 8. (w)“Restricted Stock” shall mean any Share granted under Section 7. (x)“Restricted Stock Unit” shall mean a contractual right granted under Section 7 that is denominated in Shares. Each Unit represents a right to receive the value of one Share (or a percentage of such value, which percentage may be higher than 100%) upon the terms and conditions set forth in the Plan and the applicable Award Agreement. Awards of Restricted Stock Units may include, without limitation, the right to receive dividend equivalents. (y)“Retirement” shall mean a Separation from Service after attainment of retirement as specified in the applicable terms of an Award. Appendix B (z)“Return On Common Equity” for a period shall mean net income less preferred stock dividends divided by total shareholders’ equity, less amounts, if any, attributable to preferred stock. (aa)“Return on Invested Capital” for a period shall mean earnings before interest, taxes, depreciation and amortization divided by the difference of total assets less non-interest bearing current liabilities. (bb)“Return On Net Assets” for a period shall mean net income less preferred stock dividends divided by the difference of average total assets less average non-debt liabilities, with average defined as the sum of assets or liabilities at the beginning and ending of the period divided by two. (cc)“Revenue Growth” shall mean the percentage change in revenue (as defined in Statement of Financial Accounting Concepts No. 6, published by the Financial Accounting Standards Board) from one period to another. (dd)“Plan” shall mean this Becton, Dickinson and Company 2004 Employee and Director Equity-Based Compensation Plan. (ee)“Separation from Service” shall mean a termination of employment or other separation from service from the Company, as described in Code Section 409A and the regulations thereunder, including, but not limited to a termination by reason of Retirement or involuntary termination without Cause, but excluding any such termination where there is a simultaneous re-employment by the Company. (ff)“Shares” shall mean shares of the common stock of the Company, $1.00 par value. (gg)“Specified Employee” shall mean a Participant who is deemed to be a specified employee in accordance with procedures adopted by the Company that reflect the requirements of Code Section 409A(2)(B)(i) and the guidance thereunder. (hh)“Stock Appreciation Right” shall mean a right to receive a payment, in cash and/or Shares, as determined by the Committee, equal in value to the excess of the Fair Market Value of a Share at the time the Stock Appreciation Right is exercised over the exercise price of the Stock Appreciation Right. (ii)“Substitute Awards” shall mean Awards granted in assumption of, or in substitution for, outstanding awards previously granted by a company acquired by the Company or with which the Company combines. (jj)“Total Shareholder Return” shall mean the sum of the appreciation in the Company’s stock price and dividends paid on the common stock of the Company over a given period of time. Section 3.Eligibility. (a) Any individual who is employed by (including any officer), or who serves as a member of the board of directors of, the Company or any Affiliate shall be eligible to be selected to receive an Award under the Plan. (b) An individual who has agreed to accept employment by the Company or an Affiliate shall be deemed to be eligible for Awards hereunder as of the date of such agreement. (c) Holders of options and other types of Awards granted by a company acquired by the Company or with which the Company combines are eligible for grant of Substitute Awards hereunder. Appendix B Section 4.Administration. (a) The Plan shall be administered by the Committee. The Committee shall be appointed by the Board and shall consist of not less than three directors, each of whom shall be independent, within the meaning of and to the extent required by applicable rulings and interpretations of the New York Stock Exchange and the Securities and Exchange Commission, and each of whom shall be a“Non-Employee Director”, as defined from time to time for purposes of Section 16 of the Securities Exchange Act of 1934 and the rules promulgated thereunder. The Board may designate one or more directors as alternate members of the Committee who may replace any absent or disqualified member at any meeting of the Committee. The Committee may issue rules and regulations for administration of the Plan. It shall meet at such times and places as it may determine. A majority of the members of the Committee shall constitute a quorum. (b) Subject to the terms of the Plan and applicable law, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards (including Substitute Awards) to be granted to each Participant under the Plan; (iii) determine the number of Shares to be covered by (or with respect to which payments, rights, or other matters are to be calculated in connection with) Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Shares, other securities, other Awards, or other property, or canceled, forfeited or suspended, and the method or methods by which Awards may be settled, exercised, canceled, forfeited or suspended; (vi) determine whether, to what extent, and under what circumstances cash, Shares, other securities, other Awards, other property, and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder thereof or of the Committee; (vii) interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan; (viii) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; (ix) determine whether and to what extent Awards should comply or continue to comply with any requirement of statute or regulation; and (x) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. Notwithstanding the foregoing, the Plan will be interpreted and administered by the Committee in a manner that is consistent with the requirements of Code Section 409A to allow for tax deferral thereunder, and the Committee shall take no action hereunder that would result in a violation of Code Section 409A. (c) All decisions of the Committee shall be final, conclusive and binding upon all parties, including the Company, the stockholders and the Participants. Section 5.Shares Available For Awards. (a) The number of Shares available for issuance under the Plan is (b) If, after the effective date of the Plan, any Shares covered by an Award other than a Substitute Award, or to which such an Award relates, are forfeited, or if such an Award otherwise terminates without the delivery of Shares or of other consideration, then the Shares covered by such Award, or to which such Award relates, to the extent of any such forfeiture or termination, shall again be, or shall become, available for issuance under the Plan, except as otherwise provided in Section 5(f). (c) In the event that any Option or other Award granted hereunder (other than a Substitute Award) is exercised through the delivery of Shares, or in the event that withholding tax liabilities arising from such Option Appendix B or Award are satisfied by the withholding of Shares by the Company, the number of Shares available for Awards under the Plan shall be increased by the number of Shares so surrendered or withheld. Notwithstanding the foregoing, this Section 5(c) will not apply to any such surrender or withholding of Shares occurring on or after November 21, 2006. (d) Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or of treasury Shares. (e) In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event affects the Shares such that an adjustment is required in order to preserve the value of issued and outstanding Awards and to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Shares (or other securities or property) which thereafter may be made the subject of Awards, including the aggregate and individual limits specified in Section 5(a), (ii) the number and type of Shares (or other securities or property) subject to outstanding Awards, and (iii) the grant, purchase, or exercise price with respect to any Award or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award;provided, however, that the number of Shares subject to any Award denominated in Shares shall always be a whole number. (f) Shares underlying Substitute Awards shall not reduce the number of Shares remaining available for issuance under the Plan. (g) Upon the exercise of any Stock Appreciation Rights, the greater of (i) the number of shares subject to the Stock Appreciation Rights so exercised, and (ii) the number of Shares, if any, that are issued in connection with such exercise, shall be deducted from the number of Shares available for issuance under the Plan. Section 6.Options and Stock Appreciation Rights. The Committee is hereby authorized to grant Options and Stock Appreciation Rights to Participants with the following terms and conditions and with such additional terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Committee shall determine: (a) The exercise price per Share under an Option or Stock Appreciation Right shall be determined by the Committee;provided, however, that, except in the case of Substitute Awards, such exercise price shall not be less than the Fair Market Value of a Share on the date of grant of such Option or Stock Appreciation Right. The exercise price of a Substitute Award may be less than the Fair Market Value of a Share on the date of grant to the extent necessary for the value of Substitute Award to be substantially equivalent to the value of the award with respect to which the Substitute Award is issued, as determined by the Committee. (b) The term of each Option and Stock Appreciation Right shall be fixed by the Committee but shall not exceed 10 years from the date of grant thereof. (c) The Committee shall determine the time or times at which an Option or Stock Appreciation Right may be exercised in whole or in part, and, with respect to Options, the method or methods by which, and the form or forms, including, without limitation, cash, Shares, other Awards, or other property, or any combination thereof, having a Fair Market Value on the exercise date equal to the relevant exercise price, in which, payment of the exercise price with respect thereto may be made or deemed to have been made. Appendix B (d) The terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code, or any successor provision thereto, and any regulations promulgated thereunder. (e) Section 10 sets forth certain additional provisions that shall apply to Options and Stock Appreciation Rights. Section 7.Restricted Stock And Restricted Stock Units. (a) The Committee is hereby authorized to grant Awards of Restricted Stock and Restricted Stock Units to Participants. (b) Shares of Restricted Stock and Restricted Stock Units shall be subject to such restrictions as the Committee may impose (including, without limitation, any limitation on the right to vote a Share of Restricted Stock or the right to receive any dividend or other right or property), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise, as the Committee may deem appropriate; provided, that if the vesting conditions applicable to an Award of Restricted Stock or Restricted Stock Units to an employee of the Company relate exclusively to the passage of time and continued employment, such time period shall consist of not less than thirty-six (36) months. In the event the vesting of any Award of Restricted Stock is subject to the achievement of performance goals, the performance period relating to such Award shall be at least twelve (12) months. Any Award of Restricted Stock Units for which vesting is conditioned upon the achievement of performance goals shall be considered an award of Performance Units under Section 8. (c) Any share of Restricted Stock granted under the Plan may be evidenced in such manner as the Committee may deem appropriate including, without limitation, book-entry registration or issuance of a stock certificate or certificates. In the event any stock certificate is issued in respect of shares of Restricted Stock granted under the Plan, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock. (d) Upon a Participant’s (i) Separation from Service on account of Retirement, death or Disability, any and all remaining restrictions with respect to an award of Restricted Stock granted to the Participant shall lapse, and the Participant shall receive all of the Shares of Restricted Stock subject to the award, (ii) involuntary termination without Cause, any and all remaining restrictions with respect to an award of Restricted Stock shall lapse, and the Participant shall receive a pro-rata portion of the Shares of Restricted Stock subject to the Award based on the portion of the vesting period that the Participant was employed, and (iii) voluntary termination or involuntary termination with Cause, all Shares of Restricted Stock held by the Participant shall be forfeited as of the date of termination. (e) Notwithstanding anything contained herein to the contrary, upon a Participant’s: (i) Separation from Service on account of Retirement or Disability, any and all remaining restrictions with respect to Restricted Stock Units granted to the Participant shall lapse and the Participant shall receive any amounts otherwise payable with respect to such Restricted Stock Units as soon as administratively practicable thereafter (or at such later distribution date as may be set by the Committee at the time of the Award or in any amendment thereto), except that, for amounts subject to Code Section 409A, in the case of a Participant who is a Specified Employee, the payment of such amounts that are made on account of the Specified Employee’s Separation from Service shall not be made prior to the earlier of (A) the first day of the seventh month following the Participant’s Separation from Service (without regard to whether the Participant is reemployed on that date) or (B) death; (ii) Separation from Service on account of involuntary termination without Cause, any and all remaining restrictions with respect to Restricted Stock Units granted to the Participant shall lapse and the Participant shall Appendix B receive a pro-rata portion of any amounts otherwise payable with respect to such Restricted Stock Units as soon as administratively practicable thereafter based on the portion of the vesting period that the Participant was employed; provided, that the Committee may, in its discretion, authorize the payment to the Participant of all amounts payable with respect to such Restricted Stock Units in the case of financial hardship on the part of the Participant or in connection with a reduction-in-force. Notwithstanding the foregoing, for amounts subject to Code Section 409A, in the case of a Participant who is a Specified Employee, the payment of such amounts that are made on account of the Specified Employee’s Separation from Service shall not be made prior to the earlier of (A) the first day of the seventh month following the Participant’s Separation from Service (without regard to whether the Participant is reemployed on that date) or (B) death; (iii) death, any and all remaining restrictions with respect to Restricted Stock Units granted to the Participant shall lapse and the Participant’s beneficiary shall receive any amounts otherwise payable with respect to such Restricted Stock Units as soon as administratively practicable thereafter; and (iv) voluntary termination or involuntary termination with Cause, all Restricted Stock Units held by the Participant shall be forfeited as of the date of termination. Section 8.Performance Units. (a) The Committee is hereby authorized to grant Performance Units to Participants. (b) Subject to the terms of the Plan, a Performance Unit granted under the Plan (i) may be denominated or payable in cash, Shares (including, without limitation, Restricted Stock), other securities, other Awards, or other property and (ii) shall confer on the holder thereof rights valued as determined by the Committee and payable to, or exercisable by, the holder of the Performance Unit, in whole or in part, upon the achievement of such performance goals during such performance periods as the Committee shall establish. Subject to the terms of the Plan, the performance goals to be achieved during any performance period, the length of any performance period, the amount of any Performance Unit granted and the amount of any payment or transfer to be made pursuant to any Performance Unit shall be determined by the Committee; provided, that the performance period relating to any Award of Performance Units shall be at least twelve (12) months. (c) Notwithstanding anything contained herein to the contrary, upon a Participant’s: (i) Separation from Service on account of Retirement or involuntary termination without Cause prior to the expiration of any performance period applicable to a Performance Unit granted to the Participant, the Participant shall be entitled to receive, following the expiration of such performance period, a pro-rata portion of any amounts otherwise payable with respect to, or a pro-rata right to exercise, the Performance Unit; (ii) death or 409A Disability prior to the expiration of any performance period applicable to a Performance Unit granted to the Participant, the Participant or the Participant’s beneficiary shall receive upon such event a partial payment with respect to, or a partial right to exercise, such Performance Unit as determined by the Committee in its discretion; (iii) Separation from Service on account of Disability (other than a 409A Disability) prior to the expiration for any performance period applicable to a Performance Unit granted to the Participant, the Participant shall be entitled to receive, following the expiration of such performance period, a partial payment with respect to, or a partial right to exercise, such Performance Unit as determined by the Committee in its discretion; and (iv) voluntary termination or involuntary termination with Cause, all Performance Units held by the Participant shall be canceled as of the date of termination. Appendix B Section 9.Other Stock-Based Awards. The Committee is hereby authorized to grant to Participants such other Awards (including, without limitation, rights to dividends and dividend equivalents) that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares) as are deemed by the Committee to be consistent with the purposes of the Plan (provided that no rights to dividends and dividend equivalents shall be granted in tandem with an Award of Options or Stock Appreciation Rights). Subject to the terms of the Plan, the Committee shall determine the terms and conditions of such Awards; provided, that (i) if the vesting conditions applicable to any such Award to an employee relate exclusively to the passage of time and continued employment, such time period shall consist of not less than thirty-six (36) months, (ii) if the vesting of the award is contingent upon the achievement of any performance goals over a performance period, the performance period relating to such Award shall be at least twelve (12) months. Shares or other securities delivered pursuant to a purchase right granted under this Section 9 shall be purchased for such consideration, which may be paid by such method or methods and in such form or forms, including, without limitation, cash, Shares, other securities, other Awards, or other property, or any combination thereof, as the Committee shall determine, the value of which consideration, as established by the Committee, shall, except in the case of Substitute Awards, not be less than the Fair Market Value of such Shares or other securities as of the date such purchase right is granted. To the extent that any Other Stock-Based Awards granted by the Committee are subject to Code Section 409A as nonqualified deferred compensation, such Other Stock-Based Awards shall be subject to terms and conditions that comply with the requirements of Code Section 409A to avoid adverse tax consequences under Code Section 409A. Section 10.Effect Of Termination On Certain Awards. Except as otherwise provided by the Committee at the time an Option or Stock Appreciation Right is granted or in any amendment thereto, if a Participant ceases to be employed by, or serve as a non-employee director of, the Company or any Affiliate, then: (a) if termination is for Cause, all Options and Stock Appreciation Rights held by the Participant shall be canceled as of the date of termination; (b) if termination is voluntary or involuntary without Cause, the Participant may exercise each Option or Stock Appreciation Right held by the Participant within three months after such termination (but not after the expiration date of such Award) to the extent such Award was exercisable pursuant to its terms at the date of termination;provided, however, if the Participant should die within three months after such termination, each Option or Stock Appreciation Right held by the Participant may be exercised by the Participant’s estate, or by any person who acquires the right to exercise by reason of the Participant’s death, at any time within a period of one year after death (but not after the expiration date of the Award) to the extent such Award was exercisable pursuant to its terms at the date of termination; (c) if termination is (i) by reason of Retirement (or alternatively, in the case of a non-employee director, at a time when the Participant has served for five full years or more and has attained the age of sixty), or (ii) by reason of a Disability, each Option or Stock Appreciation Right held by the Participant shall, at the date or Retirement or Disability, become exercisable to the extent of the total number of shares subject to the Option or Stock Appreciation Right, irrespective of the extent to which such Award would otherwise have been exercisable pursuant to the terms of the Award at the date of Retirement or Disability, and shall otherwise remain in full force and effect in accordance with its terms; (d) if termination is by reason of the death of the Participant, each Option or Stock Appreciation Right held by the Participant may be exercised by the Participant’s estate, or by any person who acquires the right to exercise Appendix B such Award by reason of the Participant’s death, to the extent of the total number of shares subject to the Award, irrespective of the extent to which such Award would have otherwise been exercisable pursuant to the terms of the Award at the date of death, and such Award shall otherwise remain in full force and effect in accordance with its terms. Section 11.General Provisions Applicable To Awards. (a) Awards shall be granted for no cash consideration or for such minimal cash consideration as may be required by applicable law. (b) Awards may, in the discretion of the Committee, be granted either alone or in addition to or in tandem with any other Award. Awards granted in addition to or in tandem with other Awards may be granted either at the same time as or at a different time from the grant of such other Awards or awards. (c) Subject to the terms of the Plan, payments or transfers to be made by the Company upon the grant, exercise or payment of an Award may be made in such form or forms as the Committee shall determine including, without limitation, cash, Shares, other securities, other Awards, or other property, or any combination thereof, and may be made in a single payment or transfer, in installments, or on a deferred basis, in each case in accordance with rules and procedures established by the Committee. Such rules and procedures may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of dividend equivalents in respect of installment or deferred payments. Notwithstanding the foregoing, in no event shall the Company extend any loan to any Participant in connection with the exercise of an Award; provided, however, that nothing contained herein shall prohibit the Company from maintaining or establishing any broker-assisted cashless exercise program. (d) Unless the Committee shall otherwise determine, no Award and no right under any Award shall be assignable, alienable, saleable or transferable by a Participant otherwise than by will or by the laws of descent and distribution. In no event may an Award be transferred by a Participant for value. Each Award, and each right under any Award, shall be exercisable during the Participant’s lifetime only by the Participant or, if permissible under applicable law, by the Participant’s guardian or legal representative. The provisions of this paragraph shall not apply to any Award which has been fully exercised, earned or paid, as the case may be, and shall not preclude forfeiture of an Award in accordance with the terms thereof. (e) All certificates for Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Shares or other securities are then listed, and any applicable Federal or state securities laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. (f) Every Award (other than an Option or Stock Appreciation Right) to a member of the Executive Group shall, if the Committee intends that such Award should constitute “qualified performance-based compensation” for purposes of Section 162(m) of the Code, include a pre-established formula, such that payment, retention or vesting of the Award is subject to the achievement during a performance period or periods, as determined by the Committee, of a level or levels, as determined by the Committee, of one or more of the following performance measures: (i) Return on Net Assets, (ii) Revenue Growth, (iii) Return on Common Equity, (iv) Total Shareholder Return, (v) Earnings Per Share, (vi) Net Revenue Per Employee (vii) Market Share, (viii) Return on Invested Capital, or (ix) Net Income. For any Award subject to any such pre-established formula, no more than 150,000 Shares can be paid in satisfaction of such Award to any Participant, subject to adjustment as provided in Section 5(e). Notwithstanding any provision of this Plan to the contrary, the Committee shall not be authorized to increase the amount payable under any Award to which this Section 11(f) applies upon attainment of such pre-established formula. Appendix B (g) Unless specifically provided to the contrary in any Award Agreement, upon a Change in Control, all Awards shall become fully vested and exercisable, and any restrictions applicable to any Award shall automatically lapse. Notwithstanding the foregoing, any Awards that are otherwise subject to Code Section 409A shall not be distributed or payable upon a Change in Control unless the Change in Control otherwise meets the requirements for a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company within the meaning of Code Section 409A and the regulations and other guidance promulgated thereunder; instead such Awards shall be distributed or payable in accordance with the Award’s applicable terms. (h) Non-employee Directors of the Company shall be entitled to defer the receipt of any Shares that may become issuable to them under any Award in accordance with the terms of the 1996 Directors’ Deferral Plan, as the same may be hereinafter amended, or any other plan that may be established by the Company that provides for the deferred receipt of such Shares. (i) Employees of the Company shall be entitled to defer the receipt of any Shares that may become issuable to them under any Award in accordance with the terms of the Deferred Compensation and Retirement Benefit Restoration Plan, as the same may be hereinafter amended, or any other plan that may be established by the Company that provides for the deferred receipt of such Shares. Section 12.Amendments And Termination. (a) Except to the extent prohibited by applicable law and unless otherwise expressly provided in an Award Agreement or in the Plan, the Board may amend, alter, suspend, discontinue, or terminate the Plan or any portion thereof at any time;provided, however, that no such amendment, alteration, suspension, discontinuation or termination shall be made without (i) shareholder approval (A) if the effect thereof is to increase the number of Shares available for issuance under the Plan or to expand the class of persons eligible to participate in the Plan or (B) if such approval is necessary to comply with any tax or regulatory requirement for which or with which the Board deems it necessary or desirable to qualify or comply or (ii) the consent of the affected Participant, if such action would adversely affect the rights of such Participant under any outstanding Award. Notwithstanding anything to the contrary herein, the Committee may amend the Plan in such manner as may be necessary to enable the Plan to achieve its stated purposes in any jurisdiction outside the United States in a tax-efficient manner and in compliance with local rules and regulations. In all events, no termination or amendment shall be made in a manner that is inconsistent with the requirements under Code Section 409A to allow for tax deferral. (b) The Committee may waive any conditions or rights under, amend any terms of, or amend, alter, suspend, discontinue or terminate, any Award theretofore granted, prospectively or retroactively, without the consent of any relevant Participant or holder or beneficiary of an Award;provided, however, that no such action shall impair the rights of any affected Participant or holder or beneficiary under any Award theretofore granted under the Plan; andprovided further that, except as provided in Section 5(e), no such action shall reduce the exercise price, grant price or purchase price of any Award established at the time of grant thereof; andprovided further, that the Committee’s authority under this Section 12(b) is limited in the case of Awards subject to Section 11(f), as set forth in Section 11(f); andprovided further, that the Committee may not act under this Section 12(b) in a way that is inconsistent with the requirements under Code Section 409A to allow for tax deferral. In no event shall an outstanding Option or Stock Appreciation Right be cancelled in exchange for cash or, except as provided in Section 5(e), replaced with a new Option or Stock Appreciation Right with a lower exercise price, without approval of the Company’s shareholders. (c) Except as noted in Section 11(f), the Committee shall be authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of events (including, without limitation, the events described in Section 5(e)) affecting the Company, or the financial statements of the Company, or of Appendix B changes in applicable laws, regulations or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan. (d) Any provision of the Plan or any Award Agreement to the contrary notwithstanding, in connection with a Business Combination, the Committee may cause any Award granted hereunder to be canceled in consideration of a cash payment or alternative Award made to the holder of such canceled Award equal in value to the Fair Market Value of such canceled Award. (e) The Committee may correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem desirable to carry the Plan into effect or to otherwise comply with the requirements of Code Section 409A so as to avoid adverse tax consequences under Code Section 409A. Section 13.Miscellaneous. (a) No employee, Participant or other person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of employees, Participants, or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to each recipient. (b) The Committee may delegate to one or more officers or managers of the Company, or a committee of such officers or managers, the authority, subject to such terms and limitations as the Committee shall determine, to grant Awards to, or to cancel, modify, waive rights with respect to, alter, discontinue, suspend or terminate Awards held by, employees who are not officers or directors of the Company for purposes of Section 16 of the Securities Exchange Act of 1934, as amended;provided, however, that any delegation to management shall conform with the requirements of the corporate law of New Jersey and with the requirements, if any, of the New York Stock Exchange, in either case as in effect from time to time. (c) The Company shall be authorized to withhold from any Award granted or any payment due or transfer made under any Award or under the Plan or from any compensation or other amount owing to a Participant the amount (in cash, Shares, other securities, other Awards, or other property) of withholding taxes due in respect of an Award, its exercise, or any payment or transfer under such Award or under the Plan and to take such other action (including, without limitation, providing for elective payment of such amounts in cash, Shares, other securities, other Awards or other property by the Participant) as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes. (d) Nothing contained in the Plan shall prevent the Company from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases. (e) The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company or any Affiliate. Further, the Company or the applicable Affiliate may at any time dismiss a Participant from employment, free from any liability, or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Agreement or in any other agreement binding the parties. The receipt of any Award under the Plan is not intended to confer any rights on the receiving Participant except as set forth in such Award. (f) If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction, or as to any person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform Appendix B to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award shall remain in full force and effect. (g) Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a Participant or any other person. To the extent that any person acquires a right to receive payments from the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company. (h) No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities or other property shall be paid or transferred in lieu of any fractional Shares, or whether such fractional Shares or any rights thereto shall be canceled, terminated or otherwise eliminated. Section 14.Effective Date Of Plan. The Plan shall be effective as of the date of its approval by the stockholders of the Company. Section 15.Term Of The Plan. No Award shall be granted under the Plan after THE HILTON SHORT HILLS FROM MANHATTAN Lincoln or Holland Tunnel to NJ Tpk to Exit 14. Continue on Rte. 78 West approx. 5 miles to Exit 48, Rte. 24 West. Take Exit FROM BROOKLYN Take Rte. 278/Belt Pkwy West to Verrazano Narrows Bridge. Continue to the Goethals Bridge to the NJ Tpk. North. Take Exit 14. Continue on Rte. 78 West approx. 5 miles to Exit 48, Rte. 24 West. Take Exit FROM NEWARK AIRPORT Take Rte. 78 West approx. 5 miles to Exit 48, Rte. 24 West. Take Exit FROM THE NJ TURNPIKE Take to Exit 14. Continue on Rte. 78 West approx. 5 miles to Exit 48, Rte. 24 West. Take Exit FROM NORTH EASTERN LONG ISLAND Take Throgs Neck or Whitestone Bridge off the Cross Island Pkwy. After toll, take GW Bridge to Rte. 80 West to the Garden State Pkwy South, to Exit 142 to Rte. 78 West. OR Take GW Bridge to the NJ Tpk South to Exit 14. Continue on Rte. 78 West approx. 5 miles to Exit 48, Rte. 24 West. Take Exit FROM TAPPAN ZEE BRIDGE Follow signs to NY Thruway; continue to Garden State Pkwy South. Take Exit 142 to Rte. 78 West. Continue to Exit 48, Rte. 24 West. Take Exit FROM THE GARDEN STATE PARKWAY SOUTHBOUND Take Exit 142 to Rte. 78 FROM THE GARDEN STATE PARKWAY NORTHBOUND Take Exit 142 to Rte. 78 West. Take first Exit, marked “Hillside/Rte. 78 West”. Take Rte. 78 West and continue to Exit 48, Rte. 24 West. Take Exit * * FROM EXIT 7C, JFK PARKWAY, LIVINGSTON/CALDWELL - FROM ROUTE 287 SOUTHBOUND Take Exit 37, Rte. 24 East; continue to Exit 7, “Summit/Livingston” and follow signs for JFK Parkway and Mall at Short Hills; make a left at second traffic light, then make animmediate leftinto the Hotel driveway. FROM ROUTE 280 WESTBOUND Take Exit 5A, “Livingston Avenue/Roseland”. Continue on Livingston Avenue approx. 4 miles through Livingston; cross South Orange Avenue, name will change to JFK Parkway. Continue on JFK Parkway; Hotel is approx. 1.5 miles down on right, opposite Mall at Short Hills. Electronic Voting Instructions Instead of mailing your proxy, you may choose one of the Vote by Internet • Go towww.investorvote.com/BDX • Or scan the QR code with your smartphone • Follow the steps outlined on the secure website Vote by telephone • Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone • Follow the instructions provided by the recorded message There is NO CHARGE to you for the call. • Outside the USA, US territories & Canada, call 1-781-575-2300 on a touch tone telephone. Standard rates will apply. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Voting instructions submitted by GSIP participants must be received by 12:00 p.m., EST, on January q IF YOU DO NOT VOTE VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q 1. Election of Directors: 2. Ratification of selection of independent registered public accounting firm. 4. Amendment to the Certificate of Incorporation. 3. Advisory vote to approve named executive officer compensation. 5. Amendments to the 2004 Employee and Director Equity-Based Compensation Plan. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the Signature 2 — Please keep signature within the Dear Shareholder/Plan Participant: Becton, Dickinson and Company (BD) encourages you to take advantage of Your vote is important. Thank you for voting. q IF YOU DO NOT VOTE VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q Proxy / Voting Instruction Card — BECTON, DICKINSON AND COMPANY Proxy Solicited on Behalf of the Board of Directors for the Annual Meeting on January 29, 2013 The undersigned hereby appoints Vincent A. Forlenza, Suketu Upadhyay, Jeffrey S. Sherman and Gary DeFazio, and any of them, with full power of substitution, proxies to attend the Annual Meeting of Shareholders of the Company to be held at 1:00 p.m. EST on Tuesday, January 29, 2013 at the Hilton Short Hills, 41 John F. Kennedy Parkway, Short Hills, New Jersey, and any adjournment thereof, and to vote all shares of the common stock of the Company which the undersigned is entitled to vote upon each of the matters referred to in this proxy and, in their discretion, upon such other matters as may properly come before the meeting. This does not apply to shares held through the Company plans referred to below. Where no choice is made on the reverse side of this form, the proxies will vote FOR all Director nominees and FOR Proposals 2, 3, 4 and 5. For plan participants.This card constitutes voting instructions to the respective trustees for any shares of common stock allocated to the undersigned under the Company’s 1996 Directors’ Deferral Plan (“DDP”), the Company’s Deferred Compensation and Retirement Benefit Restoration Plan (“DCP”) and, when so provided, the Global Share Investment Program (“GSIP”), and also constitutes voting instructions to the trustees for a proportionate number of shares of common stock in the DDP, DCP and GSIP for which voting instructions have not been received. This card also constitutes voting instructions to the trustee for any shares of common stock allocated to the undersigned under the Company’s Savings Incentive Plan (“SIP”). Shares for which no voting instructions have been received by the SIP trustee will be voted in the same proportion as those for which timely instructions have been received. You are encouraged to specify your choices by marking the appropriate boxes, SEE REVERSE SIDE. If you do not vote by telephone or over the Internet, please sign and return this card using the enclosed envelope. (Items to be voted appear on reverse side.) Comments— Please print your comments below. Meeting Attendance ¢Committee Membership and FunctionBoard’s operating Committees.Members • Retains and reviews the qualifications, independence and performance of BD’s registered public accounting firm (the “independent auditors”). • Reviews BD’s public financial disclosures and financial statements, and its accounting principles, policies and practices; the scope and results of the annual audit by the independent auditors; BD’s internal audit process; and the effectiveness of BD’s internal control over financial reporting.• Reviews BD’s guidelines and policies relating to enterprise risk assessment and risk management, and management’s plan for risk mitigation or remediation.• Oversees BD’s ethics and enterprise compliance practices.• Functions as a qualified legal compliance committee, if necessary.MembersChristopher JonesMarshall O. LarsenGary A. MecklenburgCathy E. MinehanJames F. OrrBertram L. Scottand expertise requirements of the NYSE.NYSE for audit committee members. The Board also has determined that each of Messrs. Anderson, Larsen, Orr and Scott and Ms. Minehan, qualifies as an “audit committee financial expert” under the rules of the SEC.The Audit Committee regularly meets separately with BD’s internal auditors and the internal and externalindependent auditors to ensure full and frank communications with the Audit Committee.Members • Reviews BD’s compensation and benefits policies, recommends the compensation of the Chief Executive Officer to the independent members of the Board for their approval, and approves the compensation of BD’s other executive officers. • Approves all employment, severance and change of control agreements of BD with executive officers.11• Serves as the granting and administrative committee for BD’s equity compensation plans.• Oversees certain BD benefit plans.MembersEdward F. DeGraan—Chair Basil L. AndersonMarshall O. LarsenJames F. OrrWillard J. Overlock, Jr.Bertram L. Scottand Benefits Committee meets the independence requirements of the NYSE. and Benefits Committee oversees the compensation program for the named executive officers listed in the Summary Compensation Table on page 3739 and for BD’s other executive officers. The Compensation Committee recommends compensation actions regarding the Chief Executive Officer to the full Board and Benefitsis delegated the authority to take compensation actions with respect to BD’s other executive officers. The Compensation Committee doesmay not delegate these responsibilities to another Committee, an individual director or membermembers of management. and Benefits Committee’s meetings are typically attended by BD’s Chief Executive Officer, Senior Vice President—Human Resources and others who support the Compensation and Benefits Committee in fulfilling its responsibilities. The Compensation and Benefits Committee considers management’s views relating to compensation matters, including the performance metrics and targets for BD’s performance-based compensation. Management also provides information (which is reviewed by our Internal Audit Department) to assist the Committee in determining the extent to which performance targets have been achieved. This includes any recommended adjustments to BD’s operating results when assessing BD’s performance. The Chief Executive Officer and Senior Vice President—Human Resources also work with the Compensation and Benefits Committee chair in establishing meeting agendas. and Benefits Committee meets in executive session with no members of management present for part of each of its regular meetings. The Compensation and Benefits Committee also meets in executive session when considering compensation decisions regarding our executive officers.AdvisorConsultant and Benefits Committee is also assisted in fulfilling its responsibilities by its independent advisor,consultant, Pay Governance LLC (“Pay Governance”). Pay Governance is engaged by, and reports directly to, the Compensation Committee. The Compensation Committee is not aware of any conflict of interest on the part of Pay Governance relating to the services performed by Pay Governance for the Compensation Committee. During fiscal year 2012, Pay Governance was not engaged to perform any services for BD or BD’s management. The Compensation Committee has adopted a policy prohibiting Pay Governance from providing any services to BDBenefits Committee. has expressed its intention that such approval will be given only in exceptional cases. No other consultant was used by the Compensation Committee or management with respect to the 2012 compensation of BD’s executive officers. and Benefits Committee by management, prepares additional materials as may be requested by the Compensation and Benefits Committee, and attends Compensation and Benefits Committee meetings. In its advisory role, among other things, Pay Governance assists the Compensation and Benefits Committee in the design and implementation of BD’s compensation program. This includes assisting the Compensation and Benefits Committee in selecting the key elements to include in the program, the targeted payments for each element, and the establishment of performance targets. Pay Governance also provides market comparison data, thatwhich is one of the factors considered by the Compensation and Benefits Committee in making compensation decisions, and makes recommendations to the Compensation and Benefits Committee regarding the compensation of BD’s Chief Executive Officer.and Benefits Committee with respect to the competitiveness of BD’s compensation program in comparison to industry practices, and identifies any trends in executive compensation. During fiscal year 2010, Pay Governance was not engaged to perform any services for BD’s management. The Compensation and Benefits Committee has adopted a policy prohibiting Pay Governance from providing any services to BD’s management without the Compensation and Benefits Committee’s prior approval, and has expressed its intention that such approval will be given only in exceptional cases.As part of this process, the Chief Executive Officer provides a self-assessment report. At the following Board meeting, the Board sets the compensation of the Chief Executive Officer after considering the assessmentresults of the Chief12Executive Officer’s performance,review, market comparison data and the recommendations of the Compensation and Benefits Committee. Neither the Chief Executive Officer nor any other members of management are present during this session. The Chief Executive Officer does not play a role in determining or recommending his own compensation. and Benefits Committee is responsible for determining the compensation of BD’s other executive officers. The Chief Executive Officer, in consultation with the Senior Vice President—Human Resources, reviews the performance of the other executive officers with the Compensation and Benefits Committee and presentsmakes compensation recommendations for its consideration. The Compensation and Benefits Committee determines the compensation for these executives, in consultation with Pay Governance, after considering the Chief Executive Officer’s recommendations, market comparison data regarding compensation levels among peer companies and the views of Pay Governance. All decisions regarding the compensation of BD’s other executive officers are made in executive session.Corporate Governance and Nominating Committee, which is discussed below.CORPORATESCIENCE, INNOVATION AND SCIENTIFIC AFFAIRSTECHNOLOGY COMMITTEEMembers • Oversees BD’s research and development activities. • Oversees BD’s policies, practices and procedures impacting BD’s image and reputation and its standing as a responsible corporate citizen, including, without limitation, issues relating to communications with BD’s key stakeholders; community relations; and public policy and government relations activities (including political contributions).MembersHenry P. Becton, Jr.Claire M. Fraser-LiggettChristopher JonesAdel A.F. MahmoudGary A. MecklenburgCathy E. MinehanMembers • Identifies and recommends candidates for election as directors to the Board. • Reviews the composition, organization, structure and function of the Board and its Committees, as well as the performance and compensation of non-management directors.• Monitors BD’s corporate governance and Board practices, and oversees the Board’s self-evaluation process.MembersEdward F. DeGraanClaire M. Fraser-LiggettAdel A.F. MahmoudWillard J. Overlock, Jr.Alfred SommerCorporate Governance and Nominating Committee meets the independence requirements of the NYSE. The CorporateAs stated above, the Governance and Nominating Committee also reviews the compensation program for the non-management directors and makes recommendations to the Board regarding their compensation, and doesmay not delegate these responsibilities to another Committee, an individual director or membermembers of management. The Corporate Governance and Nominating Committee has retained Pay Governance as an independent advisorconsultant for this purpose. Pay Governance’s responsibilities include providing assistance in developing an appropriate non-management director compensation peer group; generating market comparison data on the elements and levels of non-management director compensation at peer companies;companies, tracking trends in13non-management director compensation practices;practices, and advising the Corporate Governance and Nominating Committee regarding the components and levels of non-management director compensation. The Governance Committee is not aware of any conflict of interest on the part of Pay Governance arising from these services. Executive officers do not play any role in either determining or recommending non-management director compensation.Board, Committee and Annual Meeting Attendance2012:2010: 6 1211 7 Corporate and Scientific Affairs Committee6 655 2010.2012.2010.2012. BD’s non-management directors met in executive session at each of the Board’s six regularBoard meetings held during fiscal year 2010.2012.Meeting of Shareholders.With the exception ofAll but one director who had a scheduling conflict, all of the fifteen directors then in officeserving attended BD’s 20102012 Annual Meeting.Non-Management Directors’ Compensationa Lead Director fee.fees. Of the base compensation paid to thenon-management directors (not including(which does not include Committee chair and Lead Director fees), approximately two-thirds currently is equity compensation that directors will beare required to retain until they complete their service on the Board. See “Corporate Governance—Significant Governance Practices—Equity Ownership by Directors” on page 20. This retention feature serves to better align the interests of the directors and BD shareholders and ensure compliance with the director share ownership guidelines discussed below.guidelines. Mr. LudwigForlenza does not receive compensation related to his service as a director.$75,000$81,000 for services as a director. Directors do not receive meeting attendance fees.as of the date of the meeting, then valued at $150,000.$162,000 (using the same methodology used to value awards made to executive officers). Directors newly elected byto the Board receive a restricted stock unit grant that is pro-rated from the effective date of their election to the next Annual Meeting. The restricted stock units are valued using the same methodology used for the most recent annual grant of equity compensation to BD’s executive officers. The shares of BD common stock underlying the restricted stock units are not issuable until a director’s separation from the Board.$6,500$10,000 is paid to each Committee chair, except that the fee for the Audit Committee chair is $10,000$15,000 in recognition of the Audit Committee’s responsibilities. An annual fee of $25,000 is paid to the Lead Director. No fee is paid to the chairChair of the Executive Committee. An annual fee of $10,000 is paid to the Lead Director.spousespousal travel arewere minimal. In the event14directors utilize other private aircraft, they are reimbursed for the incremental cost thereof. Directors are also reimbursed for attending director education courses. BD occasionally invites spouses of directors to Board-related business events, for which they are reimbursed their travel expenses.employees,associates, to participate in BD’s Matching Gift Program, pursuant to which BD matches contributions made by a director or employee to qualifying nonprofit organizations. The aggregate annual limit per participant in 2010 wasis $5,000.theBD’s non-management directors during fiscal year 2010.2012.20102012 Non-Management Directors’ Compensation Fees earned or Stock All Other Name paid in cash Awards(1) Compensation(2) Total Basil L. Anderson $ 85,000 $ 150,420 — $ 235,420 Henry P. Becton, Jr. 91,500 150,420 — 241,920 Edward F. DeGraan 81,500 150,420 — 231,920 Claire M. Fraser-Liggett 75,000 150,420 — 225,420 Christopher Jones 13,726 78,216 — 91,942 Marshall O. Larsen 75,000 150,420 — 225,420 Adel A.F. Mahmoud 75,000 150,420 — 225,420 Gary A. Mecklenburg 75,000 150,420 $ 5,000 230,420 Cathy E. Minehan 75,000 150,420 — 225,420 James F. Orr 75,000 150,420 — 225,420 Willard J. Overlock, Jr. 75,000 150,420 5,000 230,420 Bertram L. Scott 75,000 150,420 — 225,420 Alfred Sommer 81,500 150,420 1,500 233,420 Fees Earned
or Paid
in Cash(1) Stock
Awards(2) Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings(3) All Other
Compensation(4) Total $ 94,000 $ 167,170 — — $ 261,170 114,000 167,170 $ 1,158 — 282,328 89,000 167,170 — — 256,170 79,000 167,170 — — 246,170 79,000 167,170 — $ 5,000 251,170 79,000 167,170 1,226 — 247,396 79,000 167,170 — — 246,170 79,000 167,170 — — 246,170 25,000 0 — — 25,000 79,000 167,170 — — 246,170 79,000 167,170 — — 246,170 15,481 84,172 — — 99,653 79,000 167,170 986 — 247,156 89,000 167,170 — 5,000 261,170 (1) Reflects a cash retainer at the rate of $75,000 per annum for part of the year, and a cash retainer at the rate of $81,000 per annum for the remainder of the year. (2) The amounts shown in the “Stock Awards” column reflectsreflect the grant date fair value under FASB ASC Topic 718 of restricted stock units awarded to non-management directors during the fiscal year. The amounts shown are slightly different than the $162,000 target award value, since a 20-day average of BD’s stock price is used to value the units granted rather than the grant date price. For a discussion of the assumptions made by us in arriving at the grant date fair value of these awards, see noteNote 7 to the consolidated financial statements that are included in our Annual Report onForm 10-K for the fiscal year ended September 30, 2010.2012.1562.Listed below are the aggregate outstanding restricted stock unit awards and option awards held by each non-management director at the end of fiscal year 2010.2012. Stock options have not been issued to non-management directors since the 2005 Annual Meeting. Stock Awards Option Awards Outstanding at Outstanding at September 30, September 30, Name 2010 2010 Basil L. Anderson 10,696 2,160 Henry P. Becton, Jr. 12,024 11,605 Edward F. DeGraan 12,024 4,436 Claire M. Fraser-Liggett 7,371 0 Christopher Jones 1,147 0 Marshall O. Larsen 5,709 0 Adel A.F. Mahmoud 7,371 0 Gary A. Mecklenburg 10,696 2,160 Cathy E. Minehan 5,709 0 James F. Orr 12,024 4,436 Willard J. Overlock, Jr. 12,024 9,544 Bertram L. Scott 12,024 7,217 Alfred Sommer 12,024 4,436 Stock Awards
Outstanding at
September 30,
2012 (#) Option Awards
Outstanding at
September 30,
2012 (#) 15,214 2,160 16,601 7,217 16,601 4,436 11,739 0 5,237 0 10,004 0 11,739 0 15,214 2,160 16,601 4,436 16,601 4,436 1,143 0 16,601 7,217 16,601 0 (3) Represents interest on deferred directors’ fees in excess of 120% of the federal long-term rate. (2)(4) Amounts shown represent matching gifts paid or payable to charitable organizations with respect to contributions made by the named director during fiscal year 2010 under BD’s Matching Gift Program, which is more fully discussed on page 15 under “Other Arrangements.”the previous page.Changes to Non-Management Director CompensationDuring fiscal year 2010, the Board undertook a review of the compensation of its non-management directors. This review included an analysis of the director compensation practices of certain peer companies, including the forms of equity compensation used, the mix of cash and equity compensation, and total compensation.The peer group included the following companies: Agilent Technologies, Inc.; Alcon, Inc.; Allergan, Inc.; C.R. Bard, Inc.; Baxter International Inc.; Beckman Coulter, Inc.; Boston Scientific Corporation; Covidien plc; Hospira, Inc.; Medtronic, Inc.; PerkinElmer, Inc.; St. Jude Medical, Inc.; Stryker Corporation; Thermo Fisher Scientific Inc.; and Zimmer Holdings, Inc.As a result of its review, the Board approved the following revised compensation structure for its non-management directors, effective at the conclusion of the 2011 Annual Meeting, so as to maintain parity with the non-management director compensation being paid by the peer group.(5) • Annual fees for all Committee chairs, exceptMs. Minehan left the Audit Committee, will be increased from $6,500 to $10,000;• The Audit Committee chair’s annual fee will be increased from $10,000 to $15,000 in recognition of the Audit Committee chair’s significant responsibilities;• The Lead Director’s annual fee will be increased from $10,000 to $25,000 in recognition of the increase in the Lead Director’s responsibilities; and• The annual cash retainer and the value of the annual grant of restricted stock units will not be increased.Board on January 31, 2012.unitsunit awards upon leaving the Board. A general description of the 1996 Directors’ Deferral Plan appears on page 6.16Communication with Directors • by mail, addressed to BD Lead Director, P.O. Box 264, Franklin Lakes, New Jersey07417-0264; • by calling the BD Ethics Help Line, an independent toll-free service, at1-800-821-5452 (available seven days a week, 24 hours a day; callers from outside North America should use “AT&T Direct” to reach AT&T in the U.S. and then dial the above toll-free number); or• by email toethics_office@bd.com. asthat are unrelated to a director’s duties and responsibilities as a Board member may be excluded by the Director of Corporate Security,our corporate security department, including, without limitation, solicitations and advertisements;advertisements, junk mail;mail, product-related communications;communications, job referral materials such as resumes; surveys;and resumes, surveys, and material that is determined to be illegal or otherwise inappropriate. The director(s) to whom such information is addressed is informed that the information has been removed, and that it will be made available to such director(s) upon request.Corporate Governance Principles The Principles are available on BD’s website atwww.bd.com/investors/corporate_governance/.Printed copies of the Principles may be obtained, without charge, by contacting the Corporate Secretary, BD, 1 Becton Drive, Franklin Lakes, New Jersey 07417-1880, phone 1-201-847-6800.itsour Corporate Governance Principles (the “Principles”). The Principles originally adopted in 2001, set forth the Board’s views and practices regarding a number of governance topics, and the Corporate Governance and Nominating Committee assesses the Principles on an ongoing basis BD’s corporate governance practices in light of evolvingcurrent practices. The Principles cover a wide arrayrange of subject areas,topics, including voting for directors; board leadership structure; the designation of a Lead Director to represent non-management directors; selection of director nominees; relationships between directors and BD;director independence; annual evaluationsself-evaluations of the Chief Executive Officer, the Board and its Committees and individual directors;Committees; conflicts of interest; and charitable contributions to entities with which BD’s executive officers and directors are affiliated, each of which is discussed below, along withand other significant governance practices.Board Leadership StructureAs statedPrinciples,context of the individuals involved and the specific circumstances facing a company. Accordingly, what the Board currentlybelieves is the right board leadership structure may vary as circumstances warrant.view thatBoard during Mr. Forlenza’s transition to his new role. Upon Mr. Ludwig’s departure from the Board in June of this year, the Board appointed Mr. Forlenza to the additional role of Chairman. The Board believes it is in BD’s best interest for its Chief Executive Officerinterests to have Mr. Forlenza also to serve as the Board’s Chairman. The Board believesChairman, as this arrangement permits a clear, unified strategic vision for BD that ensures alignment between the Board and management, provides clear leadership for BD and helps ensure accountability for BD’s performance.The Board’s goal is to achieve the optimal model for effective oversight of BD’s management. It believes that there is no single, generally accepted approach to providing Board leadership, and that each of the possible leadership structures for a board must be considered in the context of the individuals involved and the specific circumstances facing a company. Accordingly, given the dynamic and competitive environment in which BD operates, the right Board leadership structure may vary as circumstances warrant, as has occurred at BD when deemed appropriate by the Board.The Board believes that its current leadership structure provides independent Board leadership and engagement while deriving the benefit of having the Chief Executive Officer also serve as Chairman. As the individual with primary responsibility for managing BD’sday-to-day operations and with in-depth knowledge and understanding of BD, heMr. Forlenza is best positioned to lead the Board through reviews of key business and strategic issues. Havingbusiness operations.BD’s strong corporate governance practices have provided balancethe business. As such, this structure provides independent Board leadership and accountability toengagement, while deriving the unified rolebenefit of Chairman and Chief Executive Officer. This is evidenced by a substantial majority of independent and experienced17Officer and other members of senior management.non-management directors, including a Lead Director with specified responsibilities on behalf ofhaving the non-management directors, key Board committees comprised entirely of independent directors, and strong and effective Principles.The Principles provide for a Lead Director to be designated by the independent directors whenever the Chairman is not an independent director. The Board has designated a Lead Director since 2002. While the designation is subject to the annual review of the Corporate Governance and Nominating Committee, the Lead Director is expected to serve in such capacity for several years. BD’s Lead Director currently is Henry P. Becton, Jr. BD’s Lead Director plays a broad role that has expanded since the position was created, and currently includes the following responsibilities:• Presides over executive sessions of the non-management directors and over Board meetings in the absence of the Chairman;• Helps set Board agendas and meeting schedules;• Ensures the adequacy of the flow of information from the Chief Executive Officer to non-management directors;• Coordinates the evaluation of the Chief Executive Officer by the non-management directors;• Acts as a liaison between the non-management directors and the Chief Executive Officer; and• Serves as a contact person to facilitate communications between BD’s employees, shareholders and other constituents and the non-management directors.Chairman.The Lead Director also is a valuable resource to the Chairman and Chief Executive Officer also serve as part of an informal consultative process on key Board and corporate governance issues.Board’s Oversight of RiskEnterprise Risk Managemententerprise risk management (“ERM”) to identify, aggregate, assess, manage and mitigate a broad range of risks across BD’s multiple businesses, regions and functions and to ensure alignment of our risk assessment and mitigation efforts with BD’s corporate strategy. The Audit Committee, through the authority delegated to it by the Board of Directors, is primarily responsible for overseeing BD’s ERM activities to determine whether thatthe process is functioning as intendedeffectively and is consistent with BD’s business and strategy. At least twice a year, senior management reviews the results of its ERM activities with the Audit Committee, including the process used within the organization to identify risks, management’s assessment of the significant categories of risk faced by BD (including any changes in such assessment since the last review), and management’s plans to mitigate the potential exposures. On at least an annual basis, the significant risks identified through BD’s ERM activities and the related mitigation plans are reviewed with the full Board. Often, particular risks are reviewed in-depth with the Audit Committee or the full Board at subsequent meetings. to its involvement with ERM, the full Board reviews the risks associated with BD’s strategic plan and discusses the appropriate levellevels of risk in light of BD’s objectives. This is done through an annual strategic planningstrategy review process, and, because ERM is dynamic, periodically throughout the year as part of its ongoing review of corporate strategy, and otherwise as necessary. The full Board also regularly oversees other areas of potential risk, including BD’s capital structure, acquisitions and divestitures, and succession planning for BD’s Chief Executive Officer and other members of senior management.responsibility.oversight. The Audit Committee oversees BD’s accounting and financial reporting processes and the integrity of BD’s financial statements, BD’s processes to ensure compliance with laws, and its hedging activities and insurance coverages. The Compensation and Benefits Committee oversees risks associated with BD’s compensation practices and programs, and the Corporate Governance and Nominating Committee oversees risks relating to BD’s corporate governance practices, including director independence, related person transactions and conflicts of interest. In performing this function,connection with its oversight responsibilities, each Committee often meets with members of management who are primarily responsible for the management of risk in their respective areas, including BD’s Chief Financial Officer, business unit leaders, Senior Vice President–Human Resources, Senior Vice President and General Counsel, Senior Vice President–Regulatory Affairs, and Chief Ethics and Compliance Officer.18Risk Assessment of Compensation Programswemanagement reviewed the design of BD’s compensation and benefits programs (in particular our performance-based compensation programs) and related policies, potential risks that could be created by the programs, and features of our programs and corporate governance generally that help to mitigate risk. Among the factors we considered were the mix of cash and equity compensation, and of fixed and variable compensation, paid to our associates,associates; the balance betweenshort- and long-term objectives ofin our incentive compensation,compensation; the performance targets, mix of performance metrics, performance targets,vesting periods, threshold performance requirements and funding formulas related to our incentive compensation,compensation; the degree to which programs are formulaic or providedprovide discretion to determine payout amounts,amounts; caps on payouts,payouts; our clawback and share ownership policies,policies; and our general governance structure. Management reviewed and discussed the results of this assessment with the Compensation and Benefits Committee. Based on this review, we believe that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the BD.Director Nomination ProcessCorporate Governance and Nominating Committee reviews the skills, characteristics and experience of potential director candidates for election to the Board, and recommends nominees for director to the full Board for approval. The assessment ofIn making its recommendations, the Committee assesses the overall composition of the Board, encompasses considerations ofincluding diversity, age, skills, international background, and significant experience and prominence among directors in areas ofIn considering the needs of the Board, which can vary at different times, theThe Board seeks to achieve among its directors a diversity of viewpoint, experience, background, knowledge, geography, ethnicity and gender.gender that fits the needs of the Board at that particular time.Corporate Governance and Nominating Committee will seek individuals with backgrounds and qualities that, when combined with those of BD’s other directors, provide a blend of skills and experience that will further enhance the Board’s effectiveness. Fromtime-to-time, the Corporate Governance and Nominating Committee has retained an executive search firm to assist it in its efforts to identify and evaluate potential director candidates.Corporate Governance and Nominating Committee believes that any nominee for director must meet the following minimum qualifications:• Candidates should be persons of high integrity who possess independence, forthrightness, inquisitiveness, good judgment and strong analytical skills.• Candidates should demonstrate a commitment to devote the time required for Board duties including, but not limited to, attendance at meetings.• Candidates should possess a team-oriented ethic and be committed to the interests of all shareholders as opposed to those of any particular constituency.Corporate Governance and Nominating Committee assesses the characteristics and performance of incumbent director nominees against the above criteria as well, and, to the extent applicable, considers the impact of any change in the principal occupations of such directors during the last year. Upon completion of the individual director evaluation process, the Corporate Governance and Nominating Committee reports its conclusions and recommendations for nominations to the full Board.Corporate Governance and Nominating Committee’s policy to consider referrals of prospective nominees for the Board from other Board members and management, as well as shareholders and other external sources, such as retained executive search firms. The Corporate Governance and Nominating Committee utilizes the same criteria for evaluating candidates irrespective of their source.19Significant Governance PracticesIn 2009, in response to changing shareholder views and evolving corporate governance practices, Restated Certificate of Incorporation was amended to provide for the annual election of directors. In recommending this action, the Board recognized that many investors and commentators believe that the election of directors is the primary means for shareholders to influence corporate governance policies and hold management accountable for implementing those policies.are elected annually. The Board also notedbelieves that annual elections of directors are in line with emergingreflect a corporate governance practices, providingbest practice, as it provides shareholders with the opportunity to registerexpress their views on the performance of the entire Board each year.Thehas adopted a Principle that provides that any nominee in an uncontested electionof Directors. Any incumbent director who receives more “withhold” votes than “for” votes mustfails to receive the requisitevote (the “Director Resignation Policy”).vote. The Corporate Governance and Nominating Committee will consider and recommend to the Board whether to accept the resignation offer. The Board will decide the action to take with respect to the offer of resignationact on such recommendation and publicly disclose its decision within 90 days following the shareholder vote. The Board’s decision will be disclosed in a report on aForm 8-K filed by BD with the SEC within four business days following the decision. Any director who offers to submit his or her resignation pursuant to this provision will not participate in the deliberations of either the Corporate Governance and Nominating Committee or the Board. Consideration of all relevant factors on acase-by-case basis pursuant to the Director Resignation Policy gives the Board flexibility and enables it to avoid undesirable and disruptive governance consequences. This structure allows the Board the opportunity to identify and assess the reasons for the vote, including whether the vote is attributable to dissatisfaction with a director’s overall performance or is the result of shareholder views on a particular issue. The issue, and enables it to avoid undesirable and disruptive governance consequences.believes this structure allows BD to maintain a stable Board of experienced and knowledgeable directors while evaluating an appropriate response to shareholder dissatisfaction. The complete terms of this policy are included in the Principles.Self-EvaluationBoard EvaluationEach year the Board evaluatesconducts a self-evaluation of its performance and effectiveness. As part of this process, each director completes a Board Evaluation Forman evaluation form on specific aspects of the Board’s role, organization and meetings. The collective comments are then presented by the Chair of the Corporate Governance and Nominating Committee to the full Board. As part of the evaluation, the Board assesses the progress in the areas targeted for improvement a year earlier, and develops actions to be taken to enhance the Board’s effectiveness over the next year. The Board’s evaluation covers many areas (a complete list is available on BD’s website atwww.bd.com/investors/corporate_governance). Additionally, each Board Committee conducts an annual self-evaluation of its performance through a similar process. the compensation structure for non-management directors provides that a significant portion of non-management director compensation is in the form of restricted stock units that are not distributable until a director completes his or her service on the Board. The Board believes these equity interests help to better align the interests of the non-management directors with shareholders. Under the Board’s share ownership guidelines, each non-management director is required to own shares of common stock (which includes restricted stock units) valued at 50% of the amount obtained by multiplyingfive times the annual cash retainer by the number of years the director has served. Each non-management director who has served for at least one full year currently owns shares in an amount sufficient toand must comply with these guidelines.the guidelines within three years of joining the Board.20under BD’s Matching Gift Program) to entities with which BD’s directors executive officers, and their families are affiliated must be approved by the Corporate Governance and Nominating Committee. In addition, BD is required by the Principles to post on its website, atwww.bd.com/investors/corporate_governance/, an Annual Report of Charitable Contributions (the “Contributions Report”) listing all such contributions and pledges made by BD to organizations affiliated with any director or executive officer during the preceding fiscal year in an amount of $10,000 or more. The Contributions Report, which BD has voluntarily issued since 2002, includes a discussion of BD’s contributions philosophy and the alignment of BD’s philanthropic activities with its philosophy, together with additional information about each contribution or pledge.Recovery of CompensationThe Board has adopted a policy that enables BD to recover incentive compensation paid to a BD Leadership Team member based on BD’s financial results that are later restated as a result of such member’s misconduct. This policy also grants the Board the ability to recover from members of the BD Leadership Team who were not involved in such misconduct the amount by which any incentive compensation payout exceeded the amount they would have been paid based on the restated results. BD’s compensation recovery policy is available on BD’s website atwww.bd.com/investors/corporate_governance/.Equity Grant DatingThe Compensation and Benefits Committee has adopted a comprehensive policy that incorporated BD’s existing practices regarding the issuance of equity grants that effectively guard against the backdating of awards, and added a provision intended to ensure that public announcements are not timed to affect the valuation of an equity grant. BD’s equity grant dating policy is available on BD’s website atwww.bd.com/investors/corporate_governance/.Enterprise Complianceis aimed at ensuringseeks to ensure that BD is effective at preventinghas policies and detectingprocedures designed to prevent and detect violations of the many laws, regulations and policies affecting its business, (“Enterprise Compliance”), and that BD continuously encourages lawful and ethical conduct. Launched in 2005, Enterprise ComplianceBD’s enterprise compliance function supplements the various compliance and ethics functions that were alreadyare also in place at BD, and seeks to ensure better coordination and effectiveness through program design, prevention, and promotion of an organizational culture of compliance. A Compliance Committee comprised of members of senior management oversees the activities of the Chief Ethics and Compliance Officer. Another key element of this program is training. Courses offered include a global computer-basedon-line compliance training program focused on BD’s BusinessCode of Conduct, and Compliance Guide, as well as other courses covering various compliance topics such as antitrust, anti-bribery, conflicts of interest, financial integrity, industry marketing codes and information security.Director Independence; Policy Regarding Related Person TransactionsPrinciple No. 7,our Principles, a director is deemed not to be independent if the director has a direct or indirect material relationship with BD (other than his or her relationship as a director). The Corporate Governance and Nominating Committee annually reviews the independence of all directors and nominees for director and reports its findings to the full Board. To assist in this review, the Board has adopted director independence guidelines based on the NYSE rules (“Independence Guidelines”) that are contained in Principle No. 7. The NYSE rules and the Independence Guidelines include a bright-line quantitative test whereby a director may not be deemed independent if there is a transaction involving BD and an organization with which a director or an immediate family member is, or was, affiliated during the preceding three-fiscal year period (a “director-affiliated organization”), in which payments made to, or from, the director-affiliated organization exceeded the greater of $1 million or 2% of the director-affiliated organization’s consolidated gross revenues for any fiscal year during such period.Principles. The Independence Guidelines set forth certain typescategories of relationships (and related dollar thresholds) between BD and directors and their immediate family members, or entities with which they are affiliated, that the Board, in its judgment, has deemed to be either material or immaterial for purposes of assessing a director’s independence. In the event a director has any relationship with BD that is not addressed in the Independence Guidelines, the independent members of the Board review the facts and circumstances to determine whether such relationship is material. The Principles are available on BD’s website atwww.bd.com/investors/corporate-governance/. The Independence Guidelines are contained in Principle No. 7.directorsnominees for director are independent under the NYSE rules and our Independence Guidelines: Basil L. Anderson, Henry P. Becton, Jr., Catherine M. Burzik, Edward F. DeGraan, Claire M. Fraser, Christopher Jones, Claire M. Fraser-Liggett, Marshall21O. Larsen, Adel A.F. Mahmoud, Gary A. Mecklenburg, Cathy E. Minehan, James F. Orr, Willard J. Overlock, Jr., Rebecca W. Rimel, Bertram L. Scott and Alfred Sommer. Edward J. LudwigThe Board had also previously determined that Cathy E. Minehan, who had served on the Board up to last year’s annual meeting, was independent under the NYSE rules and the Principles. Vincent A. Forlenza is an employee of BD and, therefore, is not independent under the NYSE rules and the Principles.non-management directorsnominees is independent, the Board reviewed BD’s transactions or other dealings in the ordinary course of business with director-affiliated organizations.organizations with which a director may be affiliated. Such affiliations included service by the director or an immediate family member as an officer, employee, adjunct facultyor member orof a governing or advisory board member of such organizations.board. In conducting its review, the Board determined that, in each instance, the nature of the relationship, the degree of the director’s involvement with the director-affiliated organization and the amount involved would not impair the director’s independence under the Independence Guidelines. In addition, in most instances, the director played no active role in the director-affiliated organization’s relationship with BD, and, in some instances, the relationship involved a unit of such organization other than the one with which the director has beenis involved. Accordingly, the Board determined that none of these relationships was material or conflicted with BD’s interests, or impaired the relevant director’s independence or judgment.in this respect consisted of payments related to the purchase or sale of productsand/or services (in the cases of Anderson, Becton, Burzik, Fraser, Jones, Larsen, Mecklenburg, Minehan, Orr, Overlock, Scott, and Sommer), the licensing of intellectual property rights or other activities (in the cases of Messrs. Anderson, Becton, Jones, Larsen, Mecklenburg, Orr, Overlock and Scott, Drs. Fraser-Liggett,Fraser, Mahmoud and Sommer, and Ms. Minehan)Sommer) and charitable contributions (in the cases of Messrs. Jones, and Overlock and Dr. Sommer). These transactions also included an established relationship between BD and CIGNA Corporation and affiliated companies (collectively, “CIGNA”), as a result of Mr. Scott’s joining CIGNA as President, U.S. Commercial, effective June 28, 2010. CIGNA is one of BD’s medical claims administrators under BD’sself-insured medical plan, which involves the administration and processing of medical claims for BD associates. BD pays CIGNA an administrative fee for the use of CIGNA’s networks, claims processing and customer service inquiries for these purposes. CIGNA also acts as the insurer for BD’s Basic and Voluntary Accident Programs and Business Travel Accident insurance program for BD associates, for which BD pays to CIGNA the premiums for BD associates’ basic insurance coverage. The Board also considered the fact that Ms. Minehan’s husband is a Managing Director at The Goldman Sachs Group, Inc., a financial services company which, together with affiliated entities (collectively “Goldman Sachs”), has provided investment banking and certain financial services to BD predating Ms. Minehan’s election to the Board. Ms. Minehan’s husband has played no role at any time in Goldman Sach’s dealings with BD. BD paid Goldman Sachs approximately $6.2 million for all such services during fiscal year 2010, which represented a small fraction of one percent (.01%) of Goldman Sachs’ consolidated gross revenues during its most recent fiscal year. This figure is well below the bright-line quantitative test applied in determining director independence described above. Accordingly, the Board concluded that BD’s relationship with Goldman Sachs was not a material relationship that would impede the exercise of independent judgment by Ms. Minehan.wherein which a director, executive officer or shareholder owning moreinterest, regardless of whether the transaction impacts a director’s independence.interest. The Policy is available on BD’s website atwww.bd.com/investors/corporate_governance/. The Policy excludes certain specified transactions, including certain charitable contributions, transactions available to employeesassociates generally, and indemnification and advancement of certain expenses. The Corporate Governance and Nominating Committee is responsible for the review and approval or ratification of transactions subject to the Policy. The Corporate Governance and Nominating Committee will approve or ratify only those transactions that it determines in its business judgment are fair and reasonable to BD and in (or not inconsistent with) the best interests of BD and its stockholders,shareholders, and that do not impact the director’s independence when relevant.independence.also engaged one shareholder (or its affiliated operating units) holdingpaid affiliates of State Street Corporation (“State Street”), a holder of more than 5% or more of BD common stock, during fiscal year 2010 for various financial services for which BD paid fees in excess of $120,000. BD paid to State Street Bank and Trust Company, Trustee (“State Street”), $621,500$870,000 for banking services and investment management of various Savings Incentive Plan401(k) funds. These transactions arewere not required to be approved under the Policy, since State Street is considered a passive investor in BD.22
Code of ConductBusiness Conduct and Compliance GuideBD maintains a BusinessCode of Conduct and Compliance Guide (the “Guide”“Code”), which was adopted by the Board in 1995. The Guide that is a code of conduct and ethics applicable to all directors, officers and employeesassociates of BD, including its Chief Executive Officer, and its Chief Financial Officer, principal accounting officer and other senior financial officers. It sets forth BD’s policies and expectations on a number of topics, including conflicts of interest, confidentiality, compliance with laws (including insider trading laws), preservation and use of BD’s assets, and business ethics. The GuideCode also sets forth procedures for the communicating and handling of any potential conflict of interest (or the appearance of any conflict of interest) involving directors or executive officers, and for the confidential communication and handling of issues regarding accounting, internal controls and auditing matters.Since 1995, has also maintainedmaintains an Ethics Help Line telephone number (the “Help Line”) for BD associates as a means of raising concerns or seeking advice. The Help Line is serviced by an independent contractor and is available to all associates worldwide, 7 days a week, 24 hours a day. Translation services are also available to associates.worldwide. Associates using the Help Line may choose to remain anonymous and all inquiries are kept confidential to the extent practicable in connection with investigation of an inquiry. All Help Line inquiries are forwarded to BD’s Chief Ethics and Compliance Officer for investigation. AnyThe Audit Committee is informed of any matters reported to the Chief Ethics and Compliance Officer, whether through the Help Line or otherwise, involving accounting, internal control or auditauditing matters, or any fraud involving management or persons who have a significant role in BD’s internal controls, are reported directly to the Audit Committee.controls.a unit within BD thatwhich administers BD’s Ethicsethics program. In addition to the Help Line, the Ethicsethics program provides for broad communication of BD’s Core Values, associate education regarding the GuideCode and its requirements, and ethics training sessions. BD’s Core Values are:• We do what is right• We always seek to improve• We accept personal responsibility• We treat each other with respectGuideCode for executive officers and directors wouldwill be promptly disclosed to shareholders. In addition, certain amendments to the Guide,Code, as well as any waivers from certain provisions of the Guide relatingCode given to BD’s Chief Executive Officer, Chief Financial Officer or principal accounting officer, wouldwill be posted at the website address set forth below.GuideCode is available on BD’s website atwww.bd.com/investors/corporate_governance/. Printed copies of the GuideCode may be obtained, without charge, by contacting the Corporate Secretary, BD, 1 Becton Drive, Franklin Lakes, New Jersey07417-1880, phone 1-201-847-6800.23REPORT OF THE COMPENSATION AND BENEFITS COMMITTEEand return on capital.capital and other metrics. As such, we intend to ensure a high degree of alignment between pay and the long-term value and financial soundness of BD. The Compensation and Benefits Committee of the Board of Directors (the “Committee”) has established the following compensation principles to meet this objective:• Aligning the interests of executives and shareholders• Through equity compensation and equity ownership guidelines for executives, we seek to align the interests of executives with those of the company’s shareholders. This represents the largest portion of our compensation structure.• Linking rewards to performance• We maintain apay-for-performance philosophy based on actual performance as against clear, measurable company performance targets, particularly those metrics which support the creation of long-term shareholder value.• Delivering superior business and financial results• Performance targets are set to reward executives for achieving outstanding short- and long-term results in line with our objective of enhancing long-term shareholder value. In setting short-term goals and in rewarding performance, we will take care to ensure that we do not create incentives to take inappropriate risks.• Offering a competitive compensation structure• We have established and intend to maintain a competitive structure that supports the recruitment and retention of high-performance executives, essential to driving the business results required to execute our strategy and create long-term value for shareholders. This structure is determined by evaluating peer group data which is provided and analyzed by the Committee’s independent consultant, Pay Governance LLC.• Maintaining a transparent compensation structure• The Committee strives to provide absolute transparency to executives, employees and shareholders of all aspects of BD’s compensation and benefits structure. This includes disclosure of performance targets, payout formulas and details of other earned benefits.• Maintaining Committee independence• The Committee is made up exclusively of independent directors and utilizes an independent compensation consultant, Pay Governance LLC, which, by Committee policy, is prohibited from performing any services for BD or its management without the Committee’s prior approval.• Retaining prerogative to adjust programs• 24The Committee has reviewed and discussed the Compensation Discussion and Analysis with management, and, based on such review and discussions, has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in BD’s Annual Report onForm 10-K for the year ended September 30, 20102012 and in this proxy statement.25COMPENSATION DISCUSSION AND ANALYSIS37.39. We sometimes refer to these individuals as the “named executive officers” or “NEOs.” Mr. Elkins, who served as BD’s Executive Vice President and Chief Financial Officer during fiscal year 2012, resigned from BD effective November 9, 2012.superiorlong-term shareholder returns, and that a competitive compensation plan is critical to that end. Therefore, we intend to provide a competitive compensation package to our executives tiethat ties a significant portion of pay to performance and utilizeutilizes components that best align the interests of our executives with those of BD’s shareholders.• The key elements of our program are salary, annual cash incentives under our Performance Incentive Plan (“PIP”) and long-term equity compensation consisting of stock-settled stock appreciation rights (“SARs”) and Performance Units.• We emphasizepay-for-performance in order to align executive compensation with our business strategy and the creation of long-term shareholder value.• While we emphasize “at risk” pay tied to performance, we believe our program does not encourage excessive risk taking by management.• Our executives are subject to share ownership guidelines and are prohibited from hedging against the economic risk of such ownership.• We offer our executives very limited perquisites, and none of them have employment agreements.• in the event of a restatement of our financial statements due to misconduct.• We have change of control agreements with our executives to provide continuity of management in the event of a change of control of BD.Changes made in 2010the event of a restatement of our financial statements due to misconduct.compensation programAtexecutives to provide continuity of management in the beginningevent of 2010,a change of control of BD.reviewed our compensation programdid not provide any other services to BD or BD management in light of the economic climate and our company-wide cost control efforts. The Compensation Committee also considered ways to increase the link between pay and performance. In conducting its review, the Compensation Committee was mindful of the need to attract and retain executives to lead BD’s future growth. As a result of this review, the following actions were taken for 2010:Performance Incentive Plan• To emphasize our focus on “top-line” growth, a revenue target with a 25% weighting was added to the existing earnings per share target.• The threshold performance required for the granting of PIP awards was raised from 80% to 90% of target performance.262012.• As part of our cost-cutting efforts, the Compensation Committee decided that meeting target performance for the year would only result in awards at 60% of an executive officer’s target award, subject to the Compensation Committee’s discretion to adjust such amounts.Equity compensation• In order to increase the portion of performance-based compensation paid to our executives, the use of time-vested restricted stock units was discontinued. Equity compensation awards to our executive officers now consist solely of SARs and Performance Units.Overview of 20102012 operating performance and summary ofexecutive compensation actionsIn 2010, a challenging economic climate. Reduced hospital visitsdifficult macroeconomic conditions that adversely affected our underlying growth and profitability during the year. These conditionslower diagnostic testingwhich included a 2.7% negative effect from currency translation. Underlying revenue growth was 4.3%.Europehigh-growth areas in emerging markets and other effectsresearch and development spending. To this end, BD launched a number of the global economy resulted in weakened demand for ournew products during the year. In response,year across all three of its business segments, and emerging markets accounted for almost a quarter of BD’s 2012 sales.management team undertook significant cost-control measures, increased productivityefforts to reduce overhead expense through the establishment of shared service centers and took other stepsprojects. These savings allow BD to maintaininvest in higher-growth opportunities, such as emerging markets.profitability during this difficult period. As a resultstrategy to supplement internal growth with growth from strategic acquisitions.these efforts, we reported a 5.5% increase in revenues, and an increase in adjusted earnings per share that exceeded our initial guidance for the year. BD also generated operating cash flows of $1.7 billion. This strong cash flow allowedDiscovery Labware business, which allows us to invest $431 million (or approximately 6% of revenues)focus our resources on the growth drivers for our BD Biosciences segment. This sale was completed in research and development and $537 million in capital expenditures to support future growth. At the same time, weOctober 2012.$1.1$1.9 billion to our shareholders through dividends and share repurchases, an increaserepurchases. BD has increased its dividend for 40 consecutive years.26% from the prior year.Despite BD’s strong performanceEPS target for the year total cash compensation paid to BD’s executives was lower than in 2009. Given the uncertain business environment we faced going into 2010, and based on management’s recommendation, the Compensation Committee froze the salaries of our executives at calendar year 2009 levels. Also, due to the changes tounder the PIP, putwhich resulted in placeavailable funding for 2010 discussed above, PIP awards at 97% of target. The PIP awards made to our named executive officers, as a percentage of their target awards, were significantly lower thangenerally in 2009, despite BD’s having exceeded target performance for the year.line with this funding factor. In addition, the lower revenue growth BD experienced during the 2010-2012 fiscal years relative to the Performance Unit targets for that period resulted in 2010 contributed to a below-targetthere being no payout of the Performance Units covering the2008-2010 2010-2012 performance cycle. These Performance Units paid out at 44%cycle, continuing a trend over the last four performance cycles of the share target.below-target payouts for these awards. Consistent with our past practice, performance-based equity compensation represented a significant component of compensation in 2010. Equity2012. The increase in the equity compensation award values for our executives increased compared to 2009, primarilyMr. Forlenza from 2011 was due to adjustments madehis election as Chief Executive Officer at the beginning of the fiscal year. The other increases in equity compensation paid to NEOs were based on performance, increased responsibilities assumed during the year and/or to align award values with those of peer companies.market practices.rewarding the achievementtying a significant portion of pay to financial and other goals that support long-term shareholder value.12-13.11-12. In order to maintain the independence of its outside consultant, the Compensation Committee has established a policy that prohibits its consultant from performing any services for BD or BD’s management27without the Compensation Committee’s prior approval. In accordance with this policy, BDPay Governance did not engage Pay Governance to perform services for BD or its management in 2010.2012.for 2012 were:are: Abbott LaboratoriesHospira, Inc.Agilent Technologies, Inc. Alcon, Inc. Allergan, Inc. C.R. Bard, Inc. Baxter International Inc. Beckman Coulter, Inc. Boston Scientific CorporationCovidien plc Compensation data from only usedgathered when reviewing the compensation of Messrs. Kozy and Cohen. Compensation data from these three companies was not considered by the Compensation Committee when reviewing the compensation of Messrs. Forlenza, KozyElkins and Cohen. These three companies are not considered when reviewingSherman.compensation of Messrs. Ludwig and Elkins.Comparison Group: Revenue (in millions) for
the twelve months ended
September 30, 2012 Market Capitalization
on September 30, 2012
(in millions) $ 4,998 $ 10,293 $ 7,276 $ 21,176 $ 13,269 $ 30,754 $ 7,708 $ 15,677 52nd 45th Comparison Group. To do this, thecompanies listed above, and uses market comparison data regarding these companies as a guide. The Compensation Committee seeks to estimateestimates the median salary, annual cash incentive and long-term equity compensation and(and the combined total of these elements,elements) of persons holding the same or similar positions at the Comparison Group companies listed above, based on available information.the most recent market data available. The Compensation Committee then generally seeks to targetset the compensation of our executive officers for each of these elements within a competitive range of the median, assuming payout of performance-based compensation at target. The Compensation Committee considers targeted compensation to be in a competitive range if it is within 15% of the median of the Comparison Group. This range is a guideline, and the Compensation Committee retains the flexibility to set target compensation outside the range for an individual or for a specific element of compensation when the Compensation Committee deems it appropriate. An executive’s actual compensation may vary from the target amount set by the Compensation Committee based on the individual’s and BD’s performance and changes in our stock price.Setting compensation targets based on The use of market comparison data, however, is intendedjust one of the tools the Compensation Committee uses to ensuredetermine executive compensation, and the Compensation Committee retains the flexibility to set target compensation at levels it deems appropriate for an individual or for a specific element of compensation. The Compensation Committee believes that ourthe target compensation practices remain competitive. set for the named executive officers in 2012 was competitive with median levels, except that Mr. Forlenza’s salary and equity compensation were set towards the lower end of the range for CEOs at the Comparison Group companies used for comparison purposes, due to the fact that he was new to the position in 2012. is reviewed individually, compensation decisions made with respect to one element of compensation generally do not affect decisions made with respect to other elements. It is also for this reason that no specific formula is used to determine the allocation between cash and equity compensation, although it is the Compensation Committee’s intent that equity compensation represent the largest percentage in terms of overalltarget value of total target compensation. In addition, because an executive’s compensation target is set by reference to persons with similar duties at the Comparison Group companies, the Compensation Committee does not establish any fixed relationship between the compensation of our Chief Executive Officer (“CEO”)CEO and that of the other named executive officers.Annually, the28Our emphasis onpay-for-performanceWeexecutives. However, our emphasis onpay-for-performance resulted in performance-based compensation (which we define asnamed executive officers. (We view PIP awards, Performance Units and SARs) being a significant partSARs as performance-based pay for this purpose.) In 2012, 73% of executive compensation in 2010, representing 87% of totalMr. Forlenza’s target compensation of our CEO and an average of 78% for our68% of the target compensation of the other named executive officers as shown in the charts below. This compares to 70% for our CEOwas performance-based and 62% for our other named executive officers in 2009 (excluding Mr. Elkins, who only joined BD in 2009).not guaranteed.20102012 Total Target Compensation
• awards.Awards. We do not overweight short-term incentives.incentives as a proportion of total pay. PIP awards are also capped at 200% of an executive’s target award to protect against disproportionately large short-term incentives, and the Compensation Committee has broad discretion in determiningto lower PIP awards based on such factors it deems appropriate, including whether management has taken unnecessary or excessive risk. • • percentageportion of total target compensation is long-term equity compensation that vests over a period of years, which encourages our executives to focus on sustaining BD’s long-term performance. • About half anA significant portion of each executive’s equity compensation consists of Performance Units that have a three-year performance cycle, which focuses management on sustaining BD’s long-term performance. We also cap the payout of these awards at 200% of target. • Retention requirement for SARs. The value of SARs is based on BD’s stock price over time. While this could encourage executives to take risks intended to result in short-term increases in our stock price, we mitigate this risk by requiring all of our executive officers to hold 75% of the net, after-tax shares received upon exercise for one year (even if they are already in compliance with our share ownership guidelines). This risk is further mitigated by including Performance Units as a part of equity compensation and by our share ownership requirements. • (earnings per share,(including EPS, revenue growth and return on invested capital)ROIC) that we believe correlate to long-term shareholder value and that are affected by management decisions.29The Key Elements of Our Compensation Program ComponentDescriptionPurpose Fixed cash compensation that is set based on performance, scope of responsibilities, experience, and competitive pay practices. Provide a fixed, baseline level of compensation. award Cash payment tied to performance during the fiscal year. Reward executives for BD’s achieving or exceeding annual performance objectivesfor the year and individual contributions to BD’ssuch performance. •Ÿ Stock appreciation rights Right to receive upon exercise, shares equal in value to the difference between exercise price and current BD stock price.
)
)
)
)
Increase executive ownership, promote executive retention, align compensation with the achievement of long-term performance objectives and reward the creation of shareholder value.•Ÿ Performance Units Performance-based restricted stock units tied to BD’s performance over three-year performance period. Restricted stock units that vest three years after grant. provides abelieves this mix of salary, annual cash incentive and equity compensation awards to offeroffers a competitive compensation package.package to our executives. This structure also promotes ourpay-for-performance philosophy by linking pay levels to both our short-termnear-term performance (through PIP awards) and long-term performance (through Performance Units and SARs)equity compensation). A significant portion of compensation is also provided through equity compensation awards, which align the interests of the executives with our shareholders, promote executive retention and reward the creation of shareholder value. incentive award for BD’s performance for the fiscal year and their contribution to that performance, as part of our pay-for-performance philosophy.pay-for-performance philosophy.Target awards. Target PIP awards for the named executive officers for 2010 are expressed as a percentage of base salary as follows:Target AwardName and Positionas % of SalaryEdward J. Ludwig120%Chairman and Chief Executive OfficerDavid V. Elkins70%Executive Vice President and Chief Financial OfficerVincent A. Forlenza85%President and Chief Operating OfficerWilliam A. Kozy70%Executive Vice PresidentGary M. Cohen70%Executive Vice PresidentBased on available data,earned during the 2010 target awards for our named executive officers were within the competitive range targeted by the Compensation Committee.year. The “Grants of Plan-Based Awards in Fiscal Year 2010”2012” table on page 3941 shows the range of possible awards under the PIP.30Executive officers are eligible to receive PIP, awards only if BD first meets a baseline net income target established by the Compensation Committee. Achievement of this baseline performance target results in an allocation of the maximum PIP award that may be paid to a named executive officer (200% of target). The Compensation Committee has the discretion (and has always exercised this discretion) to reduce the amount of the award based on such factors as the Compensation Committee deems appropriate.certain assumptions.relating toset for the businesses or functions they oversee. In each case, the performance objectives for a named executive officer involve a combination of quantitative and qualitative goals. However, no specific formula or weighting of individual performance objectives is used to determine a named executive officer’s PIP award, nor is the achievement of any particular individual performance objective a condition to receiving an award. Instead, the Compensation Committee uses its business judgment to determine the appropriate PIP award to recognize BD’s performance and the executive’s contribution.Targets.targets. FundingAvailable funding for PIP awards is determined by a formula tied tobased on how BD performs during the year against the performance targets set by the Compensation Committee. Historically, we have used diluted earnings per share from continuing operations (“EPS”) as theFor 2012, these included EPS and revenue targets, with EPS performance measure for the PIP. In 2010, the Compensation Committee added a revenue growth target as well. The EPS target is weighted 75% and the revenue growth target isperformance weighted 25%. The EPS and revenue targets arewere based on BD’s business plan for the fiscal year. Revenue growth isRevenues for the year are measured after eliminating the estimated effects of foreign currency translation so that only improvement inBD’s underlying performance is considered. In reviewing BD’s operating results against the performance targets, the Compensation Committee has the discretion to adjust BD’s results to account for acquisitions and divestitures, and items that are not considered part of our ordinary operations. This ensures that management makes decisions based on the best interests of BD, rather than the possible effects on its compensation. This discretion is also used to make sure our executives are not unfairly penalized by, or benefitted from, these types of events.Werevenue growth.revenues. The revenue growth target was added to increase management’s focus on achieving strong “top-line” growth, consistent with our business strategy. We believe that consistent EPS and revenue growth will result in the creation of long-term shareholder value. We also use these targets because they are clear, measurable and easy for our associates to understand.In 2010,also raisedmeasures how BD performed against the thresholdtarget goal to arrive at a funding factor. For every 1% of performance requiredabove target for one of the granting of PIP awards from 80% tomeasures, funding increased 5%, and for every 1% below target, funding decreased 2.5%. Performance below 90% of target performance. This change was madewould have resulted in no funding for that particular performance measure. The performance factors for both measures are then weighted, as described above, to further emphasize the link between pay and performance. The Compensation Committee does not believe that this is an unreasonably high threshold. As part of our cost control measures, the Compensation Committee also decided that, for 2010, meeting target performance will only result in awardsarrive at 60% of an executive officer’s target, subject toa final funding amount. In the Compensation Committee’s discretion, actual awards, as a percentage of a named executive officer’s target, may be more or less than the overall funding factor.the awardsBD’s results to account for acquisitions and divestitures, and for items that are not considered part of our ordinary operations. This ensures that management makes decisions based on individual performance.the best interests of BD, rather than the possible effects on compensation. This discretion is also used to make sure our executives are not unfairly penalized or benefitted by these types of events.Long-Term Equity CompensationLong-term equity compensation20102012 consisted of SARs, Performance Units and Performance Units.TVUs. A description of each type of award is on page 40. In 2009,42. TVUs were added in 2012 to reduce the volatility in amounts realized from equity compensation that can arise when purely performance-based equity compensation is used. The Compensation Committee uses this mix of equity vehicles to promote the objectives of our program. SARs are intended to reward the executives for the creation of shareholder value over the term of the award. Performance Units are intended to reward the named executive officers received time-vested restrictedfor sustained long-term performance, regardless of movements in our stock units, or “Time-Vested Units,” in addition to Performance Unitsprice. All three types of awards align the interests of our executives with our shareholders and SARs. In 2010, the Compensation Committee discontinued the use of Time-Vested Units for ourhelp promote executive officers and other members of senior management. This change to purely performance-basedretention. compensation was made to increase the link between executive compensation and long-term performance.How awards are determined. The Compensation Committee determines the grant date dollar value of the award to be made to each named executive officer based on market compensation comparison data and individual performance,performance. SARs, Performance Unit and TVU awards are then made, with SARs and Performance Units each making up approximately half40% of suchthe total award value, inand TVUs the remaining 20%. Performance Units and TVUs are valued at grant based on a 20-day average stock price, while SARs are valued using an option valuation model that uses certain assumptions, such as stock volatility, dividend yield and the other half inexpected life of the SARs. The values given to equity compensation awards by the Compensation Committee are only estimates and are not intended to be predictive of the actual value that will be realized from the awards. The amount ultimately realized will based on BD’s performance and our stock price.31Performance Unit targets.The performance measures used for the Performance Units aregranted in 2012 were average annual revenue growth and average return on invested capital (“ROIC”). For the awards made in 2010, revenue growth isannual ROIC, with each weighted 70% and ROIC is weighted 30%50%. In setting revenue growth and ROIC targets, the Compensation Committee considersconsidered BD’s business plan at the time of the grant and what the Compensation Committee believes isbelieved was a reasonable range of performance over the performance period, as well as economic trends in the segments in which we operate. The Compensation Committee’s goal is to set challenging but achievable targets. Despite the effects of the global recession, the Compensation Committee has not revised the performance targets of any prior Performance Unit grants.We useAs we discussed earlier, revenue growth and ROIC were used as a performance metricmetrics because it isthey are directly tied to our long-term growth strategy. For this reason, it is weighted more heavily than ROIC. Revenue growth isAs with the PIP, revenues are measured after eliminating the estimated effect of foreign currency translation so that only improvement in underlying performance is counted. ROIC is used to motivate our executives to maintain BD’s profitability and balance sheet strength. The Compensation Committee believes that sustained performance in revenue growth and ROIC will lead to increasing long-term value for our shareholders.payoutperformance threshold forbothrevenue growth and ROIC). In determining payouts, the Compensation Committee has the discretion to adjust BD’s operating results to account for events that occur during the performance period, similar to its discretion under the PIP.As with PIP awards, the named executive officers are eligible to receive Performance Unit payouts only if BD first meets a baseline net income target set by the Compensation Committee. Meeting this baseline target results in a maximum award payout, subject to the discretion of the Compensation Committee (which has always exercised this discretion) to reduce the amount of the payout based on the revenue and ROIC grid discussed above. For purposes of this proxy statement, when discussing performance measures for Performance Units, we refer to the revenue and ROIC targets.lightconnection with Mr. Forlenza’s election as Chief Executive Officer, his salary was increased from $750,000 to $900,000, effective October 1, 2011. Mr. Kozy received an approximate 11% increase in salary to account for additional duties he assumed in his role as Executive Vice President, including oversight of economic conditions and based on management’s recommendation, our three business segments. Mr. Kozy received the additional title of Chief Operating Officer in November 2012. The salary increases of the other named executive officers did not receive anywere in-line with salary increase for calendar year 2010. Based on available data, the 2010 salaries for our named executive officers, other than Mr. Forlenza, were within the competitive range targeted by the Compensation Committee. Mr. Forlenza’s salary was slightly above the competitive range, in recognition of the additional duties Mr. Forlenza has assumed beyond his role as President (which ultimately led to the Board adding Chief Operating Officer to his title in July 2010).increases at BD generally.Our2010 compared to the2012, along with BD’s performance targets was as follows: Adjusted Percentage Target Performance Achieved EPS (75% weighting) $4 .83 $4 .96 102.7% Currency-neutral revenue growth (25% weighting) 5 .7% 5 .6% 99.7% Both the EPS and revenue targets were adjusted for divestitures during the year. year (adjusted as described below), were as follows: Minimum
Performance Target
Performance Maximum
Performance BD’s
Adjusted
Performance Percentage of
Target
Achieved $ 4.97 $ 5.52 $ 6.07 $ 5.41 98.0 % $ 7,025 $ 7,806 $ 8,587 $ 7,822 100.2 % * Amounts in millions. $4.90.$5.30. In reviewing BD’s results,EPS performance against the performance target, the Compensation Committee exercisedused its discretion to adjust EPSeliminate the $0.04 per share dilution from our Kiestra and Sirigen acquisitions (which were not budgeted for the year) and the $0.06 per share charge weBD took as a result of provisionsduring the year relating to pension settlements, since it did not relate to BD’s underlying performance. This resulted in the recently-enacted federal healthcare reform law. The Compensation Committee adjusted for this charge because it resulted purely from a change in existing law and was not related to our ordinary operations. The Compensation Committee also adjusted EPS of $5.41 (adjusted for rounding). Revenues from those acquisitions were also excluded from the revenues for the one-time gain recognized in connection with a divestiture and for certain tax benefits originally budgeted to be realized in 2010, but which are now expected to be realized in 2011 and are factored intoyear. Under the EPS target for the 2011 PIP awards.32Based onfunding formula, this performance BD achieved 102% of target performance for the year, which ordinarily would resultresulted in PIP funding for 110% of target awards. However, as discussed earlier, the Compensation Committee decided that, for 2010, target performance would result in awards at 60%97% of an executive officer’s target, subject to the Compensation Committee’s discretion to adjust the awards. After its review of BD’s performance and that of the named executive officers, the Compensation Committee increased the awards for the named executive officers above the 60% level for the reasons discussed below. However, each executive still received less than his target award.target.2010.2012. These awards are also set forth in the Summary Compensation Table on page 3739 under the heading “Non-Equity Incentive Plan Compensation.” Target Incentive Actual Incentive Name Award Award Edward J. Ludwig $ 1,284,000 $ 850,000 David V. Elkins 350,000 325,000 Vincent A. Forlenza 552,500 510,000 William A. Kozy 402,500 372,000 Gary M. Cohen 399,000 319,000 Target Incentive
Award Actual Incentive
Award $ 1,080,000 $ 1,080,000 618,750 599,900 707,575 724,500 481,020 250,000 437,625 444,300 reflect whatas a percentage of their target awards, were generally in-line with the Compensation Committee believes was superior performance duringPIP funding factor, and where they did exceed the yearfactor, did not do so by BD’s management team.more than 5%. In making these awards, the Compensation Committee considered that, through management’s efforts, BD was ablea number of factors, including individual contributions to achieve its revenue and earnings goalsBD’s performance for the year despiteyear. Despite the continuing industry challenges in the global economy. Importantly,medical device industry, BD was able to achieve these results without sacrificing ourexceeded its revenue goal and substantially met its EPS goal under the PIP, while still maintaining its level of investment in research and development and emerging markets. BD’s performance also reflected management’s continued progress on growth opportunities. In addition, the Compensation Committee noted significant progressinitiatives intended to position BD for long-term success, including a number of new product launches during the year and expanding our presence in emerging markets. In addition, BD executed on projectsits strategy to supplement internal growth with strategic acquisitions by completing the Kiestra and initiatives that are important to BD’s future growth. These include further developmentSirigen transactions. Management also completed the initial rollout of BD’s business strategy, including ago-to-market strategy in China and other emerging markets, initiatives to improve product innovation, a review of BD’s global cost structure and other operating effectiveness projects, the upgrade of our enterprise resource planning system upgrade and effortstook other steps toward improving operating efficiency, including the opening of new shared service centers to strengthen BD’s international distribution management and ensure compliance with BD’s ethical standards by distributors and agents.reduce overhead expense.reflectedshown on page 39.41. The increase in equity compensation for Mr. Forlenza compared to 2011 was in connection with his election as BD’s Chief Executive Officer at the beginning of 2012. The other changes in equity-based compensation paid to NEOs were based on performance and to align award values over the prior year for Messrs. Ludwig, Forlenza, Kozywith market practices, and, Cohen is attributable in part to adjustments in target award values the Compensation Committee made after considering compensation data relating to the Comparison Group and determining that the previous award values were below the competitive range. The increase is also due in part to a change in the Compensation Committee’s methodology in valuing the awards. Because of the sharp decline in the stock market at the time, the Compensation Committee used an assumed BD stock price to value the 2009 grants that was significantly higher than the BD stock price on the date of grant, resulting in fewer SARs and units being granted. For the 2010 grants, the Compensation Committee used the average BD closing price for the 20 trading days prior to the grant to value the awards, which more closely approximated the value of BD stock on the grant date.Based on available data, the equity compensation awards for Messrs. Ludwig, Kozy and Cohen were within the competitive range targeted by the Compensation Committee. The Compensation Committee set the valuecase of Mr. Forlenza’s award above the competitive range,Kozy, to reflect an increase in recognition of the additional duties Mr. Forlenza has assumed, as discussed above. The award made to Mr. Elkins was below the competitive range for chief financial officers. The Compensation Committee set Mr. Elkins’ award value at this level since he was new to his role when the grant was made. The Compensation Committee subsequently reset Mr. Elkins’ target award value to more closely approximate the median of the Comparison Group.responsibilities.2010-2012 2012-2014 performance period,period. The target revenue growth for these awards is 4.3% and havetarget ROIC is 24%. The Compensation Committee believes the minimum performance thresholds, target performance and maximum payout thresholds set forth below. Minimum Performance Target Maximum Payout Performance Measure Threshold Performance Threshold Currency-neutral revenue growth 4 % 7 % 11 % ROIC 28 % 32 % 35 % 33 A more complete description of the deferred compensation provisions of the plan begins on page 47.The revenue growth target for the 2010 grant is lower than the target for the previous year’s grant, while the ROIC target is higher. The Compensation Committee set this revenue target after considering the prevailing economic conditions and the growth trends in the segments in which we operate. The Compensation Committee believes this revenue target is higher than the average expected revenue growth of the Comparison Group companies over the period covered by the award, andthese awards represents a challenging goal for management given the economic climate BD continues to operate in and its expected effectimpact on BD’s near-termoperating results.2007-20092009-2011 performance period2009,2011, Performance Units covering the2007-2009 performance period vested. These awards had performance targets of 9% currency-neutral revenue growth and 30% ROIC. Our adjusted revenue growth and ROIC over the performance period were 6.1% and 31.7%, respectively, resulting in a payout of 77% of the share target. See the “Option Exercises and Stock Vested in Fiscal Year 2010” table on page 43.In determining the payout, the Compensation Committee used its discretion to adjust BD’s revenue growth and ROIC to take into account acquisitions and divestitures. The Compensation Committee also adjusted ROIC for the period to eliminate the effects of non-cash charges incurred in connection with acquisitions and the charge relating to the pending settlement of certain antitrust cases. It was determined that these actions were in the best interests of BD, and the Compensation Committee did not believe it was appropriate for the Performance Unit payouts to be reduced as a result. Based on these adjustments, the share payout of the awards was adjusted upward from 74% to 77% of the share target.2008-2010 performance periodIn November 2010, Performance Units covering the2008-2010 2009-2011 performance period vested. These awards had performance targets of 8.5% currency-neutral revenue growth and 31% ROIC. Our adjusted revenue growth and ROIC over the performance period were 5.8%4.5% and 30.8%29%, respectively. This resulted in a payout of these awards at 44%20% of the share target. In determining the payout, the Compensation Committee used its discretion to adjustto take into account acquisitionshas been reflected in Performance Unit payouts over this period, with the last four payouts being 77%, 44% and divestitures. ROIC was also adjusted20% of target for the charge relating2007-2009, 2008-2010 and 2009-2011 performance cycles, respectively, and no payout for 2010-2012. We believe BD’s revenue growth over this time reflects slower growth in the medical technology industry generally as a result of these macroeconomic conditions, rather than weaker growth of BD relative to industry trends. However, we believe these payouts demonstrate a high degree of alignment between pay and BD’s performance against the litigation settlement mentioned above. However,preset targets, as shown in the table below. Revenue
Growth ROIC Performance
Unit Payout 6.1 % 31.7 % 77 % 5.8 % 30.8 % 44 % 4.5 % 29.0 % 20 % 3.9 % 27.2 % 0 % adjustments did not affectawards and the final share payout ofamounts actually realized by the awards.named executive officers, as shown below for the last three payouts. 2008-2010 Grant 2009-2011 Grant 2010-2012 Grant Grant Date
Value Realized
Value Grant Date
Value Realized
Value Grant Date
Value Realized
Value $ 472,248 $ 202,150 $ 679,000 $ 163,980 $ 1,064,038 $ 0 N/A N/A N/A N/A 638,393 0 472,248 202,150 470,188 113,563 782,014 0 472,248 202,150 470,188 113,563 782,014 0 321,972 137,855 322,500 77,865 505,435 0 The Compensation Committee encourages LudwigForlenza is encouraged to use BD aircraft for his personal and business travel in order to make more efficient use of his travel time, enhance hisfor personal security and to reduce business continuity risk. BD and Mr. Ludwig haveForlenza entered into a time-sharing arrangement with BD under which Mr. Ludwighe makes payments to BD for his personal use of BD aircraft. For 2010, Mr. Ludwig paidForlenza did not take any personal flights on BD $236,028aircraft in time-share payments. These payments covered all of the incremental costs relating to Mr. Ludwig’s personal flights. Additional information on the time-sharing arrangement is set forth in the notes to the Summary Compensation Table on page 38.2012.The table on page 46 shows activity in the deferral accounts of the named executive officers during 2010. We do not provide any guaranteed earnings on amounts deferred by the named executive officers. Earnings on these accounts are based on their individual investment elections. BD provides matching contributions on cash amounts deferred under the plan, subject to certain limits.34Pension benefitsnon-qualifiednonqualified Deferred Compensation and Retirement Benefit Restoration Plan. Together, these plans are designed to provide a market-competitive level of income replacement for our retirement-eligible associates, reduce associate turnover and contribute towards providing a competitive compensation package. A more complete description of our pension benefits begins on page 43. The named executive officers participate in these plans on the same basis as all eligible associates. We do not include the value of equity compensation in calculating pension benefits. A more complete description of our pension benefits begins on page 45.an agreemententered into agreements with eachour named executive officerofficers relating to histheir employment following a change of control. This agreement provides the executive with continued employment for a period of two years following a change of control of BD. It alsoBD, and provides certain benefits to the executive in the event his employment is terminated without cause or he leaves his employment for “good reason” (also known as a constructive termination), during this period. Generally, these benefits include a severance payment equal to a multiple of the executive’s salary and PIP award, and certain other benefits. A more complete description of the terms and potential payouts of our change of control agreements begins on page 47.50.threatenedpotential change of control of BD. These change of control benefits are reviewed fromtime-to-time by the Compensation Committee to ensure that they are consistent with our compensation objectives and market practices. Based on information provided by Pay Governance, change of control arrangements are used by a substantial majority of the companies in the Comparison Group, and the terms of our agreements, including the severance multiple, are consistent with the prevailing practices at those companies. The Compensation Committee believes the benefits provided under these agreements are appropriate and are consistent with our objective of attracting and retaining highly-qualifiedhighly qualified executives.In setting the potential payments under these agreements, the Compensation Committee does not consider the wealth accumulated by the named executive officers under prior compensation awards or our benefit plans, because the Compensation Committee believes these agreements are important in protecting shareholder interests in the event of an actual or threatened change of control. In addition, while salary and PIP decisions affect the potential payouts under these agreements, this did not affect the Compensation Committee’s decision-making. The Compensation Committee does not believe it is appropriate to base salary and PIP decisions on the potential effect they may have under change of control agreements that may never be triggered.executive.executive following a change of control.“Gross-up”Tax reimbursement payments. In certain instances, payments made to a named executive officer on account of his termination may be subject to a 20% excise tax. To offset the effect of the excise tax, we will make a“gross-up” payment toreimburse the named executive officer to reimburse him for the excise tax. We provide for these payments because they allow an executive to recognize the full intended economic benefit of his agreement and eliminate unintended disparities between executives that the excise tax can arbitrarily impose, owing to the particular structure of this tax However, while we believe these tax reimbursement provisions serve a valid purpose, in light of trends in executive compensation practices, any new change of control agreements that we enter into with our executive officers will not contain these provisions. Based on information provided by Pay Governance, the Compensation Committee believes that these accelerated vesting provisions are consistent with market practices.35Significant Policies and Additional Information Regarding Executive CompensationThe Board of Directors has adoptedsuch member’sthat person’s misconduct. The Board also has the discretion to cancel any equity compensation awards (or recover payouts under such awards) that were granted to such person with respect to the restated period, and require the person to reimburse BD for any profits realized on any sale of BD stock occurring after the public issuance of the financial statements that were subsequently restated. The BD Leadership Team consists of 5357 members of senior management, and includes the named executive officers. 5 times salary President5 times salary(8 persons)(9 persons, including the NEOs other than the Chief Executive Officer) 3 times salary 1 times salary Each of the named executive officers hasMessrs. Forlenza, Kozy, Cohen and Sherman each have holdings in excess of his ownership requirement, other than Mr. Elkins, who joined BD in December 2008.requirement. We have a policy that prohibits our associates from pledging BD shares or engaging in options, puts, calls or other transactions that are intended to hedge against the economic risk of owning BD shares.awardsaward grantsgrant,compensation award and requires our annual equity compensation awards and any “off-cycle” awards approved by our CEO to be made on fixed dates. The policy also prohibits manipulating the timing of either the public release of information or the grant of an award in order to increase the value of the award. Under the policy, the exercise price of any stock option or SAR award will be the closing price of BD stock on the grant date.officer (other than our Chief Financial Officer).officer. This limitation does not apply, however, to “performance-based” compensation, which includes SARs, stock options, Performance Units and PIP awards. Salary does not constitute “performance-based” compensation and is subject to the limitations of Section 162(m).compensation. While the Compensation Committee generally attempts to preserve the deductibility of compensation paid to the named executive officers, the Compensation Committee believes the primary purpose of our compensation program is to support BD’s business strategy and the long-term interests of our shareholders. Therefore, the Compensation Committee maintains the flexibility to award compensation that may be subject to the limits of Section 162(m) if doing so furthers the objectives of our executive compensation program.3648.COMPENSATION OF NAMED EXECUTIVE OFFICERS20102012 SUMMARY COMPENSATION TABLE Change in Pension Value and Nonqualified Non-Equity Deferred All Name and Stock Option Incentive Plan Compensation Other Principal Position Year Salary(1) Bonus Awards(2) Awards(2) Compensation(3) Earnings(4) Compensation(5) Total Edward J. Ludwig 2010 $ 1,070,000 0 2,926,049 2,965,638 850,000 $ 2,158,930 $ 34,405 $ 10,005,022 Chairman and Chief 2009 1,070,000 0 2,928,188 1,599,932 1,500,000 2,918,894 33,055 10,050,069 Executive Officer 2008 1,059,846 0 3,151,328 1,869,723 1,526,179 0 14,280 7,621,356 David V. Elkins 2010 500,000 $ 250,000 (6) 638,393 647,047 325,000 36,394 52,145 2,448,979 Executive Vice 2009 413,462 220,000 (7) 327,829 0 350,000 13,697 78,381 1,403,369 President and Chief Financial Officer Vincent A. Forlenza 2010 650,000 0 1,064,038 1,078,417 510,000 1,019,476 36,352 4,358,283 President and Chief 2009 622,538 0 1,018,500 556,504 625,000 1,108,180 36,202 3,966,924 Operating Officer 2008 538,654 0 762,596 452,472 625,000 0 39,587 2,418,309 William A. Kozy 2010 575,000 0 782,014 792,630 372,000 993,335 41,657 3,556,636 Executive Vice 2009 567,154 0 705,313 385,383 470,000 1,213,906 35,446 3,377,202 President 2008 538,654 0 762,596 452,472 470,000 0 14,040 2,237,762 Gary M. Cohen 2010 570,000 0 782,014 792,630 319,000 586,216 34,022 3,083,882 Executive Vice 2009 564,769 0 705,313 385,383 450,000 734,407 31,982 2,871,854 President 2008 545,685 0 762,596 452,472 440,000 0 10,674 2,211,427
Principal Position Year Salary(1) Bonus Stock
Awards(2) Option
Awards(2) Non-Equity
Incentive Plan
Compensation(3) Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings(4) All
Other
Compensation(5) Total 2012 $ 900,000 0 $ 3,441,639 $ 2,292,422 $ 1,080,000 $ 1,662,465 $ 41,750 $ 9,418,276 2011 725,000 0 1,393,622 1,434,250 723,077 709,038 33,867 5,018,854 2010 650,000 0 1,064,038 1,078,417 510,000 1,019,476 36,352 4,358,283 2012 618,750 0 1,200,221 799,461 599,900 49,307 35,175 3,302,814 2011 575,000 0 846,106 870,794 550,000 42,863 70,693 2,955,456 2010 500,000 $ 250,000 (7) 638,393 647,047 325,000 36,394 52,145 2,448,979 2012 643,250 0 1,369,703 912,346 724,500 1,116,174 44,622 4,810,595 2011 588,500 0 846,106 870,794 500,000 575,624 33,701 3,414,725 2010 575,000 0 782,014 792,630 372,000 993,335 41,657 3,556,636 2012 601,275 0 899,409 599,114 250,000 1,300,415 43,556 3,693,769 2011 583,500 0 846,106 870,794 470,000 356,996 33,696 3,161,092 2010 570,000 0 782,014 792,630 319,000 586,216 34,022 3,083,882 2012 486,250 0 839,910 559,430 444,300 116,370 34,300 2,480,560 (1) Salary. BD’s fiscal year ends September 30. The amounts shown in the “Salary” column reflect three months of salary at one calendar year rate and nine months at the following calendar year rate. Mr. Forlenza’s salary increased from $750,000 to $900,000, effective October 1, 2011, in connection with his election as our Chief Executive Officer. (2) Stock Awards and Option Awards. The amounts shown in the “Stock Awards” column (which includes performance-based and time-vested restricted stock units) and “Option Awards” column (which includes stock appreciation rights) reflect the grant date fair value of the awards under FASB ASC Topic 718 (disregarding estimated forfeitures). For a description of the methodology and assumptions used by us in arriving atto determine the amounts reflected in these columns, see the notes to the consolidated financial statements contained in our Annual Reports onForm 10-K for the fiscal years ended September 30, 2012, 2011 and 2010, 2009 and 2008, respectively.Amounts included in the “Stock Awards” column for 2010 represent awards of Performance Units, which are performance-based restricted stock units. The amounts shown represent the grant date fair value of these awards at target payout. Below are the grant date fair values of these awards, assuming maximum payout (200% of target): Name Value at maximum payout Edward J. Ludwig $ 5,852,098 David V. Elkins 1,276,786 Vincent A. Forlenza 2,128,076 William A. Kozy 1,564,028 Gary M. Cohen 1,564,028 Amounts shown in the “Stock Awards” column for 2012 include awards of Performance Units, which are performance-based restricted stock units. The amounts included in this column are the grant date fair values of these awards at target payout, which we believe is the most probable outcome based on the applicable performance conditions. Below are the grant date fair values of these awards, assuming maximum payout (200% of target): Value at maximum payout $ 4,588,851 1,600,343 1,826,223 1,199,211 1,119,879 (3) Non-Equity Incentive Plan Compensation. Includes amounts earned under BD’s Performance Incentive Plan. These amounts are paid in January of the fiscal year following the fiscal year in which they are earned, unless deferred at the election of the named executive officer.(4) Change in Pension Value and Nonqualified Deferred Compensation Earnings. A decrease in present value is shown in the above table as “0.” Information regarding the named executive officers’ accumulated benefits under our pension plans at normal retirement age isbegins on page 44.45. BD’s pension plans allow for early retirement without any reduction in benefits if a participant’s combined age and years of service reach a certain amount.46.37(5) All Other Compensation.Amounts shown for fiscal year 20102012 include the following: Edward J. Ludwig David V. Elkins Vincent A. Forlenza William A. Kozy Gary M. Cohen Matching contributions under plans $ 33,075 $ 11,025 $ 33,075 $ 33,075 $ 33,420 Use of corporate transportation 200 — — — — Tax reimbursements — — 2,591 7,975 — Relocation benefits — 41,120 — — — Term life insurance 1,130 — 686 607 602 Total $ 34,405 $ 52,145 $ 36,352 $ 41,657 $ 34,022 Vincent A. Forlenza David V. Elkins William A. Kozy Gary M. Cohen Jeffrey S. Sherman $ 40,800 $ 35,175 $ 38,925 $ 42,916 $ 31,800 — — 5,000 — 2,500 950 — 697 640 — $ 41,750 $ 35,175 $ 44,622 $ 43,556 $ 34,300 • • UseMatching Charitable Gifts—The amounts shown are matching contributions under BD’s Matching Gift Program, under which BD matches up to $5,000 of Corporate Transportation—Pursuantcontributions made by an associate to a policy adopted by the Board of Directors, Mr. Ludwig is encouraged to use BD aircraft for his personal and business travel. The value of Mr. Ludwig’s personal use of BD aircraft is measured by the incremental variable costs incurred by BD in connection with these personal flights that are not reimbursed by Mr. Ludwig. These variable costs include fuel, trip-related maintenance, crew travel expenses, on-board catering, and landing and parking fees. If the aircraft flies empty before picking up or dropping off Mr. Ludwig at a destination, the costs of the empty flight are included in the incremental cost. Since BD aircraft are used predominantly for business purposes, we do not include fixed costs that do not change in amount based on usage, such as depreciation and pilot salaries.qualifying non-profit organizations.BD and Mr. Ludwig have entered into a time-sharing arrangement under which Mr. Ludwig makes time-share payments to BD for his personal use of BD aircraft. The payments are for the maximum amount permitted by Federal Aviation Administration regulations without subjecting BD to regulation as a charter carrier. Mr. Ludwig made total payments of $236,028 under this arrangement for personal flights taken in fiscal year 2010, which covered all of the variable costs incurred by BD in connection with these flights. Accordingly, no value has been attributed to his use of corporate aircraft in the Summary Compensation Table.BD also makes available a driver and BD-leased car to Mr. Ludwig on occasion for commuting to and from work. The incremental costs incurred by BD in connection with this transportation are fuel charges and any other variable costs related to such use. Since BD-leased cars are used predominantly for business purposes, we have not included fixed costs, such as driver salaries, which do not change based on usage.Mr. Ludwig is responsible for the payment of any tax on any income imputed to him as a result of his personal use of corporate transportation. • Tax Reimbursements—Mr. Kozy, a resident of New Jersey, previously spent a portion of his time in California in connection with his oversight of our BD Biosciences segment. As a result, part of the income earned by Mr. Kozy during that time was treated as being earned in California for California state tax purposes. BD reimbursed Mr. Kozy for any incremental state tax liability incurred by him as a result of being subject to California taxation. The same arrangement is in effect for Mr. Forlenza (who also is a resident of New Jersey) with respect to the period that he served as President of BD Biosciences. • Relocation Benefits—In connection with his joining BD, we extended certain relocation benefits to Mr. Elkins. These include a monthly housing allowance and reimbursement for travel and other costs. BD also pays any related taxes that may be payable by Mr. Elkins on his relocation benefits. For fiscal year 2010, tax reimbursements paid to Mr. Elkins in connection with these relocation benefits were $19,020.• (6) Mr. Elkins resigned from BD effective November 9, 2012. (7) Represents amount paid pursuant to Mr. Elkins’ sign-on agreement to compensate him for the forfeiture of equity awards he had received from his former employer. (7)(8)Represents amount paid asMr. Sherman was not a sign-on bonus at the commencement of Mr. Elkins’ employmentnamed executive officer in December 2008.2010 or 2011 and, therefore, his compensation is not disclosed for those years.38INFORMATION REGARDING PLAN AWARDS IN FISCAL YEAR 20102012providedgranted to the named executive officers in fiscal year 2010.2012. The non-equity incentive awards were made under the BD Performance Incentive Plan. The equity awards were made under BD’s 2004 Employee and Director Equity-Based Compensation Plan.20102012 All Other Option Exercise Grant Estimated Possible Payouts Estimated Future Payouts Awards: or Base Date Fair Under Non-Equity Incentive Under Equity Incentive Number of Price of Value of Plan Awards(2) Plan Awards(3) Securities Option Stock and Award Grant Threshold Target Maximum Threshold Target Maximum Underlying Awards Option Name Type(1) Date ($) ($) ($) (#) (#) (#) Options ($/Sh)(4) Awards(5) Edward J. Ludwig PIP N/A $ 642,000 $ 1,284,000 $ 2,568,000 PU 11/24/09 387 38,689 77,378 $ 2,926,049 SAR 11/24/09 150,540 $ 75.63 2,965,638 David V. Elkins PIP N/A 175,000 350,000 700,000 PU 11/24/09 84 8,441 16,882 638,393 SAR 11/24/09 32,845 $ 75.63 647,047 Vincent A. Forlenza PIP N/A 276,250 552,500 1,105,000 PU 11/24/09 141 14,069 28,138 1,064,038 SAR 11/24/09 54,742 $ 75.63 1,078,417 William A. Kozy PIP N/A 201,250 402,500 805,000 PU 11/24/09 103 10,340 20,680 782,014 SAR 11/24/09 40,235 $ 75.63 792,630 Gary M. Cohen PIP N/A 199,500 399,000 798,000 PU 11/24/09 103 10,340 20,680 782,014 SAR 11/24/09 40,235 $ 75.63 792,630 Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards(2) Estimated Future Payouts
Under Equity Incentive
Plan Awards(3) All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#) All Other
Option
Awards:
Number of
Securities
Underlying
Options (#) Exercise
or Base
Price of
Option
Awards
($/Sh)(4) Grant
Date Fair
Value of
Stock and
Option
Awards($)(5) Award
Type(1) Grant Date Threshold
($) Target
($) Maximum
($) Threshold
(#) Target
(#) Maximum
(#) PIP N/A 810,000 1,080,000 2,160,000 TVU 11/22/2011 15,907 1,147,213 PU 11/22/2011 3,181 31,814 63,628 2,294,426 SAR 11/22/2011 181,794 72.12 2,292,422 PIP N/A 464,063 618,750 1,237,500 TVU 11/22/2011 5,547 400,050 PU 11/22/2011 1,110 11,095 22,190 800,171 SAR 11/22/2011 63,399 72.12 799,461 PIP N/A 530,681 707,575 1,415,150 TVU 11/22/2011 6,331 456,592 PU 11/22/2011 1,266 12,661 25,322 913,111 SAR 11/22/2011 72,351 72.12 912,346 PIP N/A 360,765 481,020 962,040 TVU 11/22/2011 4,157 299,803 PU 11/22/2011 831 8,314 16,628 599,606 SAR 11/22/2011 47,511 72.12 599,114 PIP N/A 328,219 437,625 875,250 TVU 11/22/2011 3,882 279,970 PU 11/22/2011 776 7,764 15,528 559,940 SAR 11/22/2011 44,364 72.12 559,430 (1) Award Type: PIP = Performance Incentive PlanPU = Performance UnitSAR = Stock Appreciation Right(2) The amounts shown represent the range of possible dollar payouts that a named executive officer could have been earnedearn under the BD Performance Incentive Plan for fiscal year 2010.2012, based on certain assumptions. Actual payments under the Performance Incentive Plan for fiscal year 20102012 are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 37.39. The amount in the “Threshold” column assumes BD achieved the minimum performance level, requiredresulting in available funding for the grantingawards at 75% of Performance Incentive Plan awards,target, and that the named executive officer received an awarda payment equal to 50%75% of his award target. Because the Compensation Committee has discretion in setting PIP awards, actual awards may be lower than the threshold amount shown. The “maximum” column reflects an award at 200% of target, the maximum award an individual may receive under the plan.(3) The amounts shown represent the range of potential share payouts under Performance Unit awards. The amount in the “Threshold” column shows the number of shares that will be paid out, assuming BD achieves the minimum performance levels required for the payment of shares. The payout amounts shown in the above table do not reflect shares that may be issued pursuant to dividend equivalent rights. (4) The exercise price is the closing price of BD common stock on the date of grant, as reported on the New York Stock Exchange. (5) The amounts shown in this column reflect the grant date fair value of the awards under FASB ASC Topic 718 used by BD for financial statement reporting purposes (disregarding estimated forfeitures). For a discussion of the assumptions made by us in arriving atto determine the grant date fair value of these awards, see noteNote 7 to the consolidated financial statements that are included in our Annual Report onForm 10-K for the fiscal year ended September 30, 2010.2012.20102012 appears in the Compensation Discussion and Analysis section of this proxy statement. Total awards to BD’s executive officers may not, in the absence of special circumstances, exceed 3% of our reported after-tax net income for the fiscal year.39Equity Compensation AwardsUnits.Units. Performance Units are performance-based restricted stock units that vest three years after grant. The potential payouts under these awards range anywhere from zero to 200% of the award’s share target. The actual payout will be based on BD’s performance against the performance targets over the three-year performance period covering fiscal years2010-2012. 2012-2014. The performance targetsgoals are established at the beginning of the performance period and include 7%an average annual revenue growth target of 4.3% (after excluding the effects of foreign currency translation) and an average return on invested capital target of 32%24%. Performance Units accrue dividend equivalents each time BD pays a dividend on its common stock, which are deemed to be reinvestedwere issued in BD shares on the date the dividend is paid. Dividend equivalents accrue at the same rate as dividends are paid on BD common stock, and are paid, in the form of shares, only if and when the underlying award vests. The value of thetandem with dividend equivalent rights is included in the amount shown in the above table and the “Stock Awards” column of the Summary Compensation Table.(see below). Performance Units are not transferable, and holders may not vote shares underlying the award until the shares have been distributed.Rights.Rights. A stock appreciation right (“SAR”) represents the right to receive, upon exercise, shares of BD common stock equal in value to the difference between the market price of BD common stock at the time of exercise and the exercise price. SARs have a ten-year term, and become exercisable in four equal annual installments, beginning one year following the grant date. Executive officersrequiredissued in tandem with dividend equivalent rights. Under these rights, the awards accrue dividend equivalents each time BD pays a dividend, which are deemed to hold 75%be reinvested in BD shares. Dividend equivalents accrue on these awards at the same rate as dividends are paid on outstanding shares of BD stock. The accrued dividend equivalents are paid, in the form of shares, only if the underlying award vests. The value of the net, after-tax shares received upon exercisedividend equivalent rights is included in the amounts shown in the above table and the “Stock Awards” column of the SARs for a period of one year following exercise.Summary Compensation Table.Control.Control. Performance Units, TVUs and SARs fully vest upon a change of control (see “Accelerated Vesting of Equity Compensation Awards Upon a Change of Control” on page 48)51).402010.2012.20102012 Fiscal Year-End Option Awards Stock Awards Equity Equity Incentive Plan Incentive Plan Awards: Awards: Market Number of Market or Number of Number of Number of Value of Unearned Payout Value Securities Securities Shares or Shares or Shares, Units of Unearned Underlying Underlying Option Units of Units of or Other Shares, Units Unexercised Unexercised Exercise Option Stock That Stock That Rights That or Other Rights Grant Options Options Price Expiration Have Not Have Not Have Not That Have Not Name Date Exercisable(1) Unexercisable(1) ($/Sh) Date Vested(2) Vested(3) Vested(4) Vested(3) Edward J. Ludwig 11/25/2002 220,000 0 $ 29.99 11/25/2012 11/24/2003 98,961 0 $ 38.78 11/24/2013 11/23/2004 76,409 0 $ 54.41 11/23/2014 11/21/2005 86,819 0 $ 59.16 11/21/2015 11/21/2006 58,935 19,645 $ 71.72 11/21/2016 11/20/2007 37,514 37,515 $ 84.33 11/20/2017 11/25/2008 24,828 74,485 $ 62.50 11/25/2018 11/24/2009 0 150,540 $ 75.63 11/24/2019 Various 123,342 $ 9,139,642 71,933 $ 5,330,235 David V. Elkins 11/24/2009 0 32,845 $ 75.63 11/24/2019 Various 5,494 407,105 8,610 638,001 Vincent A. Forlenza 11/27/2001 692 0 $ 32.49 11/27/2011 11/25/2002 45,000 0 $ 29.99 11/25/2012 11/24/2003 26,000 0 $ 38.78 11/24/2013 11/23/2004 22,923 0 $ 54.41 11/23/2014 11/21/2005 21,118 0 $ 59.16 11/21/2015 11/21/2006 13,554 4,519 $ 71.72 11/21/2016 11/20/2007 9,078 9,079 $ 84.33 11/20/2017 11/25/2008 8,636 25,908 $ 62.50 11/25/2018 11/24/2009 0 54,742 $ 75.63 11/24/2019 Various 35,302 2,615,878 25,645 1,900,295 William A. Kozy 11/24/2003 26,000 0 $ 38.78 11/24/2013 11/23/2004 22,923 0 $ 54.41 11/23/2014 11/21/2005 21,118 0 $ 59.16 11/21/2015 11/21/2006 13,554 4,519 $ 71.72 11/21/2016 11/20/2007 9,078 9,079 $ 84.33 11/20/2017 11/25/2008 5,980 17,942 $ 62.50 11/25/2018 11/24/2009 0 40,235 $ 75.63 11/24/2019 Various 38,022 2,817,430 18,369 1,361,143 Gary M. Cohen 11/24/2003 30,000 0 $ 38.78 11/24/2013 11/23/2004 23,177 0 $ 54.41 11/23/2014 11/21/2005 21,353 0 $ 59.16 11/21/2015 11/21/2006 13,554 4,519 $ 71.72 11/21/2016 11/20/2007 9,078 9,079 $ 84.33 11/20/2017 11/25/2008 5,980 17,942 $ 62.50 11/25/2018 11/24/2009 0 40,235 $ 75.63 11/24/2019 Various 29,617 2,194,620 18,369 1,361,143 Option Awards Stock Awards Grant
Date Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
(1) Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
(1) Option
Exercise
Price
($/Sh) Option
Expiration
Date Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(2) Market
Value of
Shares or
Units of
Stock
That
Have Not
Vested
($)(3) Equity
Incentive Plan
Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested (#)(4) Equity
Incentive Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other Rights
That Have Not
Vested ($)(3) 11/24/2003 26,000 0 $ 38.78 11/24/2013 11/23/2004 22,923 0 $ 54.41 11/23/2014 11/21/2005 21,118 0 $ 59.16 11/21/2015 11/21/2006 18,073 0 $ 71.72 11/21/2016 11/20/2007 18,157 0 $ 84.33 11/20/2017 11/25/2008 25,908 8,636 $ 62.50 11/25/2018 11/24/2009 23,370 27,372 $ 75.63 11/24/2019 11/23/2010 21,343 64,029 $ 76.64 11/23/2020 11/22/2011 0 181,794 $ 72.12 11/22/2021 Various 44,087 3,463,475 51,570 4,051,339 11/24/2009 16,422 16,423 $ 75.63 11/24/2019 11/23/2010 12,958 38,875 $ 76.64 11/23/2020 11/22/2011 0 63,399 $ 72.12 11/22/2021 Various 5,679 446,142 22,894 1,798,553 11/23/2004 22,923 0 $ 54.41 11/23/2014 11/21/2005 21,118 0 $ 59.16 11/21/2015 11/21/2006 18,073 0 $ 71.72 11/21/2016 11/20/2007 18,157 0 $ 84.33 11/20/2017 11/25/2008 17,940 5,982 $ 62.50 11/25/2018 11/24/2009 20,116 20,119 $ 75.63 11/24/2019 11/23/2010 12,958 38,875 $ 76.64 11/23/2020 11/22/2011 0 72,351 $ 72.12 11/22/2021 Various 38,739 3,043,336 24,498 1,924,563 11/23/2004 23,177 0 $ 54.41 11/23/2014 11/21/2005 21,353 0 $ 59.16 11/21/2015 11/21/2006 18,073 0 $ 71.72 11/21/2016 11/20/2007 18,157 0 $ 84.33 11/20/2017 11/25/2008 17,940 5,982 $ 62.50 11/25/2018 11/24/2009 20,116 20,119 $ 75.63 11/24/2019 11/23/2010 12,958 38,875 $ 76.64 11/23/2020 11/22/2011 0 47,511 $ 72.12 11/22/2021 Various 28,113 2,208,557 20,047 1,574,892 11/23/2004 16,301 0 $ 54.41 11/23/2014 11/21/2005 15,017 0 $ 59.16 11/21/2015 11/21/2006 12,769 0 $ 71.72 11/21/2016 11/20/2007 12,380 0 $ 84.33 11/20/2017 11/25/2008 12,306 4,102 $ 62.50 11/25/2018 11/24/2009 13,000 13,002 $ 75.63 11/24/2019 11/23/2010 9,299 27,899 $ 76.64 11/23/2020 11/22/2011 0 44,364 $ 72.12 11/22/2021 Various 20,452 1,606,709 16,227 1,274,793 (1) Stock options and SARs are included in these columns. Stock options and SARs become exercisable in four equal annual installments, beginning one year following the date of grant. 41Set forth below is the value of the exercisable options and SARs held by named executive officers at the end of fiscal year 2010.2012. The value represents the difference between $74.10,$78.56, the closing price of BD common stock on September 30, 2010,2012, and the exercise price of each exercisable option or SAR held by the named executive officer. These values may not reflect the value actually realized by the named executive officers. Name Value of Vested Options and SARs Edward J. Ludwig $ 16,430,271 Vincent A. Forlenza 3,831,593 William A. Kozy 1,787,039 Gary M. Cohen 1,936,852 Value of Vested Options and SARs $ 2,658,670 72,996 1,458,940 1,469,634 1,025,992 (2) The amounts shown in this column include grants of time-vested restricted stock units (“TVUs”) and other restricted stock unit awards that are not performance-based. TheThese include TVUs granted on November 22, 2011, which vest three years after grant. The otheramounts shown for the named executive officers (other than Mr. Elkins) also include awards that vest at, or one year following, the retirement of the named executive officer. Also includesNo shares underare included for the Performance Units that coveredcovering the 2010-2012 fiscal year 2008-2010 performance period and vested in November 2010.as there was no payout for these awards.(3) Market value has been calculated by multiplying the number of unvested units by $74.10,$78.56, the closing price of BD common stock on September 30, 2010.2012. These values may not reflect the value actually realized by the named executive officers.(4) The amounts in this column represent the Performance Unit awards shown below. The amounts shown reflect the target shares issuable under the awards plus accrued dividend shares. The actual number of shares issued under these awards will be based on BD’s performance over the applicable performance period. For Mr. Ludwig:For Mr. Forlenza: Number of Shares Issuable Vesting Date 11/23/2010Grant Date Number of Shares IssuablePerformance PeriodVesting Date11/25/200832,46918,999 Fiscal years 2009-2011 2011-2013 11/ 25/201123/2013 11/ 24/200922/2011 39,46432,571 Fiscal years 2010-2012 2012-2014 11/ 24/201222/2014 For Mr. Elkins:Number of Shares Issuable Performance Period Vesting Date 11/23/2010Grant Date Number of Shares IssuablePerformance PeriodVesting Date11/24/20098,61011,535 Fiscal years 2010-2012 2011-2013 11/ 24/201223/2013 For Mr. Forlenza:11/22/2011 Grant DateNumber of Shares IssuablePerformance PeriodVesting Date11/25/200811,29411,359 Fiscal years 2009-2011 2012-2014 11/ 25/201122/2014For Mr. Kozy: Number of Shares Issuable Performance Period Vesting Date 11/ 24/200923/2010 14,35111,535 Fiscal years 2010-2012 2011-2013 11/ 24/201223/2013 For Messrs. Kozy and Cohen:11/22/2011 Grant DateNumber of Shares IssuablePerformance PeriodVesting Date11/25/20087,82112,963 Fiscal years 2009-2011 2012-2014 11/ 25/201122/2014For Mr. Cohen: Number of Shares Issuable Performance Period Vesting Date 11/ 24/200923/2010 10,54811,535 Fiscal years 2010-2012 2011-2013 11/ 24/201223/201311/22/2011 8,512 Fiscal years 2012-2014 11/22/2014 For Mr. Sherman: Number of Shares Issuable Performance Period Vesting Date 11/23/2010 8,278 Fiscal years 2011-2013 11/23/2013 11/22/2011 7,949 Fiscal years 2012-2014 11/22/2014 42STOCK OPTION EXERCISES AND VESTING OF STOCK UNITS2010.2012.20102012 Option Awards Stock Awards Number of Value Number of Shares Acquired Realized on Shares Acquired Value Realized Name on Exercise Exercise(1) on Vesting(2) on Vesting(3) Edward J. Ludwig 65,000 $ 2,889,068 19,645 $ 1,447,837 Vincent A. Forlenza 57,308 2,572,109 4,519 333,050 William A. Kozy 41,666 1,940,823 4,519 333,050 Gary M. Cohen — — 4,519 333,050 Option Awards Stock Awards Number of
Shares Acquired
on Exercise (#) Value
Realized on
Exercise(1) Number of
Shares Acquired
on Vesting (#)(2) Value Realized
on Vesting(3) 0 0 8,069 $ 573,787 0 0 5,588 397,363 0 0 5,588 397,363 0 0 5,607 415,703 14,910 $ 497,472 3,832 272,494 (1) Represents the difference between the exercise price of the stock options and the fair market value of BD common stock at exercise. (2) Shows for each named executive officer other than Mr. Elkins, the shares (including shares under dividend equivalent rights) distributedreinvestment shares) vesting in November 2009fiscal year 2012 under Performance Units that covered the fiscal year2007-2009 2009-2011 performance period. Includes for Mr. Elkins shares (including dividend reinvestment shares) vesting under TVUs granted in December 2008.(3) Based on the closing price of BD stock of $73.70$71.11 on the vesting date for named executive officers other than Mr. Elkins. For Mr. Elkins, based on the closing price of BD stock of $74.14 on his vesting date.OTHER COMPENSATIONLudwig, Forlenza, Kozy, Cohen and CohenSherman participate under the final average pay provisions of the plan, while Mr. Elkins participatesparticipated under the cash balance provisions. Beginning January 1, 2013, future benefit accruals for BD associates, including the named executive officers, will be calculated under the cash balance provisions of the Retirement Plan.normalthe earliest date on which the named executive officer can retire without any reduction in retirement age,benefits, assuming benefits payable as a single life annuity.annuity (see discussion of early retirement benefits below). For a description of the other assumptions used in calculating the present value of these benefits, see Note 8 to the43consolidated financial statements contained in our Annual Report onForm 10-K for the year ended September 30, 2010.2012.20102012 FISCAL YEAR-END Number of years Present value of Name Plan name credited service accumulated benefit Edward J. Ludwig Retirement Plan 31 $ 849,572 Restoration Plan 31 9,123,407 David V. Elkins Retirement Plan 2 20,716 Restoration Plan 2 29,375 Vincent A. Forlenza Retirement Plan 30 755,404 Restoration Plan 30 2,929,315 William A. Kozy Retirement Plan 36 963,914 Restoration Plan 36 3,238,395 Gary M. Cohen Retirement Plan 27 495,773 Restoration Plan 27 1,713,539 Retirement Plan 32 $ 1,622,667 Restoration Plan 32 7,166,640 Retirement Plan 4 43,874 Restoration Plan 4 98,387 Retirement Plan 38 1,841,192 Restoration Plan 38 6,297,495 Retirement Plan 29 1,492,412 Restoration Plan 29 4,978,947 Retirement Plan 9 142,362 Restoration Plan 9 309,837 Provisions.Provisions. The monthly pension benefit payable in cases of retirement at normal retirement age under the final average pay provisions of the Retirement Plan is calculated using the following formula:Provisions.Provisions. Each month, an associate’s cash balance account is credited inwith an amount equal to a percentage of the associate’s total compensation for the month (generally, salary and other forms of regular compensation, including commissions and PIP awards). Such percentage is calculated as follows:Credited Servicecredited service Credit Percentagepercentage 3% 4% 5% 6% 7% Ludwig, Forlenza and Kozy are currently eligible for early retirement under the plans.4/ 4/10 of 1% (0.004) for each month that the associate receives benefits before the earlier of (i) age 65 or (ii) the date the associate’s age plus years of credited service would have equaled 85 had his or her employment continued. For example, if an associate were to retire at age 63 with 22 years of service, the associate’s benefit would not be reduced, because the sum of the associate’s age and service equals 85.44Under the cash balance provisions, the amount of the associate’s benefit will be the associate’s account balance on the early retirement date. The associate may elect to begin payment of the account balance on the early retirement date or delay payment until the normal retirement date.publicly-available publicly availablerestricted stock unit awards.Performance Units and TVUs. These deferred shares are allocated to the participant’s BD stock account and must stay in such account until they are distributed.A participantParticipants may elect to receive deferred amounts either while they are still employed at BD or following termination of employment. A participantParticipants may elect to receive distributions in installments or in a lump sum. Except in the case of an unforeseen emergency, a participantparticipants may not withdraw deferred funds prior to their scheduled distribution date.boththese plans does not exceed three times the limit for qualified plans ($735,000 in calendar year 2010).plans. The plan is not funded by BD, and BD is not required to make any contributions to the plan.plan with respect to its obligations to pay deferred compensation. BD has unrestricted use of any amounts deferred by participants. Participants have an unsecured contractual commitment from BD to pay the amounts due under the plan. When such payments are due, the cashand/or stock will be distributed from BD’s general assets. BD has purchased corporate-owned life insurance that mirrors the returns on funds contributed toamounts deferred under the plan to substantially offset this liability.45Account Information. The following table sets forth information regarding activity during fiscal year 20102012 in the plan accounts maintained by the named executive officers.20102012 Executive Registrant Aggregate Aggregate balance contributions contributions Aggregate earnings withdrawals/ at last Name in last fiscal year(1) in last fiscal year in last fiscal year distributions fiscal year-end Edward J. Ludwig $ 64,200 $ 22,050 $ 834,205 $ 6,732 $ 10,801,945 David V. Elkins 21,923 0 936 0 22,859 Vincent A. Forlenza 83,000 22,050 47,365 0 659,252 William A. Kozy 85,700 22,050 49,209 0 725,274 Gary M. Cohen 61,199 22,395 257,459 0 3,169,920 Executive
contributions
in last fiscal year(1) Registrant
contributions
in last fiscal year(2) Aggregate earnings
in last fiscal year Aggregate balance
at last
fiscal year-end(3) $ 106,385 $ 22,050 $ 153,726 $ 1,030,295 81,779 22,050 22,981 191,463 94,196 22,050 151,051 1,073,830 64,256 22,050 474,893 3,794,073 48,658 18,675 218,101 2,065,407 (1) The following amounts are reported as compensation in the fiscal year 20102012 “Salary” column of the Summary Compensation Table appearing on page 37:39: Mr. Ludwig—Forlenza—$64,200;63,000; Mr. Elkins—$21,923; Mr. Forlenza—$45,500;43,279; Mr. Kozy—$57,499;64,196; Mr. Cohen—$36,056; and Mr. Cohen—Sherman—$34,200.29,158. The remaining executive contributions relate to the deferral of fiscal year 20092011 PIP awards.(2) Amounts in this column are included in the “All Other Compensation” column of the Summary Compensation Table. (3) Reflects amounts in which the named executive officer is vested. BD matching contributions fully vest after a participant has been at BD for four years. Additional ArrangementsAll BD associates, including the named executive officers, are eligible to participate in BD’s Matching Gift Program, pursuant to which BD matches contributions that are made by a participant to qualifying nonprofit organizations up to certain limits in a calendar year.PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE OF CONTROL2010.2012. However, the actual amounts that would be paid to thethese named executive officers under each scenario can only be determined at the actual time of termination. Termination Termination Termination following a due to Termination due to Termination Name change of control(1) retirement(2) without cause(3) disability(4) due to death(5) Edward J. Ludwig $ 26,887,427 $ 28,461,199 $ 29,851,276 $ 29,416,867 $ 30,179,167 David V. Elkins 2,242,000 — 841,890 584,352 1,084,352 Vincent A. Forlenza 12,122,536 10,656,407 11,520,253 10,887,747 10,766,461 William A. Kozy 11,401,032 10,745,009 11,657,778 10,976,350 10,486,775 Gary M. Cohen 3,805,897 — 3,463,869 3,205,557 4,345,557 Termination
without cause or
for “good reason”
following a
change of control(1) Termination
due to
retirement(2) Termination
without cause(3) Termination
due to
disability(4) Termination
due to death(5) $ 21,111,753 $ 15,087,862 $ 13,266,256 $ 16,200,350 $ 16,433,156 5,756,612 — 1,221,751 2,457,870 3,082,870 13,496,021 12,481,515 12,035,714 13,299,168 12,830,653 9,143,252 — 3,320,170 4,301,483 4,617,353 4,277,098 — 2,225,985 3,149,401 3,639,401 (1) Includes amounts under change of control employment agreements (which are described below). Does not include the accelerated vesting of equity compensation awards that occurs solely upon a change of control (see table below). Because Messrs. Ludwig, Forlenza and Kozy were retirement-eligible on September 30, 2010,2012, also included for them are early retirement benefits, assuming payout as a lump sum, in the following amounts: Mr. Ludwig—$16,172,215; Mr. Forlenza—$6,933,036;8,448,833; and Mr. Kozy—$7,147,982.7,905,837. The early retirement benefits for Messrs. Forlenza and Kozy differ from amounts shown in the table on page 46 because different assumptions are used to calculate these numbers.(2) IncludesAmounts include early retirement benefits, assuming payout as a lump sum. Also includes the accelerated vesting of equity compensation awards upon retirement, including time-vested restricted stock units that settle some period after retirement. The amounts shown reflect the pro rata amount of Performance Units earned as of September 30, 2010,2012, with awards that vested in November 20102012 included at their actuala zero payout and all other Performance Units at their target payout. Messrs. Elkins, Cohen and Cohen areSherman were not currently eligible for retirement.retirement as of September 30, 2012.(3) Includes the accelerated vesting of equity compensation awards. Also includes outplacement services (with an assumed maximum cost of $100,000), health and welfare benefits and severance benefits. BD’s severance policy for U.S. associates are entitled toprovides for severance payments equal to two weeks’ salary for each year of service (assuming the associate grants a general46release to BD) ., subject to a maximum of $500,000, except for instances that do not involve a reduction in force, in which case the payment of severance is at BD’s discretion. The table assumes payment of severance to the named executive officers in the amount that would be paid in a reduction in force. Also includes early retirement benefits for Messrs. Ludwig, Forlenza and Kozy, assuming payout as a lump sum.(4) Includes the accelerated vesting of equity compensation awards. Also includes early retirement benefits for Messrs. Ludwig, Forlenza and Kozy, assuming payout as a lump sum.sum, and accelerated vesting of matching contributions under our deferred compensation plan for Mr. Elkins.(5) Includes the accelerated vesting of equity compensation awards, life insurance benefits, and, for Messrs. Ludwig, Forlenza and Kozy, the lump sum payment of retirement benefits under the Deferred Compensation and Retirement Benefit Restoration Plan. Benefits for these persons under our Retirement Plan would be paid out as a joint and survivor annuity and are not included in the amounts shown. The monthly benefits under these annuities would be $4,028 in the case of Mr. Forlenza, and $4,734 in the case of Mr. Kozy. Also includes for Mr. Elkins acceleration of matching contributions under our deferred compensation plan.to which the named executive officersthat would be entitledpaid upon termination, which is shown on page 46.48. The amounts shown also do not include the value of vested stock options and SARs held by the named executive officers as of September 30, 2010.2012. The value of these vested options and SARs appears on page 42.44.an agreemententered into agreements with each of the named executive officers that providesprovide for the continued employment of the executive for a period of two years following a change of control of BD. These agreements are designed to retain key executives and provide continuity of management in the event of an actual or threatened change of control of BD. The following is a summary of the key terms of the agreements.• the acquisition by any person or group of 25% or more of the outstanding BD common stock;• the incumbent members of the Board ceasing to constitute at least a majority of the Board;• certain business combinations; and• shareholder approval of the liquidation or dissolution of BD.“cause,”“cause” or the executive terminates his employment for “good reason,”reason” during the two years following a change of control, the executive would receive:• a pro rata PIP award for the year of termination based on the higher of (i) the executive’s average PIP award for the last three fiscal years prior to termination, and (ii) his target PIP award for the year in which the termination occurs (the greater of the two being referred to herein as the “Highest Incentive Payment”);• a lump sum severance payment equal to three times (two times in the case of Mr. Elkins) the sum of the executive’s annual salary and his Highest Incentive Payment;• a lump sum payment equal to the present value of the increased pension benefits the executive would have received had he remained employed for an additional three years (two years in the case of Mr. Elkins) following termination;• continuation of the executive’s health and welfare benefits (reduced to the extent provided by any subsequent employer) for a period of three years (two years in the case of Mr. Elkins); and• outplacement services, subject to a limit on the cost to BD of $100,000.thean excise tax imposed by the Internal Revenue Code, BD will make an additional“gross-up” tax reimbursement payment to the executive. As a result of this“gross-up,” payment, the executive would retain the same amount, net47of all taxes, that he would have retained had the excise tax not been triggered. Thisgross-up provision applies to any payments or distributions resulting from the change of control, including the accelerated vesting of equity awards discussed below. However, if such payments and distributions do not exceed 110% of the level that triggers the excise tax, the paymentsthey will be reduced to the extent necessary to avoid the excise tax.2010.2012. These estimates are based on salary rates in effect as of September 30, 2010,2012, and use the average2012 target PIP awardawards of the named executive officers for the last three fiscal years as the Highest Incentive Payment. Nogross-up payments would have been required under the agreements. Highest Additional Health and Incentive Severance Retirement Welfare Outplacement Name Payment Payment Benefits Benefits Services Total Edward J. Ludwig $ 1,475,393 $ 7,636,179 $ 1,467,640 $ 36,000 $ 100,000 $ 10,715,212 David V. Elkins 350,000 1,700,000 68,000 24,000 100,000 2,242,000 Vincent A. Forlenza 611,667 3,785,001 656,832 36,000 100,000 5,189,500 William A. Kozy 455,000 3,090,000 572,050 36,000 100,000 4,253,050 Gary M. Cohen 438,333 3,024,999 206,565 36,000 100,000 3,805,897 Highest
Incentive
Payment Severance
Payment Additional
Retirement
Benefits Health and
Welfare
Benefits Outplacement
Services Tax
Reimbursement Total $ 1,080,000 $ 5,940,000 $ 817,103 $ 36,000 $ 100,000 $ 4,649,817 $ 12,622,920 618,750 2,487,500 121,875 24,000 100,000 2,404,487 5,756,612 707,575 4,102,725 643,884 36,000 100,000 — 5,590,184 481,020 3,215,911 5,310,321 36,000 100,000 — 9,143,252 437,625 1,855,250 201,003 24,000 100,000 1,647,220 4,265,098 and performance-based restricted stock units and Performance Units become fully vested and payable (with Performance Units being payable at their target amount). This accelerated vesting occurs with respect to all equity compensation awards granted by BD, not just those granted to executive officers. No termination of employment is required to trigger this acceleration.2010,2012, assuming a change of control of BD occurred on September 30, 2010.2012. The BD common stock closing price of $74.10$78.56 on September 30, 20102012 is used for purposes of these calculations. Time-vested restricted stock Performance Name units Units Options/SARs Total Edward J. Ludwig $ 8,344,549 $ 7,137,164 $ 910,781 $ 16,392,494 David V. Elkins 407,105 638,001 0 1,045,106 Vincent A. Forlenza 2,423,441 2,337,633 311,288 5,072,362 William A. Kozy 2,624,993 1,798,481 218,882 4,642,356 Gary M. Cohen 2,002,182 1,798,481 218,882 4,019,545 Time-vested
restricted stock units Performance
Units Options/
SARs Total $ 3,463,475 $ 5,229,268 $ 1,512,583 $ 10,205,326 446,142 2,505,278 531,049 3,482,469 3,043,336 2,790,294 695,600 6,529,230 2,208,557 2,440,624 535,630 5,184,811 1,606,709 1,834,297 443,244 3,884,250 $74.10.$78.56. The value of unvested options and SARs equalsis calculated using the difference between the exercise price of each option or SAR and $74.10.$78.56.• all unvested options and SARs held by the named executive officer become fully exercisable for their remaining term;• all TVUs and other time-vested units held by the named executive officer vest at, or on the first anniversary of, retirement; and• all Performance Units held by the named executive officer vest pro rata based on the amount of the vesting period that had elapsed. The payments would be made after the end of the applicable48performance periods and would be based on BD’s actual performance for those periods, rather than award targets.Upon a named executive officer’s termination due to involuntary termination without cause:• the named executive officer is entitled to exercise his stock options and SARs for three months following termination, but only to the extent they were vested at the time of termination;• all TVUs and other time-vested units held by the named executive officer fully vest; and• all Performance Units held by the named executive officer vest pro rata based on the amount of the vesting period that had elapsed. The payments would be made after the end of the applicable performance periods and would be based on BD’s actual performance for those periods, rather than award targets.• all unvested options and SARs held by the named executive officer become fully exercisable for their remaining term;• all TVUs and other time-vested units held by the named executive officer fully vest; and• 49Proposal 2. RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 2011.2013. A representative of E&Y willis expected to attend the 2011 Annual Meetingmeeting to respond to appropriate questions and will have the opportunity to make a statement.20102012 and 2009: 2010 2009 Audit Fees $ 7,680,000 $ 7,491,000 “Audit Fees” include fees associated with the annual audit of BD’s consolidated financial statements, reviews of BD’s quarterly reports on Form 10-Q, registration statements filed with foreign regulatory bodies, and statutory audits required internationally. Audit Related Fees $ 119,000 $ 1,039,000 “Audit Related Fees” consist of assurance and related services that are reasonably related to the performance of the audit or interim financial statement review and are not reported under Audit Fees. The services for fees disclosed in this category include benefit plan audits and other audit services requested by management, which are in addition to the scope of the financial statement audit. Tax Fees $ 211,000 $ 209,000 “Tax Fees” includes tax compliance, assistance with tax audits, tax advice and tax planning. All Other Fees $ 38,000 $ 15,000 “All Other Fees” includes various miscellaneous services. Total $ 8,048,000 $ 8,754,000 A substantial portion of the professional services fees for the years ended September 30, 2010 and 2009 are denominated in a currency other than U.S. dollars.2011: $ 7,370,000 $ 7,287,000 “Audit Fees” include fees associated with the annual audit of BD’s consolidated financial statements, reviews of BD’s quarterly reports on Form 10-Q, registration statements filed with the SEC and statutory audits required internationally. $ 391,000 $ 488,500 “Audit Related Fees” consist of assurance and related services that are reasonably related to the performance of the audit or interim financial statement review and are not reported under Audit Fees. These services include benefit plan audits and other audit services requested by management, which are in addition to the scope of the financial statement audit. $ 395,000 $ 198,000 “Tax Fees” includes tax compliance, assistance with tax audits, tax advice and tax planning. $ 3,000 $ 18,000 “All Other Fees” includes various miscellaneous services. $ 8,159,000 $ 7,991,500 All of the services listed in the above table were approved pursuant to this policy.. Under the policy, the Audit Committee will appoint BD’s independent auditors each fiscal year and pre-approve the engagement of the independent auditors for the audit services to be provided.. In accordance with the policy, the Audit Committee has established detailed pre-approved categories of non-audit services that may be performed by the independent auditors during the fiscal year, subject to the dollar limitations set by the Audit Committee. The Audit Committee has also delegated to the Chair of the Audit Committee the authority to approve additional non-audit services to be performed by the independent auditors, subject to certain dollar limitations, and provided that the full Audit Committee is informed of each service. All other non-audit services are required to be pre-approved by the entire Audit Committee.50REPORT OF THE AUDIT COMMITTEE2010,2012, for filing with the Securities and Exchange Commission.Cathy E. Minehan51Proposal 3. ADVISORY VOTE ONTO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION2625 of this proxy statement describes BD’s executive compensation program and the compensation decisions made by the Compensation and Benefits Committee and the Board of Directors in 20102012 with respect to our Chief Executive Officer and the other officers named in the Summary Compensation Table on page 3739 (who we refer to as the “named executive officers”). The Board of Directors is asking shareholders to cast a non-binding advisory vote on the following resolution:The Board believes this link between compensation and the achievement of our short- and long-term business goals has helped drive BD’s performance over time, particularly during the recent difficult economic conditions. At the same time, we believe our program does not encourage excessive risk-taking by management. In addition,We believe that the compensation actions taken for 2010 reflect BD’s commitment to maintaining profitability and creating shareholder value in2012 appropriately reflected the current economic climate, asperformance of our named executive officers received no salary increase in 2010 and received substantially lower Performance Incentive Plan awards than in 2009, despite better than targetBD during the year under challenging economic conditions, and that payouts under our long-term incentive compensation demonstrate a high degree of alignment with BD’s performance foragainst the year.targets set by our Compensation and Benefits Committee. BD holds an advisory vote to approve named executive officer compensation on an annual basis.Proposal 4. ADVISORY VOTE ON FREQUENCYAMENDMENT TO BD’S RESTATED CERTIFICATE OF EXECUTIVE COMPENSATION ADVISORY VOTESINCORPORATIONIn Proposal 3, shareholders are being askedcast a non-binding advisory vote with respect to the compensationBD’s Restated Certificate of Incorporation (the “Restated Certificate”) that would eliminate Article VI of the BD executive officers named in the Summary Compensation Table. This advisory voteRestated Certificate. The text of Article VI is typicallyattached to this proxy statement as Appendix A. Article VI is what is commonly referred to as a“say-on-pay” vote. “fair price provision”. Under Article VI, business combinations (including mergers and certain asset sales) with a shareholder owning 10% or more of the outstanding BD shares must be approved by at least eighty percent (80%) of the outstanding BD shares, unless (i) the proposed transaction is approved by two-thirds of the disinterested BD directors or (ii) the value of the consideration to be paid to BD’s shareholders meets certain minimum requirements. The fair price provision is designed to help BD defend against certain kinds of tender offers, known as coercive, two-tiered tender offers. In this Proposal 4,type of takeover, a potential acquirer commences a tender offer for the shares needed to gain control of a company, and then effects a transaction with the company to obtain the remaining shares at a lower price or for less favorable consideration. This creates pressure on shareholders to accept the initial tender offer, even if they believe the price is inadequate. The fair price provision is not designed to prevent a takeover, but instead to encourage a potential acquirer to negotiate with the Board to ensure all shareholders receive adequate consideration for their shares.Directors is also asking shareholders to cast a non-binding advisory vote on how frequentlysay-on-pay votes should be heldmaintaining the fair price provision in the future. Shareholders will be ableRestated Certificate, and has determined that it is appropriate to cast their votes on whether to holdsay-on-pay votes every one, two or three years. Alternatively, you may abstaineliminate this provision by removing Article VI in its entirety from casting a vote.This advisory vote is not binding on the Board.Restated Certificate. The Board acknowledgesunderstands that there areeliminating supermajority voting provisions is considered by many commentators and investors to be a number of points of view regarding the relative benefits of annual and less frequentsay-on-pay votes. Accordingly,best practice in corporate governance. In addition, the Board intends to holdsay-on-pay votes in the future in accordance with the alternativenotes that receives the most shareholder support.52Proposal 5. SHAREHOLDER PROPOSAL ON SPECIAL SHAREHOLDER MEETINGSMr. Kenneth Steiner, 14 Stoner Ave., 2M, Great Neck, New York, 11021, owner of 600 shares of BD common stock, has informed BD that he plans to introduce the following proposal at the meeting:5 – Special Shareowner MeetingsRESOLVED, Shareowners ask our board to take the steps necessary unilaterally (to the fullest extent permitted by law) to amend our bylaws and each appropriate governing document to give holders of 10% of our outstanding common stock (or the lowest percentage permitted by law above 10%) the power to call a special shareowner meeting.Special meetings allow shareowners to vote on important matters, such as electing new directors, that can arise between annual meetings. If shareowners cannot call special meetings, management may become insulated and investor returns may suffer. Shareowner input on the timing of shareowner meetings is especially important during a major restructuring—when events unfold quickly and issues may become moot by the next annual meeting. This proposal does not impact our board’s current power to call a special meeting.This proposal topic, to empower holders of 10% of our outstanding common stock, won more than 60% support at our 2009 annual meeting. The Council of Institutional Investors www.cii.org recommends that management adopt shareholder proposals upon receiving their first majority vote. This proposal topic also won more than 60% support at the following companies: CVS Caremark (CVS), Sprint Nextel (S), Safeway (SWY), Motorola (MOT) and R. R. Donnelley (RRD).Statement of Kenneth SteinerThe merit of this Special Shareowner Meeting proposal should also be considered in the context of the need for improvement in our company’s 2010 reported corporate governance status:Our CEO Edward Ludwig received $53 million total pay for three years employment. Mr. Ludwig would also gain $39 million in the event of termination following a change of control. Source: The Corporate Library www.thecorporatelibrary.com, an independent investment research firm.Our company’s annual executive incentive plan, the Performance Incentive Plan, used no specific formula and was not based on “the achievement of any particular performance objective.”Mr. Ludwig received $2.9 million in 2009 for his retirement. Compare this $2.9 million to our company’s typical individual retirement contributions for 29,000 employees.Director Cathy Minehan’s husband was a managing director at Goldman, Sachs, which, together with its affiliates provided investment banking and financial services to BDX—conflict of interest concern. Ms. Minehan also served on our Board’s Audit Committee and also received 24% in negative votes. This was compounded by the fact that Ms. Minehan needed only one yes-vote from our 230 million shares to be elected under our obsolete governance. Two directors each owned less than 111 shares: Claire Fraser-Liggett and Adel Mahmoud.We had an 80% shareowner vote requirement which could prevent us from obtaining a profitable offer for our stock. Our company did not have an Independent Chairman. This was compounded by the23-years of director tenure for inside-related Henry Becton, our Lead Director and also chairman of our Nomination Committee—independence concerns.The above concerns show there is need for improvement. Please encourage our board to respond positively to this proposal: Special Shareowner Meetings—Yes on 5.* * *BOARD OF DIRECTORS’ RESPONSEThe Board of Directors recommends a vote AGAINST Proposal 5 for the following reasons:At the 2010 Annual Meeting of Shareholders, the shareholders approved an amendment to BD’s By-Laws that allows shareholders of at least 25% of the voting power of BD’s outstanding capital stock to call a special meeting of53restrictions applicable to any award will lapse.shareholders. The Board believes that an ownership threshold of 25% in order to request a special meeting strikes a reasonable balance between enhancing shareholder rights and protecting against the risk of a small minority of shareholders calling an unlimited number of special meetings that would be disruptive to our business and impose unnecessary costs and expense on BD. The 25% threshold is also consistent with thresholds adopted by other large public companies incorporated in New Jersey.In addition, if the holders of less than 25% of BD’s common stock believe a special meeting should be called, under the New Jersey corporationShareholders Protection Act (the “Act”), which was enacted into law after the holdersfair price provision was added to the Restated Certificate, provides similar protectionsBD’s commona corporation’s outstanding voting stock have(an “interested shareholder”) for a period of five years after the rightdate such person reaches the 10% threshold, unless the board of directors approved the business combination prior to havethat date. The Act also prohibits a court call a specialbusiness combination with an interested shareholder at any time, unless the transaction is approved by holders of two-thirds of the shares not held by the interested shareholder or the price to be paid by the interested shareholder meets certain minimum price requirements.meeting upon a showingdo not approve the amendment, Article VI of good cause.Contrary to the proponent’s assertions, BD has instituted strong governance practices and policies that demonstrate the Board’s commitment to transparency and accountability. These practices and policies cover a wide array of subject areas, including the following:• Thirteen of the Board’s fourteen members are independent;• Annual election of directors;• A resignation process for situations where director nominees fail to receive a majority affirmative vote in an uncontested election;• The establishment of a Lead Director position in 2002;• Annual evaluation of the Chief Executive Officer by the Board;• Annual self-evaluation by the Board;• A director retirement policy;• Conflicts of interest and ethics compliance requirements;• The termination of BD’s shareholder rights plan (“poison pill”);• Frequent interaction by management with the investment community; and• A multi-channel process for communicating with directors.The Board therefore believes that these existing provisions enhance our accountability to shareholders and provide ample opportunity for shareholders to call special meetings under appropriate circumstances.4.ACCORDINGLY, Restated Certificate will remain in effect.AGAINSTFOR PROPOSAL 5.Proposal 5. Proposal 6. AMENDMENTS TO THE 2004 EMPLOYEE AND DIRECTOR EQUITY-BASED COMPENSATION PLANSHAREHOLDER PROPOSAL ON CUMULATIVE VOTINGMrs. Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Avenue N.W., Suite 215, Washington, DC 20037, owner800our overall compensation program. We use equity-based compensation to attract, retain and motivate individuals at all levels of BD’s organization that are important to BD’s future. Equity-based compensation also aligns the interests of our executives and other employees with those of BD’s shareholders, and encourages the achievement of important performance goals.has informedremained available for the issuance of awards under the 2004 Plan. We do not believe there are enough remaining shares to continue using equity-based compensation as a significant element of our compensation program beyond 2013. The proposed amendment to Section 5 of the 2004 Plan would increase the shares available for awards by 7,000,000 shares, from 26,800,000 to 33,800,000. Under the amendment, only 2,500,000 of the shares to be added to the 2004 Plan may be used for full-value awards. “Full value” awards are any type of awards other than stock options and stock appreciation rights (“SARs”). This would include, for instance, Performance Units and Time-Vested Units.that she plans(referred to introduceas “Substitute Awards”) will not reduce the number of shares remaining available for issuance under the 2004 Plan. In the event an award is exercised through the delivery of BD shares or withholding tax liabilities arising from an award are satisfied by the withholding of shares, the shares so delivered or withheld will not be available for issuance under the 2004 Plan. In addition, upon the exercise of a stock appreciation right, the greater of the number of shares subject to the stock appreciation right and the number of shares issued in connection with the exercise will be deducted from the number of shares available for issuance under the 2004 Plan.proposal atis a summary of the meeting:RESOLVED: “Thatmaterial features of the stockholders2004 Plan, as proposed to be amended. This summary is qualified in its entirety by the full text of Becton Dickinson, assembledthe 2004 Plan.Annual Meeting in person and by proxy, hereby requestthe 2004 Plan. There are currently 13 non-management members of the Board of Directors, and it is anticipated that an additional non-management director will be elected to take the necessary stepsBoard prior to the Annual Meeting. No participant may receive stock options and SARs under the 2004 Plan in any calendar year relating to more than 250,000 shares of BD common stock, subject to adjustment as discussed below.for cumulative votingthat upon their exercise, the holder will receive cash, BD stock, other securities, other awards, other property or any combination thereof. Shares of stock deliverable under the 2004 Plan may consist, in whole or in part, of authorized and unissued shares or treasury shares.electioncase of directors,Substitute Awards, the exercise price of any stock option or SAR, and the purchase price of any security that may be purchased under any other award, will not be less than 100% of the fair market value of the BD stock or other security on the date of grant. The Compensation Committee may not amend an award to reduce its exercise, grant or purchase price (a “repricing”), cancel an outstanding stock option or SAR and replace it with a new award with a lower exercise price (except for adjustments in connection with stock splits and other events, as described below), or exchange for cash any option or SAR whose exercise price is less than the then current BD stock price. The closing price of BD common stock on November 30, 2012 was $76.67.means each stockholder shalloptions and other purchase rights may be entitledexercised, and the methods by which payment of the purchase price may be made. No loans are extended by BD to any participant in connection with the exercise of an award (although BD is permitted to maintain a broker-assisted “cashless exercise” programs for stock options).many votesdetermined by the Compensation Committee.shall equaldividend equivalent rights.hethat may be earned by an executive pursuant to any such performance-based award is 150,000 shares.she owns multipliedother event described in Section 5(e) of the 2004 Plan affects the BD common stock in a way that an adjustment is required to preserve the value of outstanding awards and prevent dilution or enlargement of the benefits intended to be made available under the 2004 Plan, the Compensation Committee will adjust, as it determines equitable: (i) the number and type of shares (or other securities or property) available for awards, (ii) the number and type of shares (or other securities or property) subject to outstanding awards, and (iii) the grant, purchase or exercise price of any award. The Compensation Committee may not take any other action to reduce the exercise, grant or purchase price of any award as established at the time of grant.numberCompensation Committee. However, in no eventdirectorscertain awards have the right to be elected, and hedefer the receipt of any or she may cast all of such votes forthe shares deliverable upon settlement of an award in accordance with the terms and conditions of BD’s deferral plans described previously in this proxy statement.single candidate, orchange in control (as defined in the 2004 Plan), all awards issued under the 2004 Plan will become fully vested and exercisable, and any two or more of them as he or she may see fit.”REASONS: “Many states have mandatory cumulative voting, so do National Banks.”“In addition, many corporations have adopted cumulative voting.”“Last year the owners of 57,636,133 shares, representing approximately 33.8% of shares voting voted FOR this proposal.”“If you AGREE, please mark your proxy FOR this resolution.”54
Amendment and Termination5.* * *BOARD OF DIRECTORS’ RESPONSEThe Board of Directors recommendsmay amend, discontinue or terminate the 2004 Plan or any portion of the 2004 Plan at any time. Shareholder approval may be required by New York Stock Exchange, tax or regulatory requirements for certain amendments. Participant approval must also be obtained for any amendment that would adversely affect the rights of such participant under any award granted under the 2004 Plan. Stock Appreciation Performance Restricted Rights Units Stock Units 181,794 31,814 15,907 63,399 11,095 5,547 72,351 12,661 6,331 47,511 8,314 4,157 44,364 7,764 3,882 430,500 75,337 37,669 0 0 26,721 948,353 165,966 1,080,052 vote AGAINST Proposal 6brief summary of the principal income tax consequences under current federal income tax laws relating to awards under the 2004 Plan. This summary is not intended to be exhaustive, and, among other things, does not describe state, local or foreign income and other tax consequences.following reasons:shares received pursuant to the exercise of an NQSO or SAR will equal the sum of the compensation income recognized and the exercise price. In the event of a sale of shares received upon the exercise of an NQSO or SAR, any appreciation or depreciation after the exercise date generally will be taxed as capital gain or loss and will be long-term capital gain or loss if the holding period for such shares is more than one year.This proposal has been submittedpast 14 annual meetingstime of grant or exercise of an ISO while an employee (or within three months after termination of employment), and has been rejectedBD will not be entitled to a tax deduction with respect to such grant or exercise. Exercise of an ISO may, however, give rise to taxable compensation income subject to applicable withholding taxes, and a tax deduction to BD, if the ISO is not exercised while the optionee is employed by our shareholders each time.The Board, like most S&P 500 companies, continues to believe that directors shouldBD or within three months after termination of employment, or if the optionee subsequently engages in a “disqualifying disposition,” as described below. Also, the excess of the fair market value of the underlying shares on the date of exercise over the exercise price will be elected through a system that assures that directors will representan item of income for purposes of the interestsoptionee’s alternative minimum tax. A sale or exchange by an optionee of all shareholders, not just thoseshares acquired upon the exercise of particular groups. Cumulative voting could enable individual shareholders or groups of shareholders with lessan ISO more than a majorityone year after the transfer of the shares to pool their votes to elect directors concerned with advancingsuch optionee and more than two years after the positionsdate of grant of the group responsible for their election, rather thanISO will result in any difference between the positionsnet sale proceeds and the exercise price being treated as long-term capital gain (or loss) to the optionee. If such sale or exchange takes place within two years after the date of grant of the ISO or within one year from the date of transfer of the ISO shares to the optionee, such sale or exchange will generally constitute a “disqualifying disposition” of such shares that arewill have the following results: any excess of (i) the lesser of (a) the fair market value of the shares at the time of exercise of the ISO and (b) the amount realized on such disqualifying disposition of the shares, over (ii) the option exercise price of such shares, will be ordinary income to the optionee, and BD will be entitled to a tax deduction in the best interestsamount of BDsuch income. Any further gain or loss after the date of exercise generally will qualify as capital gain or loss and will not result in any deduction by BD.all of our shareholders. In addition,restricted stock unless the support by directorsholder elects under Section 83(b) of the special interestsCode, within thirty days of such receipt, to recognize ordinary income in an amount equal to the fair market value of the constituenciesrestricted stock at the time of receipt, less any amount paid for the shares. If restricted stock for which a Section 83(b) election has been made is subsequently forfeited, the holder will not be able to recover any taxes that elected them could create partisanship and divisiveness among Board members and impair the Board’s ability to operate effectivelywere paid as a governing body,result of such election. If the election is not made, the holder will generally recognize ordinary income, on the date that the restrictions to which the restricted stock is subject are removed, in an amount equal to the detrimentfair market value of allsuch shares on such date, less any amount paid for the shares. At the time the holder recognizes ordinary income, BD shareholders. For these reasons, cumulative voting also may interfere with the Corporate Governance and Nominating Committee’s ongoing efforts to develop and maintain a Board of Directors possessing the wide range of skills, characteristics and experience, and a team-oriented ethic, necessary to best serve all shareholders’ interests.The Board believes that BD’s current system of electing directors, with each sharegenerally will be entitled to one vote for each nominee, will continue to work successfullya deduction in the future, as itsame amount. Generally, upon a sale or other disposition of restricted stock with respect to which the holder has recognized ordinary income (i.e., a Section 83(b) election was previously made or the restrictions were previously removed), the holder will recognize capital gain or loss in an amount equal to the difference between the amount realized on such sale or other disposition and the holder’s basis in such shares. Such gain or loss will be long-term capital gain or loss if the holding period for such shares is more than one year.past. same amount.Board consists predominantlyfollowing table provides certain information as of independent, non-management directors,September 30, 2012 regarding BD’s equity compensation plans. (a)
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights (b)
Weighted-average
exercise price of
outstanding
options, warrants
and rights(1) (c)
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a)) 16,403,718 (2) $ 67.58 4,683,602 (3) 1,913,084 (4) $ 32.07 0 (5) 18,259,022 $ 67.55 5,776,296 (1) Shares issuable pursuant to outstanding awards of Performance Units and other restricted stock units under the 2004 Plan and BD’s Stock Award Plan, as well as shares issuable under BD’s 1996 Directors’ Deferral Plan, Deferred Compensation and Retirement Benefit Restoration Plan and Global Share Investment Program (“GSIP”), are not included in the calculation of weighted-average exercise price, as there is no exercise price for these shares. (2) Includes (i) 11,739,510 shares issuable under outstanding stock options and stock appreciation rights (“SARs”), (ii) 2,185,388 shares issuable under Performance Unit awards and 2,390,128 shares issuable under time-vested unit awards granted under the 2004 Plan, and (iii) 88,692 shares issuable under restricted stock unit awards granted under the Stock Award Plan. The weighted average remaining term of the outstanding options and SARs is 5.66 years. (3) Represents shares available for issuance under the 2004 Plan and includes 2,201,867 shares available for “full share” awards, assuming payout of outstanding Performance Units at target. The 1994 Restricted Stock Plan for Non-Employee Directors was terminated in September 2012. (4) Includes 11,124 shares issuable pursuant to outstanding stock options granted under BD’s Non-Employee Directors 2000 Stock Option Plan. Also includes 99,557 shares issuable under BD’s 1996 Directors’ Deferral Plan, 440,451 shares issuable under BD’s Deferred Compensation and Retirement Benefit Restoration Plan, and 1,361,952 shares issuable under the GSIP, based on participant account balances as of September 30, 2012. (5) Not shown are shares issuable under the 1996 Directors’ Deferral Plan, the Deferred Compensation and Retirement Benefit Restoration Plan or the GSIP. There are no limits on the number of shares issuable under these plans, and the number of shares that may become issuable will depend on future elections made by plan participants. Board Committee responsible for identifyingDeferred Compensation and recommending qualified individuals for director consists solely of independent, non-management directors. This ensures that the Board will continue to exercise independent judgment and remain accountable to all BD shareholders, rather than to a particular group.The Board also believes that cumulative voting is unnecessary in light of BD’s strong corporate governance practices that help ensure that the Board will maintain an independent perspective. BD’s Corporate Governance Principles demonstrate the many ways in which the Board and BD are responsive and accountable to all of BD’s shareholdersRetirement Benefit Restoration Plan can be found beginning on an ongoing basis. These provisions (more fully discussed in the Corporate Governance sectionpage 47 of this proxy statementstatement. The shares held in the plan as of September 30, 2012 include 81,328 shares acquired by participants through cash deferrals and 359,123 shares deferred under participants’ equity compensation awards. In the event a participant elects to have cash compensation deferred in a BD common stock account, the participant’s account is credited with a number of shares based on pages 17-23) coverthe prevailing market price of the BD common stock. The cash deferred by the participant is used to purchase the shares of BD common stock on the open market, which are then held in a wide arraytrust.subject areas, including:• The designation of a Lead Director;• Evaluations of the Chief Executive Officer and the Board;• Procedures to address situations where director nominees fail to receive a majority affirmative vote in an uncontested election;• Conflicts of interest and ethics compliance;• The expiration without renewal or replacement of BD’s shareholder rights plan (“poison pill”);• Annual election of all directors starting in 2011; and• Certain disclosure practices regarding many of the subjects discussed in the Corporate Governance section of this proxy statement.ACCORDINGLY, the United States. The purpose of the GSIP is to provide non-U.S. associates with a means of saving on a regular and long-term basis and acquiring a beneficial interest in BD common stock. Participants may contribute a portion of their base pay, through payroll deductions, to the GSIP for their account. BD provides matching funds of up to 3% of a participant’s base pay through contributions to the participant’s plan account. Contributions to the GSIP are used to purchase shares of BD common stock on the open market, which are then held in a trust.AGAINSTFOR PROPOSAL 6.55SHAREHOLDER PROPOSALS OR DIRECTOR NOMINATIONS FOR 20122014 ANNUAL MEETING20122014 Annual Meeting pursuant to SECRule 14a-8 must be received by BD not later than August 23, 2011.2013. Notice of any other proposal or director nomination that a shareholder wishes to proposesubmit for consideration at the 20122014 Annual Meeting pursuant to BD’s By-Laws must be delivered to BD not earlier than October 4, 20111, 2013 and not later than November 3, 2011.October 31, 2013. Such other proposal or director nomination also must satisfy the information and other requirements specified in BD’s By-Laws, which are available on BD’s website atwww.bd.com/investors/corporate—governance/ corporate_governance/.Any shareholder proposal or director nomination submitted to BD in connection with the 20122014 Annual Meeting should be addressed to: Corporate Secretary, BD, 1 Becton Drive, Franklin Lakes, New Jersey07417-1880.56ARTICLE VI. (A) In addition to any affirmative vote required by law or this Restated Certificate of Incorporation or the By-Laws of the Corporation, and except as otherwise expressly provided in Section (B) of this Article VI, a Business Combination (as hereinafter defined) shall require the affirmative vote of not less than eighty percent (80%) of the votes entitled to be cast by the holders of all then outstanding shares of Voting Stock (as hereinafter defined), voting together as a single class. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage or separate class vote may be specified, by law or in any agreement with any national securities exchange or otherwise.26,800,00033,800,000 shares, subject to adjustment as provided below. Notwithstanding the foregoing and subject to adjustment as provided in Section 5(e), (i) no Participant may receive Options and Stock Appreciation Rights under the Plan in any calendar year that relate to more than 250,000 Shares, (ii) the maximum number of Shares with respect to which unrestricted Awards (either as to vesting, performance or otherwise) may be made to employees under the Plan is 450,000 Shares, and (iii) the maximum number of Shares that may be issued with respect to any Awards granted on or after February 2, 2010 that are not Awards of Options or Stock Appreciation Rights shall be4,840,000 7,340,000.the tenth anniversary of the effective dateJanuary 29, 2023. However, unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award theretofore granted may extend beyond such date, and the authority of the Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award, or to waive any conditions or rights under any such Award, and the authority of the Board to amend the Plan, shall extend beyond such date.DIRECTIONS TO7C...7C…* *7C...7C…* *7C...7C…* * 
7C...7C…* *7C...7C…* *7C...7C…* *West,West. Continue to Exit 48, Rte. 24 West. Take Exit 7C...7C…* *7C...7C…* *
THE MALL AT SHORT HILLS WILL BE ON YOUR RIGHT. MAKE A LEFT AT THE SECOND
TRAFFIC LIGHT THEN MAKE AN IMMEDIATE LEFT INTO HOTEL DRIVEWAY. 
Electronic Voting InstructionsYou can vote by Internet or telephone!
Available 24 hours a day, 7 days a week!two voting
methods outlined below to vote your proxy.
• Follow the instructions provided by the recorded message. Using ablack inkpen, mark your votes with anXas shown in this example. Please do not write outside the designated areas. x 26, 2011.23, 2013. Voting Instructionsinstructions submitted by all other BOBD plan participants must be received by 12:00 p.m., EST, on January 28, 2011.25, 2013. All proxies submitted by record holders through the Internet or telephone must be received by 11:00 a.m., EST, on February 1, 2011.January 29, 2013.
A Proposals — The Board of Directors recommends a voteFOR all the nominees listed andFOR Proposals 2, 3, 4 and 5. For Against Abstain For Against Abstain For Against Abstain + 01 - Basil L. Anderson ¨ ¨ ¨ 06 - Claire M. Fraser ¨ ¨ ¨ 11 - James F. Orr ¨ ¨ ¨ 02 - Henry P. Becton, Jr. ¨ ¨ ¨ 07 - Christopher Jones ¨ ¨ ¨ 12 - Willard J. Overlock, Jr. ¨ ¨ ¨ 03 - Catherine M. Burzik ¨ ¨ ¨ 08 - Marshall O. Larsen ¨ ¨ ¨ 13 - Rebecca W. Rimel ¨ ¨ ¨ 04 - Edward F. DeGraan ¨ ¨ ¨ 09 - Adel A.F. Mahmoud ¨ ¨ ¨ 14 - Bertram L. Scott ¨ ¨ ¨ 05 - Vincent A. Forlenza ¨ ¨ ¨ 10 - Gary A. Mecklenburg ¨ ¨ ¨ 15 - Alfred Sommer ¨ ¨ ¨ For Against Abstain For 
Vote by Internet· Log onAbstain¨ ¨ ¨ InternetCompany’s Restated¨ ¨ ¨ ¨ ¨ ¨ go¨ ¨ ¨ B Authorized Signatures — This section must be completed for your vote to www.investorvote.com/BDX· Followbe counted. — Date and Sign BelowPlease sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, custodian, or other representative capacity, please give full title. steps outlined onbox.secured website.box. / / IF VOTING BY MAIL, COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD. 
Vote by telephone· Within the USA, US territories & Canada, call toll free 1-800-652-VOTE (8683) on a touch tone telephone. There isNO CHARGEto you for the call.· Outside the USA, US territories & Canada, call 1-701-575-2300 on a touch tone telephone. Standard rates will apply. Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas.x· Follow the instructions provided by the recorded message. Annual Meeting Proxy/Voting Instruction Card
▼IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.▼A Proposals — The Board of Directors recommends a vote FOR all the nominees listed; FOR Proposals 2 and 3; andAGAINST Proposals 5 and 6.No recommendation is being made by the Board on Proposal 4.1. Election of Directors:ForWithholdForWithholdForWithhold+01 - Basil L. Andersonoo02 - Henry P. Bocton, Jr.oo03 - Edward F. DeGraanoo04 - Claire M. Fraser-Liggettoo05 - Christopher Jonesoo06 - Marshall O. Larsenoo07 - Edward J. Ludwigoo08 - Adel A.F. Mahmoudoo09 - Gary A. Mecklenburgoo10 - Cathy E. Minehanoo11 - James F. Orroo12 - Willard J. Overlock, Jr.oo13 - Bertram L. Scottoo14 - Alfred SommerooForAgainstAbstain ForAgainstAbstain2.Ratificationselectionconvenient ways by which you can vote or direct the voting of Independent registered public accounting firm.ooo3. Advisoryyour shares. You can vote on executive compensation.ooo1 Yr2 Yrs3 YrsAbstainForAgainstAbstain4.Advisoryyour shares 24 hours a day, 7 days a week, using either a touch-tone telephone or through the Internet. Your telephone or Internet vote authorizes the proxies named on the frequency of executive compensation advisory votes.o ooo5. Special shareholder meetings.ooobelow proxy/voting instruction card in the same manner as if you marked, signed, dated and returned the proxy/voting instruction card. If you choose to vote your shares by telephone or through the Internet, there is no need to mail back your proxy/voting instruction card. To vote your shares electronically, please have this voting form in hand and follow the instructions outlined on the reverse side. ForAgainstAbstain6.Cumulative Voting.oooIF VOTING BY MAIL, COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD.
Dear Shareholder:Becton, Dickinson and Company (BD) encourages you to take advantage of convenient ways by which you can vote your shares. You can vote your shares 24 hours a day, 7 days a week, using either a touch-tone telephone or through the Internet. Your telephone or Internet vote authorizes the proxies named on the below proxy/voting instruction card in the same manner as if you marked, signed, dated and returned the proxy/voting instruction card. If you choose to vote your shares by telephone or through the Internet, there is no need to mail back your proxy/voting instruction card. To vote your shares electronically, please have this voting form in hand and follow the instructions outlined on the reverse side.Your vote is Important. Thank you for voting.▼IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.▼ + Proxy Solicited on Behalf of the Board of Directors for the Annual Meeting on February 1, 2011The undersigned hereby appoints Edward J. Ludwig, David V. Elkins, Jeffrey S. Sherman and Dean J. Paranicas, and any of them, with full power of substitution, proxies to attend the Annual Meeting of Shareholders of the Company to be held at 1:00 p.m. EST on Tuesday, February 1, 2011 at the Hilton Short Hills, 41 John F. Kennedy Parkway, Short Hills, New Jersey, and any adjournment thereof, and to vote all shares of the common stock of the Company which the undersigned is untitled to vote upon each of the matters referred to in this proxy and, in their discretion, upon such other matters as may properly come before the meeting.For plan participants. This card constitutes voting instructions to the respective trustees for any shares of common stock allocated to the undersigned under the Company’s 1996 Directors’ Deferral Plan (“DDP”), the Company’s Deferred Compensation and Retirement Benefit Restoration Plan (“DCP”). The Med-Safe Systems, Inc. Savings Incentive Plan (the “Med-Safe Plan”) and, when so provided, the Global Share Investment Program (“GSIP”), and also constitutes voting instructions to the trustees for a proportionate number of shares of common stock in the DDP, DCP, the Med-Safe Plan and GSIP for which voting instructions have not been received. This card also constitutes voting instructions to the trustee for any shares of common stock allocated to the undersigned under the Company’s Savings Incentive Plan (“SIP”). Shares for which no voting instructions have been received by the SIP trustee will be voted in the same proportion as those for which timely instructions have been received.You are encouraged to specify your choices by marking the appropriate boxes, SEE REVERSE SIDE, but you need not mark a box for any particular Proposal if you wish to vote in accordance with the Board of Directors’ recommendation for that Proposal. If you do not vote by telephone or over the Internet, please sign and return this card using the enclosed envelope.(Items to be voted appear on reverse side.)C Non-Voting Items BNon-Voting ItemsChange of Address— Please print your new address below. Mark the box to the right if you plan to attend the Annual Meeting (for record holders only). oC¨Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign BelowPlease sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, custodian, or other representative capacity, please give full title. Date (mm/dd/yyyy) — Please print date below.Signature 1 — Please keep signature within the box.Signature 2 — Please keep signature within the box. / / §IF VOTING BY MAIL, COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD. +