UNITED STATES

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  ¨

Check the appropriate box:

Preliminary Copy

Becton, Dickinson and Company

1 Becton Drive

Franklin Lakes, New Jersey 07417-1880

www.bd.com

December 21, 201219, 2013

Dear Fellow Shareholders:

You are cordially invited to attend the 20132014 Annual Meeting of Shareholders of Becton, Dickinson and Company (“BD”) to be held at 1:00 p.m. EST on Tuesday, January 29, 201328, 2014 at the Hilton Short Hills, 41 John F. Kennedy Parkway, Short Hills,Four Seasons Hotel New Jersey. You will find directions to the meeting on the back cover of the accompanying proxy statement.York, 57 East 57^th Street, New York, New York.

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 Internet 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

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

Becton, Dickinson and Company

1 Becton Drive

Franklin Lakes, New Jersey 07417-1880

December 21, 201219, 2013

The 20132014 Annual Meeting of Shareholders of Becton, Dickinson and Company (“BD”) will be held as follows:

Shares represented by properly executed proxies will be voted in accordance with the instructions specified therein. Shares represented by properly executed proxies that do not provide specific voting instructions will be voted in accordance with the recommendations of theBD’s Board of Directors set forth in this proxy statement.

Important Notice Regarding the Availability of Proxy Materials for the 20132014 Annual Meeting of Shareholders to be held on January 29, 2013.28, 2014. BD’s proxy statement and 20122013 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 7, 201210, 2013 will be entitled to attend and vote at the meeting.

By order of the Board of Directors,

GARY DEFAZIOGary DeFazio

Vice President and Corporate Secretary

Table of Contents

PROXY STATEMENT

20132014 ANNUAL MEETING OF SHAREHOLDERS

Tuesday, January 29, 201328, 2014

BECTON, DICKINSON AND COMPANY

1 Becton Drive

Franklin Lakes, New Jersey 07417-1880

GENERAL INFORMATION

Proxy Solicitation

These proxy materials are being mailed or otherwise sent to shareholders of Becton, Dickinson and Company (“BD”) on or about December 21, 201219, 2013 in connection with the solicitation of proxies by the Board of Directors for BD’s 20132014 Annual Meeting of Shareholders (the “2013 Annual Meeting”) to be held at 1:00 p.m. EST on Tuesday, January 29, 201328, 2014 at the Hilton Short Hills, 41 John F. Kennedy Parkway, Short Hills,Four Seasons Hotel New Jersey.York, 57 East 57^th Street, New York, New York.Important Notice Regarding the Availability of Proxy Materials for the 20132014 Annual Meeting of Shareholders to be held on January 29, 2013.28, 2014. This proxy statement and BD’s 20122013 Annual Report to Shareholders are also available atwww.bd.com/investors/.

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.

Shareholders Entitled to Vote; Attendance at the Meeting

Shareholders of record at the close of business on December 7, 201210, 2013 are entitled to notice of, and to vote at, the meeting. As of such date, there were XXX,XXX,XXX193,977,072 shares of BD common stock outstanding, each entitled to one vote.

If your shares are held in the name of a bank, broker or other nominee (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 bank or brokerage account statement, to be admitted. BD also may request appropriate identification as a condition of admission.

Quorum; Required Vote

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. Directors are elected by a majority of the votes cast at the meeting (Proposal 1). This means that aIf an incumbent director nominee will be elected todoes not receive the requisite vote, he or she must tender his or her resignation, and the Board only ifwill decide whether to accept the number of votes cast forresignation in accordance with the nominee exceeds the number of votes cast against that nominee.process described later in this proxy statement.

Approval of Proposals 2, 3, 4, 5 and 56 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 will not be counted as votes cast, and, accordingly, will have no effect on the outcome of the vote for any of the Proposals.proposals. Proposal 2 is a “discretionary item”, and New York Stock Exchange (“NYSE”) member brokers that do not receive instructions on how to vote from beneficial owners may cast those votes in their discretion.discretion on Proposal 2.

How to Vote

Shareholders of record may 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:

(1)

(2) 

(3) 

Votes cast through the Internet 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 proxy card. If you vote through the Internet 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 23, 2013,22, 2014, and voting instructions submitted by participants in all other BD plans must be received by 12:00 p.m. EST on January 25, 2013.24, 2014. All proxies submitted by record holders through the Internet or by telephone must be received by 11:00 a.m. EST on January 29, 2013.28, 2014.

If you are the beneficial owner of shares held in “street name,”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 Internet 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.

Shares represented by properly executed proxies will be voted in accordance with the instructions specified therein. Shares represented by properly executed proxies that do not specify voting instructions will be voted in accordance with the recommendations of the Board of Directors set forth in this proxy statement.

Savings Incentive Plan (“SIP”)

Participants in SIP, BD’s 401(k) plan, are named fiduciaries. As named fiduciaries, they may instruct the SIP trustee how to vote allthe shares of BD common stock allocated to their SIP accounts. TheShares for which no voting instructions have been received by the SIP trustee will vote the SIP shares for which it has not received instructionsbe voted in the same proportion as the SIPthose shares for which it has received instructions.timely instructions have been received.

Participants in Other Plans

Participants in BD’s Deferred Compensation and Retirement Benefit Restoration Plan (“DCP”(the “Restoration Plan”), the 1996 Directors’ Deferral Plan (“DDP”(the “Directors Deferral Plan”), 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 their plan accounts. The trustees of these plans will vote the plan shares for which they do not receive instructions in the same proportion as the plan shares for which they do receive instructions.

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.

Revocation of Proxies or Change of Instructions

A proxy given by a shareholder of record may be revoked or changed at any time before it is voted by by:

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,”name”, you may submit new voting instructions in the manner provided by your bank, broker or other nominee, or you may vote in person at the meeting in the manner described above under the heading “How to Vote.”

Other Matters

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.

OWNERSHIP OF BD COMMON STOCK

Securities Owned by Certain Beneficial Owners

The following table sets forth as of September 30, 2012,2013, 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 filings with the Securities and Exchange Commission (“SEC”).

Securities Owned by Directors and Management

The following table sets forth as of December 1, 20122013 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 39, and (iii) all nominees for director and executive officers as a group (except that the holdings of Mr. Elkins, who resigned from BD effective November 9, 2012, are shown as of that date).group. 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.

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. BD has a policy that prohibits directors and employees from pledging BD shares or engaging in transactions that are intended to hedge against the economic risk of owning BD shares. None of BD’s directors or executive officers has pledged or hedged against any of the shares listed below have been pledged as security.

BD COMMON STOCK

Section 16(a) Beneficial Ownership Reporting Compliance

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, 20112012 through September 30, 2012,2013, all of its directors and executive officers were in compliance with the reporting requirements of Section 16(a), except that a report regarding Ellen R. Strahlman’s sign-on equity grant, and a report for one report with respect to the November 2011 equity compensation grant made to Gary M. Cohen wastransaction by Stephen Sichak, were inadvertently filed late.

Proposal 1.    ELECTION OF DIRECTORS

Members of our Board of Directors are elected to serve a term of one year and until their successors have been elected and qualified. All of the nominees for director have consented to being named in this proxy statement and to serve if elected. Presented below is biographical information for each of the nominees. Each of the nominees is a current member of BD’s Board, except for Ms. Burzik. It is anticipated thatBoard. Dr. Adel A.F. Mahmoud, who has reached the mandatory retirement age under BD’s Corporate Governance Principles, will retire as a member of the Board will appoint Ms. Burzik as a director prior toeffective at the Annual Meeting. BD does not know of any reason why any nominee would be unable to serve as director. If any nominee is unable to serve, the shares represented by valid proxies will be voted for the election of such other person as the Board may nominate, or the size of the Board may be reduced.

BD directors have a variety of backgrounds, which reflects the Board’s continuing efforts to achieve a diversity of viewpoint, experience, knowledge, ethnicity and gender. As more fully discussed below, director nominees are considered on the basis of a range of criteria, including their business knowledge and background, prominence and reputation in their fields, global business perspective and commitment to strong corporate citizenship. They must also have experience and ability that is relevant to the Board’s oversight role with respect to BD’s business and affairs. Each nominee’s biography includes the particular experience and qualifications that led the Board to conclude that the nominee should serve on the Board.

NOMINEES FOR DIRECTOR

		Basil L. Anderson, 67,68, has been a director since 2004. From 2001 until his retirement in 2006, he served as Vice Chairman of Staples, Inc., a supplier of office products. Prior thereto, he was Executive Vice President – Finance and Chief Financial Officer of Campbell Soup Company. Mr. Anderson also is a director of Hasbro, Inc., Moody’s Corporation and Staples, Inc. He was formerly a director of CRA International, Inc.   Mr. Anderson has an extensive business and financial background as both an operating executive and as a chief financial officer of a major multinational public companies.company. His experience includes strategic, business and financial planning and operations; international operations; and service as a director for public companies in different industries.
		Henry P. Becton, Jr., 69,70, has been a director since 1987. Since 2007, he has served as Vice Chairman of the WGBH Educational Foundation, a producer and broadcaster of public television, radio and Internet programs, and books and other educational media materials. He served as President of WGBH Educational Foundation from 1984 to 2007. Mr. Becton also serves as Lead Director of the Belo Corporation, is a director of Public Radio International, and the PBS Foundation, and is a director/trustee of various DWS mutual funds. He was formerly a director of the PBS Foundation.   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.

		Catherine M. Burzik, 62,63, served as President and Chief Executive Officer of Kinetic Concepts, Inc., a medical device company specializing in the fields of woundcarewound care and regenerative medicine, from 2006 until January 2012 followingwhen the sale of the company.company was taken private. Ms. Burzik currently serves as Chair of the Board of Directors of VitaPath Genetics, Inc.the American College of Wound Healing and as ChairTissue Repair, is a member of the San Antonio Branch of the Dallas Federal Reserve Board.Board, and is a general partner of Targeted Technology Fund II, LP. Previously, Ms. Burzik wasserved as President of Applied Biosystems;Biosystems and as President of Ortho-Clinical Diagnostics, Inc., a Johnson & Johnson company;company, and held senior executive roles at Eastman Kodak Company. Ms. Burzik was formerly a director of Allscripts Healthcare Solutions, Inc. and VitaPath Genetics, 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, 69,70, has been a director since 2003. In 2006, he retired as Vice Chairman – Gillette of the Procter & Gamble Company, a manufacturer of consumer products. Prior thereto, he was Vice Chairman of The Gillette Company, and served as its President and Chief Operating Officer from 2000 until 2003. He also served as Acting Chief Executive Officer of Gillette from October 2000 to February 2001. Mr. DeGraan also is a director of Amica Mutual Insurance Company and a Senior Advisor of Centerview Partners, L.P.   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, 59,60, has been a director since October 2011. He has been2011, and became BD’s Chairman sincein July 2012,2012. He was elected BD’s Chief Executive Officer sincein 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 thirty30 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. Fraser Ph.D,Ph.D., 57,58, has been a director since 2006. Since 2007, she has been Director of the Institute for Genome Sciences and a Professor of Medicine at the University of Maryland School of Medicine in Baltimore, Maryland. From 1998 to 2007, she served as President and Director of The Institute for Genomic Research, a not-for-profit center dedicated to deciphering and analyzing genomes. Dr. Fraser also serves on the Board of the American Association for the Advancement of Science.   Dr. Fraser is a prominent scientist with a strong background in infectious diseases and molecular diagnostics, including the development of novel diagnostics and vaccines. She also brings considerable managerial experience in her field.

		Christopher Jones, 57,58, has been a director since 2010. Mr. Jones retired in 2001 as Chief Executive Officer of JWT Worldwide (previously known as J. Walter Thompson), an international marketing firm. Since 2002, Mr. Jones has been Operating Partner and director at Motion Equity Partners (formerly Cognetas LLP), a pan-European private equity firm. He has been the non-executive Chairman of Results International Group since 2002. He also is a memberChairman of the European Advisory Board of Nardello & Co., chair of the board of The Pavilion Clinic and a member of the Health Advisory Board of The Johns Hopkins University Bloomberg School of Public Health.   Mr. Jones contributes an important international perspective based on his distinguished career as a marketing leader and head of a global marketing firm. He offers substantial marketing, strategic and managerial expertise derived from his broad range of activities in the field.
		Marshall O. Larsen, 64,65, has been a director since 2007. Mr. Larsen retired in July 2012 as Chairman, President and Chief Executive Officer of Goodrich Corporation, a supplier of systems and services to the aerospace and defense industry. Mr. Larsen also is a director of Lowe’s Companies, Inc., United Technologies Corp.Corporation and the Federal Reserve Bank of Richmond, and is a member of The Business Council.Richmond.   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.
		Adel A.F. Mahmoud, M.D., Ph.D, 71, has been a director since 2006. In 2006, Dr. Mahmoud retired as Chief Medical Advisor, Vaccines and Infectious Diseases and member of the Management Committee of Merck & Co., Inc., a pharmaceutical company. From 1999 to 2005, he served as President, Merck Vaccines. In 2007, he joined Princeton University as Professor, Department of Molecular Biology and the Woodrow Wilson School of Public and International Affairs. Dr. Mahmoud also is a director of GenVec, Inc. and Inovio Pharmaceuticals, Inc. He is also a member of the Board of the International AIDS Vaccine Initiative (IAVI). 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, 66,67, has been a director since 2004. In 2006, he retired as President and Chief Executive Officer of Northwestern Memorial HealthCare, the parent corporation of Northwestern Memorial Hospital, a position he had held since 1986. He also served as President of Northwestern Memorial Hospital from 1985 to 2002. He is currently an Executive Partner of Waud Capital Partners, L.L.C., a private equity investment firm. Mr. Mecklenburg is also a director of LHP Hospital Partners, Inc., and was formerly a director of Acadia Healthcare Company, Inc.   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.
		James F. Orr, 67,68, has been a director since 2000. In 2007, he retired as Chairman of the Board of Convergys Corporation, a provider of customer management, employee care and outsourced billing services, a position he had held since 2000. He also served as Convergys’ Chief Executive Officer from 1998 until his retirement in 2007, and also as its President from 1998 to 2005.2007. Mr. Orr also is a director of Ohio National Financial Services, Inc.   Mr. Orr contributes the important insights of a former chief executive officer of a public company. His background reflects extensive managerial, strategic, operational and financial experience from the perspective of a service industry. He also possesses a depth of understanding of corporate governance and enterprise risk management.

		Willard J. Overlock, Jr., 66,67, has been a director since 1999. He retired in 1996 as a partner in Goldman, Sachs & Co., where he served as a member of its Management Committee, and retains the title of Senior Director to The Goldman Sachs Group, Inc. Mr. Overlock also is a trustee of Rockefeller University and a member of the Board of Directors of The Albert and Mary Lasker Foundation.   Mr. Overlock has broad financial and investment banking experience based on his senior leadership roles in these areas. He contributes financial and transactional expertise and acumen in mergers and acquisitions and complex financial transactions.
		Rebecca W. Rimel, 61,62, 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 BioTelemetry, Inc. (formerly CardioNet, Inc.,) and a director/trustee of various DWS mutual funds, and a trustee of Washington College.funds.   Ms. Rimel was added to the Board due to herbrings executive leadership and her extensive experience in public policy and advocacy, particularly in the area of healthcare. She also brings to the Boardoffers the perspective of someone with a strong background in the healthcare field.

		Bertram L. Scott, 61,62, has been a director since 2002. Mr. Scott is the President and Chief Executive Officer of Affinity Health Plan. He previously served as President, U.S. Commercial of CIGNA Corporation from June 2010 to December 2011. Prior thereto, Mr. Scott served as Executive Vice President of TIAA-CREF from 2000 to 2010 and as President and Chief Executive Officer of TIAA-CREF Life Insurance Company from 2000 to 2007. Mr. Scott also is a director of AXA Financial, Inc.   Mr. Scott possesses strong strategic, operational and financial experience from the variety of executive roles in which he has served during his career. He brings experience in corporate governance and business expertise in the insurance and healthcare fields.
		Alfred Sommer, M.D., M.H.S., 70,71, has been a director since 1998. He is Professor of International Health, Epidemiology, and Ophthalmology at The Johns Hopkins University (“JHU”) Bloomberg School of Public Health (the “Bloomberg School”) and the JHU School of Medicine, positions he has held since 1986. He is Dean Emeritus of the Bloomberg School, having served as Dean from 1990 to 2005. He is a member of the National Academy of Sciences and the Institute of Medicine. He is a recipient of the Albert Lasker Award for Medical Research. Dr. Sommer also is a director of T. Rowe Price Group, Inc., and Chairman of the Board of Directors of The Albert and Mary Lasker Foundation.   Dr. Sommer is a renowned clinician, researcher and academic administrator with substantial and broad experience in medicine and the public health field, and has valuable board experience in the for-profit and nonprofit realms. These attributes enable him to offer deep insights into global healthcare issues and medical technology.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES FOR DIRECTOR.

BOARD OF DIRECTORS

The Board and Committees of the Board

BD is governed by a Board of Directors that currently consists of 1415 members, 1314 of whom have been determined by the Board to be independent. The Board has established four operating committees (the “Committees”): the Audit Committee; the Compensation and Benefits Committee (the “Compensation Committee”); the Corporate Governance and Nominating Committee (the “Governance Committee”); and the Science, Marketing, Innovation and Technology Committee. These Committees meet regularly. The Board has also established an Executive Committee that meets only as 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 20122013 Annual Report on Form 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,Becton, Dickinson and Company, 1 Becton Drive, Franklin Lakes, New Jersey 07417-1880, telephone 201-847-6800.

Committee Membership and Function

Set forth below is a summary description of each of the Board’s Committees.

AUDIT COMMITTEE

Function

The Board has determined that the members of the Audit Committee meet the independence and financial literacy and expertise requirements of the NYSE for audit committee members. The Board also has determined that each of Messrs. Anderson, Larsen, Orr and Scott and Ms. Burzik qualifies as an “audit committee financial expert” under the rules of the SEC.

COMPENSATION AND BENEFITS COMMITTEE

Function

The Board has determined that each member of the Compensation Committee meets the independence requirements of the NYSE for compensation committee members.

Procedure for Determining Executive Compensation

The Compensation Committee oversees the compensation program for the named executive officers listed in the Summary Compensation Table on page 39 and for BD’s other executive officers. The Compensation Committee recommends compensation actions regarding the CEO to the other independent directors and has the authority to take compensation actions with respect to BD’s other executive officers. The Compensation Committee may not delegate these responsibilities to another Committee, an individual director or members of management.

Role of Management

The Compensation Committee’s meetings are typically attended by BD’s CEO, Senior Vice President—Human Resources and others who support the Compensation Committee in fulfilling its responsibilities. The Compensation 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 Compensation 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 CEO and Senior Vice President—Human Resources also work with the Compensation Committee chair in establishing meeting agendas.

The Compensation Committee meets in executive session with no members of management present for part of each of its regular meetings. The Compensation Committee also meets in executive session when considering compensation decisions regarding our executive officers.

Role of the Independent Consultant

The Compensation Committee is also assisted in fulfilling its responsibilities by its independent 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 or any factor that would otherwise impair the independence of Pay Governance relating to the services performed by Pay Governance for the Compensation Committee. During fiscal year 2013, 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 BD or BD’s management without the Compensation Committee’s prior approval, and has expressed its intention that such approval will be given only in exceptional cases. No other consultant was used by the Compensation Committee with respect to the 2013 compensation of BD’s executive officers.

Pay Governance reviews all materials prepared for the Compensation Committee by management, prepares additional materials as may be requested by the Compensation Committee, and attends Compensation Committee meetings. In its advisory role, Pay Governance assists the Compensation Committee in the design and implementation of BD’s compensation program. This includes assisting the Compensation Committee in selecting the key elements to include in the program, the targeted payments for each element, and the establishment of performance targets. In particular with respect to 2013 compensation, Pay Governance assisted the Compensation Committee in its review of the performance metrics and targets under BD’s Performance Incentive Plan and performance-based equity compensation. This assistance included providing information on trends and best practices in the area of executive compensation and the compensation practices at peer companies. To assist it in developing recommendations to the Compensation Committee regarding the appropriate performance metrics under BD’s incentive compensation, BD management engaged Exequity as its advisor. Exequity advised BD management on a range of potential performance metrics and modeled payouts under various scenarios for different metrics and performance targets.

Pay Governance also provides market comparison data, which is one of the factors considered by the Compensation Committee in making compensation decisions, and makes recommendations to the Compensation Committee regarding the compensation of BD’s CEO. Pay Governance also conducts an annual review of the compensation practices of select peer companies. Based on this review, Pay Governance advises the Compensation Committee with respect to the competitiveness of BD’s compensation program in comparison to industry practices, and identifies any trends in executive compensation.

Setting Compensation

At the end of each fiscal year, the independent directors conduct a review of the CEO’s performance. At the following Board meeting, the independent directors set the compensation of the CEO after considering the results of the review, market comparison data and the recommendations of the Compensation Committee. Neither the CEO nor any other members of management are present during this session. The CEO does not play a role in determining or recommending his own compensation.

The Compensation Committee is responsible for determining the compensation of BD’s other executive officers. The CEO, in consultation with the Senior Vice President—Human Resources, reviews the performance of the other executive officers with the Compensation Committee and makes compensation recommendations for its consideration. The Compensation Committee determines the compensation for these executives, in consultation with Pay Governance, after considering the CEO’s recommendations and market comparison data regarding compensation levels among peer companies. All decisions regarding the compensation of BD’s other executive officers are made in executive session.

The Board has delegated responsibility for formulating recommendations regarding non-management director compensation to the Governance Committee, which is discussed below.

SCIENCE, MARKETING, INNOVATION AND TECHNOLOGY COMMITTEE

Function

Members		Alfred Sommer—Chair Henry P. Becton, Jr. Catherine M. Burzik Claire M. Fraser Christopher Jones Adel A.F. Mahmoud Gary A. Mecklenburg Rebecca W. Rimel Following the Annual Meeting, this Committee will be chaired by Claire M. Fraser.

CORPORATE GOVERNANCE AND NOMINATING COMMITTEE

Function

The Board has determined that each member of the Governance Committee meets the independence requirements of the NYSE. As stated above, the Governance Committee reviews the compensation program for the non-management directors and makes recommendations to the Board regarding their compensation, and may not delegate these responsibilities to another Committee, an individual director or members of management. The Governance Committee has retained Pay Governance as an independent consultant for this purpose. Pay Governance’s responsibilities include providing market comparison data on non-management director compensation at peer companies, tracking trends in non-management director compensation practices, and advising the Governance 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 or any other factor that would impair Pay Governance’s independence. Executive officers do not play any role in either determining or recommending non-management director compensation.

Board, Committee and Annual Meeting Attendance

The Board and its Committees held the following number of meetings during fiscal year 2013:

The Executive Committee did not meet during fiscal year 2013.

Each director attended 75% or more of the total number of meetings of the Board and the Committees on which he or she served during fiscal year 2013. BD’s non-management directors met in executive session at each of the Board meetings held during fiscal year 2013.

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. All of the directors attended BD’s 2013 Annual Meeting of Shareholders.

Non-Management Directors’ Compensation

The Board believes that providing competitive compensation is necessary to attract and retain qualified non-management directors. The key elements of BD’s non-management director compensation are a cash retainer, equity compensation, Committee chair fees and Lead Director fees. Of the base compensation paid to the non-management directors (which does not include Committee chair and Lead Director fees), approximately two-thirds currently is equity-based compensation that directors are required to retain until they complete their service on the Board. See “Corporate Governance—Significant Governance Practices—Equity Ownership by Directors” on page 19. This retention feature serves to better align the interests of the directors and BD shareholders and ensure compliance with the director share ownership guidelines. Mr. Forlenza does not receive compensation related to his service as a director.

Cash Retainer

Each non-management director currently receives an annual cash retainer of $81,000 for services as a director. Directors do not receive meeting attendance fees.

Equity-Based Compensation

Each non-management director elected at an Annual Meeting of Shareholders is granted restricted stock units then valued at $162,000 (using the same methodology used to value awards made to executive officers). Directors newly elected to the Board receive a restricted stock unit grant that is prorated from the effective date of their election to the next Annual Meeting of Shareholders. The shares of BD common stock underlying the restricted stock units are not issuable until a director’s separation from the Board.

Committee Chair/Lead Director Fees

An annual fee of $10,000 is paid to each Committee chair, except that the fee for the Audit Committee chair is $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 chair of the Executive Committee.

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. Per SEC rule, no compensation is attributed to the directors for these flights in the table below, since the aggregate incremental costs of spousal travel were minimal. 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.

Directors are eligible, on the same basis as BD associates, to participate in BD’s Matching Gift Program, pursuant to which BD matches contributions made to qualifying nonprofit organizations. The aggregate annual limit per participant is $5,000.

The following table sets forth the compensation received by BD’s non-management directors during fiscal year 2013.

Fiscal Year 2013 Non-Management Directors’ Compensation

COMPENSATION AND BENEFITS COMMITTEEEach non-management director currently receives an annual cash retainer of $81,000 for services as a director. Directors do not receive meeting attendance fees.

FunctionEquity-Based Compensation

Each non-management director elected at an Annual Meeting of Shareholders is granted restricted stock units then valued at $162,000 (using the same methodology used to value awards made to executive officers). Directors newly elected to the Board receive a restricted stock unit grant that is prorated from the effective date of their election to the next Annual Meeting of Shareholders. The shares of BD common stock underlying the restricted stock units are not issuable until a director’s separation from the Board.

Committee Chair/Lead Director Fees

An annual fee of $10,000 is paid to each Committee chair, except that the fee for the Audit Committee chair is $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 chair of the Executive Committee.

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. Per SEC rule, no compensation is attributed to the directors for these flights in the table below, since the aggregate incremental costs of spousal travel were minimal. 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.

Directors are eligible, on the same basis as BD associates, to participate in BD’s Matching Gift Program, pursuant to which BD matches contributions made to qualifying nonprofit organizations. The aggregate annual limit per participant is $5,000.

The following table sets forth the compensation received by BD’s non-management directors during fiscal year 2013.

Fiscal Year 2013 Non-Management Directors’ Compensation

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 2013. Stock options have not been issued to non-management directors since 2005.

(3)	Represents interest on deferred directors’ fees in excess of 120% of the federal long-term rate.

Changes to Non-Management Directors’ Compensation

During fiscal year 2013, the Board undertook a review of director compensation, with the assistance of Pay Governance. 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 used in this analysis was the same as the peer group used for BD’s executive compensation analysis and included the following companies: Agilent Technologies, Inc.; Allergan, Inc.; C.R. Bard, Inc.; Baxter International 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 changes to the compensation of BD’s non-management directors, effective at the conclusion of the 2014 Annual Meeting, so as to better align its compensation with the non-management director compensation being paid by the peer group companies:

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 Directors’ Deferral Plan. Directors may also defer receipt of shares issuable to them under their restricted stock unit awards upon leaving the Board. A general description of the Directors’ Deferral Plan appears on page 63.

Communication with Directors

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:

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 that are unrelated to a director’s duties and responsibilities as a Board member may be excluded by our corporate security department, including, without limitation, solicitations and advertisements, junk mail, product-related communications, job referral materials and resumes, surveys, and material that is determined to be illegal or otherwise inappropriate.

CORPORATE GOVERNANCE

Corporate Governance Principles

BD’s commitment to good corporate governance is embodied in our Corporate Governance Principles (the “Principles”). The Principles set forth the Board’s views and practices regarding a number of governance topics, and the Governance Committee assesses the Principles on an ongoing basis in light of current practices. 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, Becton, Dickinson and Company, 1 Becton Drive, Franklin Lakes, New Jersey 07417-1880, phone 201-847-6800.

Board Leadership Structure

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 context of the individuals involved and the specific circumstances facing a company. Accordingly, what the Board believes is the right board leadership structure may vary as circumstances warrant.

At the present time, the Board believes that the most effective leadership structure for BD is for our CEO to also serve as Chairman. This combined role allows one person to speak for and lead the company and the Board, creates clear lines of authority and accountability, and provides the necessary leadership to execute BD’s strategy. Mr. Forlenza’s over 30 years of experience at BD and knowledge of its complex businesses, along with his extensive industry expertise, also make him uniquely qualified to lead the Board on the most important issues facing the company.

At the same time, the role of Lead Director, currently being served by Henry P. Becton, Jr., allows the non-management directors to provide effective, 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. Under the Principles, the Lead Director:

The Board believes that 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 the day-to-day management of the business. As such, this structure provides independent Board leadership and engagement, while deriving the benefit of having the CEO also serve as Chairman.

Board’s Oversight of Risk

BD’s management engages in a process referred to as enterprise risk management (“ERM”) to identify, assess, manage and mitigate a broad range of risks across BD’s 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 the process is functioning effectively and is consistent with BD’s business 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. Particular risks are then often reviewed in-depth with the Audit Committee or the full Board at subsequent meetings.

In addition, the full Board reviews the risks associated with BD’s strategic plan and discusses the appropriate levels of risk in light of BD’s objectives. This is done through an annual strategy review process, 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 CEO and other members of senior management.

The various Committees of the Board are also responsible for monitoring and reporting on risks associated with their respective areas of 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 Committee oversees risks associated with BD’s compensation practices and programs, and the Governance Committee oversees risks relating to BD’s corporate governance practices, including director independence, related person transactions and conflicts of interest. In 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, Senior Vice President–Human Resources, General Counsel, Senior Vice President–Regulatory Affairs, Chief Ethics and Compliance Officer and other members of senior management.

Risk Assessment of Compensation Programs

With respect to our compensation policies and practices, BD’s management has 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, management reviewed the design of BD’s compensation and benefits programs (in particular, our performance-based compensation programs) and related policies, recommendspotential risks that could be created by the compensationprograms, and features of our programs and corporate governance generally that help to mitigate risk. Among the Chief Executive Officer tofactors considered were the independent membersmix of the Board for their approval,cash and approves the compensation of BD’s other executive officers.

The Board has determinedand of fixed and variable compensation, paid to our associates; the balance between short- and long-term objectives in our incentive compensation; the performance targets, mix of performance metrics, vesting periods, threshold performance requirements and funding formulas related to our incentive compensation; the degree to which programs are formulaic or provide discretion to determine payout amounts; caps on payouts; our clawback and share ownership policies; and our general governance structure. Based on this review, we believe that each member of the Compensation Committee meets the independence requirements of the NYSE.our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on BD.

Procedure for Determining Executive CompensationDirector Nomination Process

The CompensationGovernance Committee oversees the compensation programreviews potential director candidates and recommends nominees for the named executive officers listed in the Summary Compensation Table on page 39 and for BD’s other executive officers. The Compensation Committee recommends compensation actions regarding the Chief Executive Officerdirector to the full Board for approval. In making its recommendations, the Governance Committee assesses the overall composition of the Board, including diversity, age, skills, international background, and is delegatedexperience and prominence in areas of importance to BD. The Board seeks to achieve among its directors a diversity of viewpoint, experience, knowledge, ethnicity and gender that fits the authority to take compensation actionsneeds of the Board at that particular time.

When considering individual director candidates, the Governance Committee will seek individuals with respect tobackgrounds 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. From time-to-time, the Governance Committee has retained an executive officers. search firm to assist it in its efforts to identify and evaluate potential director candidates.

The CompensationGovernance Committee maybelieves that any nominee for director must meet the following minimum qualifications:

The Governance Committee anassesses 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 orevaluation process, the Governance Committee reports its conclusions and recommendations for nominations to the full Board.

It is the Governance 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 Governance Committee utilizes the same criteria for evaluating candidates irrespective of management.their source.

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, Becton Dickinson and Company, 1 Becton Drive, Franklin Lakes, New Jersey 07417-1880.

Significant Governance Practices

Described below are some of the significant corporate governance practices that have been instituted by the BD Board.

RoleAnnual Election of ManagementDirectors

BD’s directors are elected annually. The Compensation Committee’s meetings are typically attended by BD’s Chief Executive Officer, Senior Vice President—Human Resources and others who supportBoard believes that annual elections of directors reflect a corporate governance best practice, as it provides shareholders the Compensation Committee in fulfilling its responsibilities. The Compensation Committee considers management’sopportunity to express their views relating to compensation matters, includingon the performance metrics and targets for BD’s performance-based compensation. Management also provides information (which is reviewed by our Internal Audit Department) to assistof 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 Committee chair in establishing meeting agendas.

The Compensation Committee meets in executive session with no members of management present for part ofentire Board each of its regular meetings. The Compensation Committee also meets in executive session when considering compensation decisions regarding our executive officers.year.

RoleVoting 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 Independent Consultantvotes cast in order to be elected to the Board of Directors. Any incumbent director who fails to receive the requisite affirmative vote is required to offer to submit his or her resignation to the Board following the shareholder vote. The Governance Committee will consider and recommend to the Board whether to accept the resignation offer. The Board will act on such recommendation and publicly disclose its decision within 90 days following the shareholder vote. 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, and enables it to avoid undesirable and disruptive governance consequences.

Board Self-Evaluation

The Compensation Committee is also assisted in fulfilling its responsibilities by its independent 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’s management. The Compensation Committee has adopted a policy prohibiting Pay Governance from providing any services to BD’s

management without the Compensation Committee’s prior approval, and 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 the named executive officers.

Pay Governance reviews all materials prepared for the Compensation Committee by management, prepares additional materials as may be requested by the Compensation Committee, and attends Compensation Committee meetings. In its advisory role, among other things, Pay Governance assists the Compensation Committee in the design and implementation of BD’s compensation program. This includes assisting the Compensation 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, which is one of the factors considered by the Compensation Committee in making compensation decisions, and makes recommendations to the Compensation Committee regarding the compensation of BD’s Chief Executive Officer.

Pay Governance also conducts an annual review of the compensation practices of select peer companies. Based on this review, Pay Governance advises the Compensation Committee with respect to the competitiveness of BD’s compensation program in comparison to industry practices, and identifies any trends in executive compensation.

Setting Compensation

At the end of each fiscalEach year the Board conducts a reviewself-evaluation of its performance and effectiveness. As part of this process, each director completes an evaluation form on specific aspects of the Chief Executive Officer’s performance. AtBoard’s role, organization and meetings. The collective comments are then presented by the following Board meeting, the Board sets the compensation of the Chief Executive Officer after considering the results of the review, market comparison data and the recommendations of the Compensation 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 his own compensation.

The Compensation 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 Committee and makes compensation recommendations for its consideration. The Compensation 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.

The Board has delegated responsibility for formulating recommendations regarding non-management director compensation to the Governance Committee, which is discussed below.

SCIENCE, INNOVATION AND TECHNOLOGY COMMITTEE

Function

CORPORATE GOVERNANCE AND NOMINATING COMMITTEE

Function

The Board has determined that each memberchair of the Governance Committee meetsto the independence requirementsfull Board. As part of the NYSE. As stated above, the Governance Committee reviews the compensation program for the non-management directors and makes recommendations toevaluation, the Board regarding their compensation, and may not delegate these responsibilities to another Committee, an individual director or members of management. The Governance Committee has retained Pay Governance as an independent consultant for this purpose. Pay Governance’s responsibilities include providing market comparison data on non-management director compensation at peer companies, tracking trends in non-management director compensation practices, and advisingassesses the Governance Committee regarding the components and levels of non-management director compensation. Executive officers do not play any role in either determining or recommending non-management director compensation.

Board, Committee and Annual Meeting Attendance

The Board and its Committees held the following number of meetings during fiscal year 2012:

The Executive Committee did not meet during fiscal year 2012.

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 2012. BD’s non-management directors met in executive session at each of the Board meetings held during fiscal year 2012.

The Board has adopted a policy pursuant to which directors are expected to attend the Annual Meeting of Shareholdersprogress in the absenceareas 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 Committee conducts an annual self-evaluation of its performance through a scheduling conflict or other valid reason. All but one of the fifteen directors then serving attended BD’s 2012 Annual Meeting of Shareholders.

Non-Management Directors’ CompensationEquity Ownership by Directors

The Board believes that providing competitive compensation is necessary to attract and retain qualified non-management directors. The key elementsdirectors should hold meaningful equity ownership positions in BD. To that end, a significant portion of BD’s non-management director compensation is in the form of restricted stock units that are not distributable until a cash retainer, equity compensation, Committee chair fees and Lead Director fees. Of the base compensation paid to the non-management directors (which does not include Committee chair and Lead Director fees), approximately two-thirds currently is equity compensation that directors are required to retain until they complete theirdirector completes his or her service on the Board. See “Corporate Governance—Significant Governance Practices—Equity Ownership by Directors” on page 20. This retention feature servesThe Board believes that 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 five times the annual cash retainer and must comply with the guidelines within three years of joining the Board. All of our non-management directors either have achieved the required share ownership or are within the three-year grace period.

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 BD’s Matching Gift Program) to entities with which BD’s directors and executive officers, or their families, are affiliated must be approved by the Governance Committee. In addition, BD posts on its website, atwww.bd.com/investors/corporate_governance/, an Annual Report of Charitable Contributions (the “Contributions Report”) listing all 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 includes a discussion of BD’s contributions philosophy and the alignment of BD’s philanthropic activities with its philosophy.

Enterprise Compliance

Under the oversight of the Audit Committee, BD’s enterprise compliance function seeks to ensure that BD has policies and procedures designed to prevent and detect violations of the many laws, regulations and policies affecting its business, and that BD continuously encourages lawful and ethical conduct. Launched in 2005, BD’s enterprise compliance function supplements the various compliance and ethics functions that are 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 on-line compliance training program focused on BD’s Code of Conduct, 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.

Political Contributions

We prohibit the use of BD corporate funds and assets to support any candidate, political party, ballot measure or referendum campaign, unless approved by the CEO and General Counsel. Contributions outside the United States must also be approved by the relevant country leaders. If an exception is approved, it may only be granted without regard to the personal political affiliations or views of any individual BD associates at any level across the organization.

BD is a member of numerous trade associations that provide a venue for the medical technology sector to work together to advocate its position on issues that impact our industry. In the U.S., the major associations of which BD is a member include AdvaMed and AdvaMedDx, the Healthcare Institute of New Jersey and the California Healthcare Institute. In Europe, BD is a member of MedTech Europe and other national medical device associations. We have informed our major U.S. trade associations that they are not permitted to use any BD fees to support any candidate, political party, ballot measure or referendum campaign, unless approved by BD’s CEO and General Counsel.

Director Independence; Policy Regarding Related Person Transactions

Director Independence. Under the NYSE rules and 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 Governance 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 (“Independence Guidelines”) that are contained in the Principles. The Independence Guidelines set forth certain categories 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 that 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.

The Board has determined that the following nominees 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, Marshall O. Larsen, Adel A.F. Mahmoud, Gary A. Mecklenburg, James F. Orr, Willard J. Overlock, Jr., Rebecca W. Rimel, Bertram L. Scott and Alfred Sommer. Vincent A. Forlenza is an employee of BD and, therefore, is not independent under the NYSE rules and the Principles.

In determining that each of the nominees is independent, the Board reviewed BD’s transactions or other dealings with organizations with which a director may be affiliated. Such affiliations included service by the director as an employee or member of a governing or advisory 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 organization and the amount involved would not impair the director’s independence under the Independence Guidelines. Accordingly, the Board determined that none of these relationships was material or impaired the director’s independence or judgment.

The types of transactions with director-affiliated organizations considered by the Board consisted of payments related to the purchase or sale of products and/or services (in the cases of Anderson, Burzik, Fraser, Jones, Larsen, Mecklenburg, Overlock, Scott, and Sommer), the licensing of intellectual property rights (in the cases of Fraser, Jones, Mahmoud and Sommer) and charitable contributions (in the cases of Messrs. Jones and Sommer).

Related Persons Transactions. The Board has also established a written policy (the “Policy”) requiring Board approval or ratification of transactions involving more than $120,000 per year in which a director, executive officer or shareholder owning more than 5% of BD’s stock (excluding certain passive investors) or their immediate family members has, or will have, a material 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 and transactions available to BD associates generally. The Governance Committee is responsible for the review and approval or ratification of transactions subject to the Policy. The Governance 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 shareholders, and ensurethat do not impact the director’s independence.

During fiscal year 2013, BD paid affiliates of State Street Corporation (“State Street”), a holder of more than 5% of BD common stock, $930,000 for serving as trustee of BD’s 401(k) plan, banking services and investment management of various 401(k) funds. These transactions were not required to be approved under the Policy, since State Street is considered a passive investor in BD.

Code of Conduct

BD maintains a Code of Conduct that is applicable to all directors, officers and associates of BD, including its CEO, 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 Code of Conduct also sets forth procedures for the director share ownership guidelines. Mr. Forlenza does not receive compensation related to his servicecommunicating 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 control and auditing matters.

BD also maintains an Ethics Help Line telephone number (the “Help Line”) for BD associates as a director.means of raising concerns or seeking advice. The Help Line is serviced by an independent contractor and is available to all 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 the investigation of an inquiry. All Help Line inquiries are forwarded to BD’s Chief Ethics and Compliance Officer for investigation. The 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 auditing matters, or any fraud involving management or persons who have a significant role in BD’s internal controls.

The Chief Ethics and Compliance Officer leads the BD Ethics Office, which administers BD’s ethics program. In addition to the Help Line, the ethics program provides for broad communication of BD’s Core Values, associate education regarding the Code of Conduct and its requirements, and ethics training sessions.

Any waivers from any provisions of the Code of Conduct for executive officers and directors will be promptly disclosed to shareholders. In addition, certain amendments to the Code of Conduct, as well as any waivers from certain provisions of the Code of Conduct given to BD’s CEO, Chief Financial Officer or principal accounting officer, will be posted at the website address set forth below.

The Code of Conduct is available on BD’s website atwww.bd.com/investors/corporate_governance/. Printed copies of the Code of Conduct may be obtained, without charge, by contacting the Corporate Secretary, Becton, Dickinson and Company, 1 Becton Drive, Franklin Lakes, New Jersey 07417-1880, phone 201-847-6800.

REPORT OF THE COMPENSATION AND BENEFITS COMMITTEE

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, return on 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:

The 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 on Form 10-K for the fiscal year ended September 30, 2013 and in this proxy statement.

Each non-management director currently receives an annual cash retainer of $81,000 for services as a director. Directors do not receive meeting attendance fees.

EquityEquity-Based Compensation

Each non-management director elected at an Annual Meeting of Shareholders is granted restricted stock units then valued at $162,000 (using the same methodology used to value awards made to executive officers). Directors newly elected to the Board receive a restricted stock unit grant that is pro-ratedprorated from the effective date of their election to the next Annual Meeting.Meeting of Shareholders. The shares of BD common stock underlying the restricted stock units are not issuable until a director’s separation from the Board.

Committee Chair/Lead Director Fees

An annual fee of $10,000 is paid to each Committee chair, except that the fee for the Audit Committee chair is $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.

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. NoPer SEC rule, no compensation is attributed to the directordirectors for these flights in the table below, since the aggregate incremental costs of spousal travel were minimal. 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.

Directors are eligible, on the same basis as BD associates, to participate in BD’s Matching Gift Program, pursuant to which BD matches contributions made to qualifying nonprofit organizations. The aggregate annual limit per participant is $5,000.

The following table sets forth the compensation received by BD’s non-management directors during fiscal year 2012.2013.

Fiscal Year 20122013 Non-Management Directors’ Compensation

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 2012.2013. Stock options have not been issued to non-management directors since the 2005 Annual Meeting.2005.

Changes to Non-Management Directors’ Compensation

During fiscal year 2013, the Board undertook a review of director compensation, with the assistance of Pay Governance. 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 used in this analysis was the same as the peer group used for BD’s executive compensation analysis and included the following companies: Agilent Technologies, Inc.; Allergan, Inc.; C.R. Bard, Inc.; Baxter International 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 changes to the compensation of BD’s non-management directors, effective at the conclusion of the 2014 Annual Meeting, so as to better align its compensation with the non-management director compensation being paid by the peer group companies:

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 unit awards upon leaving the Board. A general description of the 1996 Directors’ Deferral Plan appears on page 62.63.

Communication with Directors

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:

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 that are unrelated to a director’s duties and responsibilities as a Board member may be excluded by our corporate security department, including, without limitation, solicitations and advertisements, junk mail, product-related communications, job referral materials and resumes, surveys, and material that is determined to be illegal or otherwise inappropriate.

CORPORATE GOVERNANCE

Corporate Governance Principles

BD’s commitment to good corporate governance is embodied in our Corporate Governance Principles (the “Principles”). The Principles 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 in light of current practices. The Principles cover a wide range of topics, including voting for directors; board leadership structure; the selection of director nominees; director independence; annual self-evaluations of the Board and its Committees; conflicts of interest; charitable contributions to entities with which BD’s executive officers and directors are affiliated, and other significant governance practices. 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,Becton, Dickinson and Company, 1 Becton Drive, Franklin Lakes, New Jersey 07417-1880, phone 1-201-847-6800.201-847-6800.

Board Leadership Structure

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 context of the individuals involved and the specific circumstances facing a company. Accordingly, what the Board believes is the right board leadership structure may vary as circumstances warrant.

In connection with Vince A. Forlenza’s appointment as Chief Executive Officer in October 2011, succeeding Edward J. Ludwig, Mr. Ludwig continued to serve asAt the Chairman ofpresent time, the Board during Mr. Forlenza’s transitionbelieves that the most effective leadership structure for BD is for our CEO 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 interests to have Mr. Forlenza also serve as Chairman, as this arrangement permits a clear, unified strategic visionChairman. This combined role allows one person to speak for BD that ensures alignment betweenand lead the company and the Board, creates clear lines of authority and management,accountability, and provides clearthe necessary leadership forto execute BD’s strategy. Mr. Forlenza’s over 30 years of experience at BD and helps ensure accountability for BD’s performance. As the individualknowledge of its complex businesses, along with primary responsibility for managing BD’s day-to-day operations and with in-depth knowledge and understanding of BD, Mr. Forlenza is best positionedhis extensive industry expertise, also make him uniquely qualified to lead the Board through reviews of key business and strategic issues.on the most important issues facing the company.

At the same time, the role of Lead Director, currently being served by Henry P. Becton, Jr., allows the non-management directors to provide effective, 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 ofUnder the Principles, the Lead Director include:Director:

The Board believes that 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 the day-to-day management of the business. As such, this structure provides independent Board leadership and engagement, while deriving the benefit of having the Chief Executive OfficerCEO also serve as Chairman.

Board’s Oversight of Risk

BD’s management engages in a process referred to as enterprise risk management (“ERM”) to identify, assess, manage and mitigate a broad range of risks across BD’s 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 the process is functioning effectively and is consistent with BD’s business 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, particularParticular risks are then often reviewed in-depth with the Audit Committee or the full Board at subsequent meetings.

In addition, the full Board reviews the risks associated with BD’s strategic plan and discusses the appropriate levels of risk in light of BD’s objectives. This is done through an annual strategy review process, 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 OfficerCEO and other members of senior management.

The various Committees of BD’sthe Board are also responsible for monitoring and reporting on risks associated with their respective areas of 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 Committee oversees risks associated with BD’s compensation practices and programs, and the Governance Committee oversees risks relating to BD’s corporate governance practices, including director independence, related person transactions and conflicts of interest. In 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, Senior Vice President–Human Resources, General Counsel, Senior Vice President–Regulatory Affairs, Chief Ethics and Compliance Officer and other members of senior management.

Risk Assessment of Compensation Programs

With respect to our compensation policies and practices, BD’s management has 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, management 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 considered were the mix of cash and equity compensation, and of fixed and variable compensation, paid to our associates; the balance between short- and long-term objectives in our incentive compensation; the performance targets, mix of performance metrics, vesting periods, threshold performance requirements and funding formulas related to our incentive compensation; the degree to which programs are formulaic or provide discretion to determine payout amounts; caps on payouts; our clawback and share ownership policies; and our general governance structure. Management reviewed and discussed the results of this assessment with the Compensation 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 BD.

Director Nomination Process

The Governance Committee reviews potential director candidates and recommends nominees for director to the full Board for approval. In making its recommendations, the Governance Committee assesses the overall composition of the Board, including diversity, age, skills, international background, and experience and prominence in areas of

importance to BD. The Board seeks to achieve among its directors a diversity of viewpoint, experience, knowledge, ethnicity and gender that fits the needs of the Board at that particular time.

When considering individual director candidates, the Governance 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. From time-to-time, the Governance Committee has retained an executive search firm to assist it in its efforts to identify and evaluate potential director candidates.

The Governance Committee believes that any nominee for director must meet the following minimum qualifications:

The Governance 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 Governance Committee reports its conclusions and recommendations for nominations to the full Board.

It is the Governance 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 Governance Committee utilizes the same criteria for evaluating candidates irrespective of their source.

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,Becton Dickinson and Company, 1 Becton Drive, Franklin Lakes, New Jersey 07417-1880.

Significant Governance Practices

Described below are some of the significant corporate governance practices that have been instituted by the BD Board.

Annual Election of Directors

BD’s Restated Certificate of Incorporation provides for the annual election of directors.directors are elected annually. The Board believes that annual elections of directors reflect a corporate governance best practice, as it provides shareholders the opportunity to express their views on the performance of the entire Board each year.

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 of Directors. Any incumbent director who fails to receive the requisite

affirmative vote is required to offer to submit his or her resignation to the Board following the shareholder vote. The Governance Committee will consider and recommend to the Board whether to accept the resignation offer. The Board will act on such recommendation and publicly disclose its decision within 90 days following the shareholder vote. 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, and enables it to avoid undesirable and disruptive governance consequences.

Board Self-Evaluation

Each year the Board conducts a self-evaluation of its performance and effectiveness. As part of this process, each director completes an evaluation form on specific aspects of the Board’s role, organization and meetings. The collective comments are then presented by the Chairchair of the Governance 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 Committee conducts an annual self-evaluation of its performance through a similar process.

Equity Ownership by Directors

The Board believes that directors should hold meaningful equity ownership positions in BD. To that end, 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 that 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 five times the annual cash retainer and must comply with the guidelines within three years of joining the Board. All of our non-management directors either have achieved the required share ownership or are within the three-year grace period.

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 BD’s Matching Gift Program) to entities with which BD’s directors and executive officers, andor their families, are affiliated must be approved by the Governance Committee. In addition, BD is required by the Principles to postposts 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.philosophy.

Enterprise Compliance

Under the oversight of the Audit Committee, BD’s enterprise compliance function seeks to ensure that BD has policies and procedures designed to prevent and detect violations of the many laws, regulations and policies affecting its business, and that BD continuously encourages lawful and ethical conduct. Launched in 2005, BD’s enterprise compliance function supplements the various compliance and ethics functions that are 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 on-line compliance training program focused on BD’s Code of Conduct, 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.

Political Contributions

We have a policy that prohibitsprohibit the expenditureuse of companyBD corporate funds and assets forto support any candidate, political campaigns withoutparty, ballot measure or referendum campaign, unless approved by the express authorization of the Chief Executive Officer or Chief Financial Officer, compliance with company policiesCEO and all applicable laws, and clearance from BD’s internal law department.General Counsel. Contributions outside the United States must also be approved by the relevant country leaders. If an exception is approved, it may only be granted without regard to the personal political affiliations or views of any individual BD associates at any level across the organization.

BD is a member of numerous trade associations that provide a venue for the medical technology sector to work together to advocate its position on issues that impact our industry. In 2012, no corporate funds were used to support political campaigns. BD’s general prohibition on the useU.S., the major associations of corporate funds for political campaigns extends to “super PACs”.which BD is a member include AdvaMed and AdvaMedDx, the Healthcare Institute of New Jersey and the California Healthcare Institute. In Europe, BD is a member of MedTech Europe and other national medical device associations. We have also advised theinformed our major industryU.S. trade associations in which BD has membership that we dothey are not authorize thempermitted to use any portion of our duesBD fees to support any candidate, political party, ballot measure or other funds for “super PACs” or any other politicalreferendum campaign, purpose.unless approved by BD’s CEO and General Counsel.

Director Independence; Policy Regarding Related Person Transactions

Director Independence. Under the NYSE rules and 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 Governance 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 (“Independence Guidelines”) that are contained in the Principles. The Independence Guidelines set forth certain categories 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 that 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.

The Board has determined that the following nominees 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, Marshall O. Larsen, Adel A.F. Mahmoud, Gary A. Mecklenburg, James F. Orr, Willard J. Overlock, Jr., Rebecca W. Rimel, Bertram L. Scott and Alfred Sommer. The 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.

In determining that each of the nominees is independent, the Board reviewed BD’s transactions or other dealings with organizations with which a director may be affiliated. Such affiliations included service by the director or an immediate family member as an officer, employee or member of a governing or advisory 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 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 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 is 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.

The types of transactions with director-affiliated organizations considered by the Board consisted of payments related to the purchase or sale of products and/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 (in the cases of Fraser, Jones, Mahmoud and Sommer) and charitable contributions (in the cases of Messrs. Jones Overlock and Sommer).

Related Persons Transactions. The Board has also established a written policy (the “Policy”) requiring Board approval or ratification of transactions involving more than $120,000 per year in which a director, executive officer or shareholder owning more

than 5% of BD’s stock (excluding certain passive investors) or their immediate family members has, or will have, a material 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 and transactions available to BD associates generally, and indemnification and advancement of certain expenses.generally. The Governance Committee is responsible for the review and approval or ratification of transactions subject to the Policy. The Governance 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.

During fiscal year 2012,2013, BD paid affiliates of State Street Corporation (“State Street”), a holder of more than 5% of BD common stock, $870,000$930,000 for serving as trustee of BD’s 401(k) plan, banking services and investment management of various 401(k) funds. These transactions arewere not required to be approved under the Policy, since State Street is considered a passive investor in BD.

Code of Conduct

BD maintains a Code of Conduct (the “Code”) that is applicable to all directors, officers and associates of BD, including its Chief Executive Officer,CEO, 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 Code of Conduct 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 controlscontrol and auditing matters.

BD also maintains 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. Associates using the Help Line may choose to remain anonymous and all inquiries are kept confidential to the extent practicable in connection with the investigation of an inquiry. All Help Line inquiries are forwarded to BD’s Chief Ethics and Compliance Officer for investigation. The 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 auditing matters, or any fraud involving management or persons who have a significant role in BD’s internal controls.

The Chief Ethics and Compliance Officer leads the BD Ethics Office, which administers BD’s ethics program. In addition to the Help Line, the ethics program provides for broad communication of BD’s Core Values, associate education regarding the Code of Conduct and its requirements, and ethics training sessions.

Any waivers from any provisions of the Code of Conduct for executive officers and directors will be promptly disclosed to shareholders. In addition, certain amendments to the Code of Conduct, as well as any waivers from certain provisions of the Code relatingof Conduct given to BD’s Chief Executive Officer,CEO, Chief Financial Officer or principal accounting officer, will be posted at the website address set forth below.

The Code of Conduct is available on BD’s website atwww.bd.com/investors/corporate_governance/. Printed copies of the Code of Conduct may be obtained, without charge, by contacting the Corporate Secretary, BD,Becton, Dickinson and Company, 1 Becton Drive, Franklin Lakes, New Jersey 07417-1880, phone 1-201-847-6800.201-847-6800.

REPORT OF THE COMPENSATION AND BENEFITS COMMITTEE

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, return on 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:

The 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 on Form 10-K for the fiscal year ended September 30, 20122013 and in this proxy statement.

COMPENSATION AND BENEFITS COMMITTEE

Edward F. DeGraan—Chair

Basil L. Anderson

Marshall O. Larsen

James F. Orr

Willard J. Overlock, Jr.

Bertram L. Scott

COMPENSATION DISCUSSION AND ANALYSIS

This section discusses our executive compensation program and the compensation actions taken with respect to the executive officerspersons named in the Summary Compensation Table on page 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.

All references in this section to years are references to our fiscal year, which ends on September 30, unless otherwise noted.

During fiscal year 2013, the role of Chief Financial Officer (“CFO”) was filled initially by David V. Elkins, until he left BD on November 9, 2012. Suketu Upadhyay served as BD’s Acting CFO following Mr. Elkins’ departure until Mr. Reidy joined BD as CFO on July 15, 2013. Accordingly, information regarding the compensation of Messrs. Elkins and Upadhyay is included towards the end of this section, but the focus is on our five currently active named executive officers, and references in this section to our “named executive officers” or “NEOs” are references to Messrs. Forlenza, Reidy, Kozy, Cohen and Sherman.

In this section, in discussing our operating results, awards made under our Performance Incentive Plan (the “PIP”) and the payout of Performance Units, we refer to certain non-GAAP financial measures, including earnings per share from continuing operations (“EPS”) on an adjusted, currency-neutral basis, adjusted currency-neutral revenues and adjusted free cash flow as a percentage of sales. Appendix A to this proxy statement contains reconciliations of these measures to the comparable GAAP financial measures.

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 long-term shareholder returns, and that a competitive compensation plan is critical to that end. Therefore, we intendstrive to provide a competitive compensation package to our executives that ties a significant portion of pay to performance and utilizesuses components that align the interests of our executives with those of BD’s shareholders.

The following is a summary of important aspects of our executive compensation program discussed later in this section.

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Significant performance-based compensation. We emphasize pay-for-performance to align executive compensation with our business strategy and the creation of long-term shareholder value.

Approximately 74% of the total target compensation of our Chief Executive Officer (“CEO”) in 2013 was performance-based.

 

While we emphasize “at risk” pay tied to performance, we believe that our program does not encourage excessive risk taking by management.

 

•

Share retention and hedging policies.Our executives are subject to robust share retention guidelines and are prohibited from pledging BD shares or hedging against the economic risk of such ownership.

•

Limited perquisites. We offer our named executive officers very limited perquisites, and none of them have employment agreements.

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Compensation recovery.We have a compensation recovery policy that gives the Board discretion to recover incentive compensation paid to senior management in the event of a restatement of our financial statements due to misconduct.

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Change of control agreements.We have “double-trigger” change of control agreements with our executives to provide continuity of management in the event of an actual or potential change of control of BD. We have adopted a policy of eliminating excise tax gross-ups from future change of control agreements.

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Use of independent consultant. The Compensation and Benefits Committee (the “Compensation Committee”) has engaged an independent, third-party consultant to assist it in designing our compensation program and making compensation decisions. The independent consultant did not provide any services to BD or BD management in 2013.

Changes to robust share ownership guidelinesour compensation program in 2013

The Compensation Committee regularly reviews our compensation program in light of current trends and are prohibited from hedging againstbest practices in order to identify ways to improve the economic riskprogram. As a result of such ownership.its ongoing review, the following actions were taken for 2013:

Changes to PIP

 

In addition to the existing revenue and EPS measures used in the PIP, free cash flow as a percentage of sales was added as a third performance measure. This new measure was added because we view the efficient use of cash as an important driver of BD’s ability to fund ongoing product development and innovation and geographic expansion, which are key strategic priorities for BD. We offer our named executive officers very limited perquisites,also believe that adding this free cash flow metric to the PIP provides for a more balanced set of performance targets that focuses on both profitability and none of them have employment agreements.operating efficiency.

Changes to equity compensation

 

We haveRelative total shareholder return (“TSR”) replaced revenue growth as a compensation recovery policyperformance metric for the Performance Units issued in 2013. Relative TSR measures BD’s stock performance during the performance period against that gives the Board discretionof peer companies. Relative TSR was chosen as a new performance metric because it allows payouts to recover incentive compensation paidbe based in part on how BD’s performance, as reflected in our stock price over time, compares to senior management in the event of a restatement of our financial statements duepeer companies facing similar business conditions, and it is directly tied to misconduct.

We have “double-trigger” change of control agreements with our executives to provide continuity of management in the event of a change of control of BD.

The independent consultant to the Compensation and Benefits Committee (the “Compensation Committee”) did not provide any other services to BD or BD management in 2012.shareholder returns.

Overview of 20122013 operating performance and executive compensation

BD deliveredachieved solid financial performance in 2013 under sustained challenging market conditions, as we continued to deliver on our long-term strategy. Our results in 2012,were driven by strong underlying growth of sales in safety-engineered device salesdevices and in emerging markets. Similarmarkets, and new product launches and sales from recent acquisitions also contributed significantly to 2011, the medical device industry continued to face difficult macroeconomic conditions that adversely affected our underlying growth and profitability during the year. These conditions

growth.

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%, which included a 2.7% negative effect from currency translation. Underlying4.5% and our currency-neutral revenue growth for the year was 4.3%5.4%.

 

We reported earnings per share from continuing operations (“EPS”)EPS of $5.30. While this was a slight decrease from$4.67, or $5.95 after adjusting for certain items, which represents approximately 11% growth over 2012 adjusted EPS of $5.37. We also improved our underlying operating margin, reflecting continued improvement in the prior year, after excluding a $0.06 charge resulting from primarily non-cash pension settlements and a negative effectquality of $0.21 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.earnings.

We continued to usesee results from our strong financial condition to position BD for long-term growth, including investmentsstrategy of investing in high-growth areas in emerging markets and research and development spending. To this end, BDdevelopment. We launched a number of new products during the year across all three of itsour business segments, as sales from new products reached approximately 13% of total sales for the year, and emerging markets accounted for almost a quarter24% of BD’s 20122013 sales.

 

Significant progress was madeWe continued to benefit from our focus on BD’s operating efficiency initiatives. These includeincreased operational effectiveness. Our ReLoCo (Reliable Low Cost) program resulted in savings of close to $50 million during the initial roll-outyear.

We furthered our strategy of Project Everest (our enterprise resource planning upgrade)supplementing internal growth with strategic acquisitions, including the acquisition of Safety Syringes, Inc., savings realized from ReLoCo (our program to reduce manufacturing costs),a developer of anti-needlestick devices for prefilled syringes, and our efforts to reduce overhead expense through the establishment of shared service centersCato Software Solutions, a provider of software that offers medication safety solutions for pharmacy and other projects. These savings allow BD to invest in other higher-growth opportunities, such as emerging markets.healthcare workers.

 

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 strategy to supplement internal growth with growth from strategic acquisitions.

We announced plans to sell the majoritysale of our Discovery Labware business, which allows us to focus our BD Biosciences resources on the growth drivers for our BD Biosciencesthat segment. This sale was completed in October 2012.

 

We returned $1.9

•

Cash flows from operations were $1.7 billion, and we returned $836 million to shareholders through dividends and share repurchases. BD increased its dividend for the 41st consecutive year.

PIP awards. For 2013, our adjusted revenues, EPS and share repurchases. BD has increased its dividend for 40 consecutive years.

Based on BD’sfree cash flow as a percentage of sales all met or exceeded the performance BD’s revenues were slightly above the revenue target and its EPS was at 98% of the EPS target for the yeartargets set under the PIP, whichPIP. This resulted in available funding for PIP awards at 97%107% of target.target awards. The PIP awardsaward made to our CEO was 109% of his target award opportunity, and awards ranged from 96% to 112% of target opportunity for our other named executive officers, as a percentage of their target awards, were generally in line withofficers. We believe that the funding factor. In addition, the lower revenue growth BD experienced2013 PIP compensation appropriately reflected our strong financial performance during the 2010-2012 fiscal years relativeyear and the individual contributions of our executive officers to the Performance Unit targets for that period resulted in there being no payout of the Performance Units covering the 2010-2012 performance cycle, continuing a trend over the last four performance cycles of below-target payouts for these awards.performance.

Equity compensation. Consistent with our past practice, equity compensation represented a significant component of compensation in 2012. The2013. Among the changes in equity-based compensation awards in 2013 was an increase in Mr. Kozy’s award value to recognize his appointment to the equity compensation for Mr. Forlenza from 2011 was due to his election asadditional role of BD’s Chief ExecutiveOperating Officer at the beginning of the year. The other increases in equity compensation paid to NEOs were based on performance, increased responsibilities assumedearly 2013.

2011-2013 Performance Unit payouts. BD’s revenues during the year2011-2013 fiscal years were below target performance, and return on invested capital was below threshold performance for the performance period. This limited the payout of these Performance Units to align award values with market practices.32% of target, continuing a trend over several years of below-target payouts for these awards.

Objectives of Our Executive Compensation Program

The objectives of our executive compensation program include:

Offering competitive compensation.Aligning executives with our shareholders. We seek to offer a competitivealign the interests of our executives with those of our shareholders through equity compensation package that helps us attract and retain our executives.share retention guidelines.

Linking compensation to performance.performance. We seek to implement a pay-for-performance philosophy by tying a significant portion of pay to financial and other goals that support long-term shareholder value.

Aligning executives with our shareholders.Offering competitive compensation. We seek to align the interests ofoffer a competitive compensation package that helps us attract and retain our executives with those of our shareholders through equity compensation and share ownership guidelines.executives.

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 roleroles of Pay Governance and management, may be found on pages 11-12.10-11. 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 management without the Compensation Committee’s prior approval. In accordance with this policy, Pay Governance did not perform services for BD or itsBD management in 2012.2013.

Approximately 95% of the shares voted at last yearyear’s annual meeting were cast in support of BD’s advisory vote onto approve executive compensation. The Compensation Committee viewed the results of this vote as broad general broad shareholder support for our executive compensation program. Based on this result and ourits ongoing review of our compensation policies and decisions, we believethe Compensation Committee believes 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 determining pay components, 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 that 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 for 20122013 were:

 

Abbott Laboratories Agilent Technologies, Inc. Allergan, Inc. C.R. Bard, Inc. Baxter International Inc. Beckman Coulter, 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.

In addition to the Comparison Group, compensation data regarding certain positions at Abbott Laboratories, Johnson & Johnson and Roche Diagnostics are included inis considered by the Comparison GroupCompensation Committee when reviewing the compensation of Mr. Kozy in order to increase the number of comparable positions for which compensation data is gathered when reviewingavailable. Also, because of a lack of positions within the compensationhealthcare industry that are comparable to Mr. Cohen’s role as the head of Messrs. KozyBD’s Global Health initiative, which involves, among other things, serving as a liaison to governments and Cohen. Compensation data from these three companies was not considered bynon-government organizations throughout the Compensation Committee when reviewing the compensation of Messrs. Forlenza, Elkins and Sherman.world, we also reviewed general industry data.

The table below sets forth revenue and market capitalization information regarding the Comparison Group:

 

		Revenue (in millions) for the twelve months ended September 30, 2012				Market Capitalization on September 30, 2012 (in millions)				Revenue for the twelve  months ended September 30, 2013 (in millions)					Market capitalization on  September 30, 2013 (in millions)
25th Percentile		$	4,998			$	10,293				$	4,563				$	13,927
Median		$	7,276			$	21,176				$	6,831				$	16,953
75th Percentile		$	13,269			$	30,754				$	10,235				$	28,032
BD		$	7,708			$	15,677				$	8,054				$	19,425
Percentile Rank			52nd				45th					63%					52%

The Compensation Committee attempts to set the compensation of our executive officers at levels that are competitive with the companies listed above, and uses market comparison data regarding these companies as a guide. The Compensation Committee estimates the median salary, annual cash incentive and long-term equity

compensation (and the combined total of these elements) of persons holding the same or similar positions at the companies listed above, based on the most recent market data available. The Compensation Committee then generally seeks to set 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. 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. The use of market comparison data, however, is just one of the tools the Compensation Committee uses to determine 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. TheBased on the market data provided by Pay Governance, the Compensation Committee believes that the total target compensation set for the named executive officers in 20122013 was competitive with median levels, except that the Compensation Committee continued to set 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.his relatively short tenure as CEO.

Because the Compensation Committee reviews each compensation element 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 target valueportion 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 amount of compensation ofpaid to our CEO and that ofpaid to the other named executive officers.

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 additional perspective on the wealthvalue the executives have accumulated from prior equity awards and plan accruals and theirthe retentive value of such awards, consider any changes to our program that may be appropriate (including the mix of compensation elements), and provide additional context for their compensation decisions.

Our emphasis on pay-for-performance

Performance-based compensation

While weWe do not use a specific formula to determine the mix of performance-based and fixed compensation. However, performance-based compensation PIP awards and performance-based long-term equity compensation representrepresents a significant portion of the compensation paid to our named executive officers. (We view PIP awards, Performance Units and SARs asThe charts below show the performance-based pay for this purpose.) In 2012, 73%portion of Mr. Forlenza’s2013 target compensation for Mr. Forlenza and an average of 68% of the target compensation of the other named executive officers was performance-based and not guaranteed.(excluding Mr. Reidy, who joined BD in the last quarter of the fiscal year).

20122013 Total Target Compensation

 

The above charts are based on the target values of performance-based compensation. For purposes of these charts, we consider PIP awards, Performance Units and SARs as 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 measuredwe measure performance in 2012

The goalPreviously, BD’s compensation programs focused on key financial indicators of operating success, including revenue and EPS growth and return on invested capital (“ROIC”). Over the past few years, increased competition, changes in government healthcare and research funding, pricing pressures and other factors have affected overall healthcare utilization and, in turn, industry revenue growth rates. As a result, the strategic objectives for BD going forward will, to a greater extent, focus not only on revenues, EPS and ROIC, but also on operational efficiency, which allows BD to free up funds that can be used to invest in product development and innovation, and in geographic expansion. Therefore, the Compensation Committee believes it is important that our compensation program reinforce and reward behaviors that support a balance of growth, profitability and operating efficiency. In addition, given the market conditions BD has faced over the last few years, the Compensation Committee also believes that our program should incorporate a measure that compares BD’s performance to peer companies facing these same market conditions.

With these considerations in mind, the Compensation Committee, with input and recommendations from Pay Governance and management, conducted a review of BD’s annual and long-term incentives to identify ways to improve the design of our executive compensation program. Based on this evaluation, the Compensation Committee approved certain changes to our performance-based compensation, as discussed below.

PIP. Our compensation program is structured to provide incentives for management to deliverboth near-term and long-term performance. The vehicle for rewarding near-term performance is the PIP. For 2012, the Compensation Committee evaluatedpast several years, we used revenues and EPS as the performance measures under this plan based primarily on BD’s EPS for the year.plan. The Compensation Committee useduses EPS as a performance measure because it is the primary basis on which BD sets performance expectations for the year and it is a widely-usedwidely used measure of overall company performance. However,Revenue is used because it focuses management on achieving strong “top-line” growth, consistent with our business strategy. For 2013, free cash flow as a percentage of sales was added as a third measure. “Free cash flow” means cash flow from our operating activities, less capital expenditures and capitalized software. This measure was added to recognize the importance of efficient use of cash to our ability to fund ongoing investments in our business and the increased focus on this metric by the investor community. Adding this free cash flow measure also provides a more balanced set of performance targets that focus on growth, profitability and operating efficiency. The Compensation Committee believes sustained revenue growth is necessary to createthat consistent performance in these areas will result in the creation of long-term shareholder value, it also set a revenue target for the year, although not weighted as heavily as EPS.value.

Equity compensation. 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 2012,2013, the two metrics used to measure performance metrics the Compensation Committee used were long-term revenue growthare ROIC and return on invested capital (“ROIC”), whichrelative TSR. ROIC measures profitability and how effectively company assets are being used. These two metrics require the named executive officersThis

metric requires management to effectively manage a number of different aspects of the business, including new product introductions, productivity improvements and expansion into geographic markets.

The other wayexpansion. Relative TSR measures BD’s stock performance (assuming reinvestment of dividends) during the performance period against that of a group of 18 companies in the healthcare industry. Relative TSR replaced the revenue growth measure that had been used for prior Performance Unit awards. This measure compares BD’s performance, as reflected in our stock price over time, to peer companies facing similar business conditions and is directly tied to shareholder returns. A majority of Comparison Group companies that include performance-based stock units in their equity compensation report that they use relative TSR as a performance metric.

Equity compensation is also tied to our long-term performance isby 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

How performance goals are not successful in creating this shareholder value, this will reduce the value they realize from their equity compensation.set

When setting corporate 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, andstated above, 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 then currentthese economic conditions and the growth trends in the markets that BD serves, and sets what it believes are reasonably achievable performance targets for BD at the time of grant.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 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 forward, 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 Awards.awards. We do not overweight short-term 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 discretion to lower PIP awards based on suchany factors it deems appropriate, including whether management has taken unnecessary or excessive risk.

 

•

Share Ownership Guidelines.retention and ownership guidelines. Our share ownershipretention guidelines ensure that our executives have a significant amount of their personal wealthassets tied to long-term holdings in BD stock.

 

•

Use of Long-Term Equity Compensation.long-term equity compensation. The largest portion of total targetthe compensation paid to our named executive officers 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.

•

Use of Performance Units.Units. A 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.

 

•

Performance Metrics.Use of multiple performance metrics. We useinclude a varietynumber of different performance metrics (including EPS, revenue growth and ROIC)in our performance-based compensation. We believe that we believe correlatesustained performance in these metrics correlates to long-term shareholder value and that are affected by management decisions.value.

The Key Elements of Our Compensation Program

The key elements of our executive compensation program are summarized in the table below.

 

Component		Description				Purpose
Base salary		Fixed cash compensation that is based on performance, scope of responsibilities, experience and competitive pay practices.				Provide a fixed, baseline level of compensation.
Performance Incentive Plan		CashAnnual cash payment tied to performance during the fiscal year.				Reward executives for BD’s performance for the yearbased on annual performance objectives and individual contributions to such performance.
Long-term equity compensation:
Ÿ  Stock appreciation rights		Right to receive 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.
Ÿ   Time-Vested Units		Restricted stock units that vest three years after grant.

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 believes this mix of salary, annual cash incentive and equity compensation offers a competitive compensation package to our executives. This structure also promotes our pay-for-performance philosophy by linking pay levels to both our near-term performance (through PIP awards) and long-term performance (through 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.

How PIP Payments and Equity Compensation Are Awarded

PIP

The PIP provides our executives an opportunity to receive a cash award for BD’s performance for the fiscal year and their contribution to that performance, as part of our pay-for-performance philosophy.

Target awards. Target PIP awards for the named executive officers are expressed as a percentage of base salary earned during the year. The “Grants of Plan-Based Awards in Fiscal Year 2012”2013” table on page 4142 shows the range of possible awards under the PIP, based on certain assumptions.

The factors that the Compensation Committee considersand the Board consider when setting PIP awards include BD’s overall performance for the year compared to the pre-set performance targets and the level of available funding (discussed below), as well as the executive’s target award and individual performance. CEOOur CEO’s performance is measured against the performanceindividual 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 set 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 itsand the Board use their business judgment to determine the appropriate PIP award to recognize BD’s performance and the executive’s contribution.contribution to that performance.

Performance Targets.targets. Available fundingAs mentioned earlier, for 2013, the performance measures under the PIP awardsincluded EPS, revenues and free cash flow as a percentage of sales targets. EPS performance is determined by a formula tied to how BD performs duringweighted 50% and the other two metrics are each weighted 25%. As previously discussed, EPS is the primary basis on which we set our performance expectations for the year, againstand for this reason, it is more heavily weighted than the performance targets set by the Compensation Committee. For 2012, these included EPS and revenue targets, with EPS performance weighted 75% and revenue performance weighted 25%.other measures. The EPS and revenueperformance targets were based on BD’s business plan for the fiscal year. Revenues and EPS for the year are measured after eliminating the estimated effects of foreign currency translation so that only BD’s underlying performance is considered.considered in determining available funding.

As previously discussed, we use EPS as a performance target because it is the primary basis on which we set our performance expectationsFunding for the year and EPS is a widely-used measure of overall company performance. For this reason, EPS is more heavily weighted than revenue growth. The revenue 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.

FundingAwards. Available funding for PIP awards is determined by a formula. For both EPS and revenues,each measure, the Compensation Committee measuredreviews how BD performed against the target goal set by the Compensation Committee in order to arrive at a funding factor.performance factor for that measure. For every 1% of performance above target, funding with respect to that measure is increased 5% (up to a maximum of 150%), and for every 1% below target, funding decreaseddecreases 2.5%. Performance below 90% of target would have resultedfor revenues and EPS results in no funding for that particular measure, while performance below 80% of target will result in no funding for the free cash flow measure. The performance factors for boththe three measures wereare then weighted as described above, to arrive at a final funding amount. In the Compensation Committee’s discretion,Because PIP awards are discretionary, actual awards, as a percentage of a named executive officer’s target, may be more or less than the overall funding factor.

When comparing 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 for items that are not considered part of our ordinary operations. This ensures that management makesbusiness decisions are made based on what management believes is in 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 benefittedrewarded by these types of events.

Long-Term Equity CompensationLong-term equity compensation

The equity compensation awards made to the named executive officers in 20122013 consisted of SARs, Performance Units and TVUs. A description of each type of award is on page 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.43. 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 for sustained long-term performance, regardlessoperating performance. TVUs, which represent the smallest portion of movementsthe awards, are used to reduce the volatility in our stock price.amounts realized from equity compensation that can arise when purely performance-based equity compensation is used. All three types of these awards also serve to align the interests of our executives with those of our shareholders and help promote executive retention.

How equity 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. SARs, Performance Unit and TVU awards are then made based on their estimated grant date values, with SARs and Performance Units each making up approximately 40% of the total award value, and TVUs the remaining 20%. The estimated value given to Performance Units and TVUs are valued at grant based on a 20-day30-day average stock price, while the estimated value of the SARs are valuedis calculated using an option valuation model that uses certain assumptions, such as stock volatility, dividend yield and the expected 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 beamounts realized from the awards.these awards may differ from these estimated values.

Performance Unit targets.The performance measures used for the Performance Units granted in 20122013 were average annual revenue growthROIC and average annual ROIC, withrelative TSR, each weighted 50%. In setting revenue growth and ROIC targets,To determine the Compensation Committee considered BD’s business plan at the time of the grant and what the Compensation Committee believed 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. As we discussed earlier, revenue growth and ROIC were used as performance metrics because they are directly tied to our long-term growth strategy. As with the PIP, revenues are measured after eliminating the estimated effect of foreign currency translation so that only underlying performance is counted.

Performance Unit awards are given a share target. The actual number of shares issued under an award, a payout factor for each performance measure is determined bycalculated and then weighted to determine a grid, andfinal payout factor, which can range anywhere from zero (if BD fails to meet the minimum performance threshold for both revenue growth and ROIC)measures) to 200% of the share target (if BD meets or exceeds the maximum performance threshold for both revenue growtheach).

The payout factor for ROIC performance is determined by a scale based on how far above or below ROIC is from target performance. Threshold performance is set at 5% below the ROIC target, and ROIC)maximum performance is 5% above target.

The payout factor for relative TSR performance is determined by the following table:

BD’s Percentile Rank		TSR Factor
³85th		200%
75th		165%
50th		100%
25th		35%
Less than 25th		0

In the event BD has a negative TSR for the Performance Period, the payout factor assigned to relative TSR is capped at 100%. In determining payouts, the Compensation Committee has the discretion to adjust BD’s operating resultsROIC to account for events that occur during the performance period, similar to its discretion under the PIP.PIP, and make adjustments to the peer group, or the TSR of companies within the peer group or BD, to account for acquisitions or mergers or other significant events, such as a changes in capital structure.

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 connection withEffective January 1, 2013, Mr. Forlenza’s election as Chief Executive Officer, his salary was increased about 4.4% from $750,000$900,000 to $900,000, effective October 1, 2011.$940,000. Messrs. Kozy and Sherman received approximate 6% and 7% increases, respectively, to adjust for their performance and market practices. Mr. Kozy also received an approximate 11% increaseReidy’s base salary was set at $675,000 when he joined BD in salary to account for additional duties he assumed in his role as Executive Vice President, including oversight of our three business segments. The salary increases of the other named executive officers were in-line with salary increases at BD generally.July 2013.

PIP awards

The threshold performance, target performance and maximum performance under the PIP for 2012,2013, along with BD’s adjusted performance during the year, (adjustedis set forth below. Adjusted currency-neutral EPS, adjusted currency-neutral revenues and adjusted free cash flow as described below), were as follows:a percentage of sales are non-GAAP financial measures. Appendix A to this proxy statement contains reconciliations of these measures to the comparable GAAP financial measure.

 

		Minimum Performance				Target Performance				Maximum Performance				BD’s Adjusted Performance				Percentage of Target Achieved
EPS (75% weighting)		$	4.97			$	5.52			$	6.07			$	5.41				98.0	%
Currency-neutral revenues (25% weighting)*		$	7,025			$	7,806			$	8,587			$	7,822				100.2	%

		Range of Performance															Adjusted Performance					Percentage  of Target Achieved					Weighted Performance Factor
		Minimum					Target					Maximum
Currency-neutral EPS (50%)				$  5.05					$  5.61					$  6.17					$  5.73					102.1	%				55	%
Currency-neutral revenues (25%)*				$7,130					$7,922					$8,714					$8,029					101.4	%				27	%
Free cash flow as % of sales (25%)				10.2%					12.7%					14.0%					12.7%					100.0	%				25	%
Total																													107	%

 

*	Amounts in millions.

The EPS target of $5.61 set by the Compensation Committee represented 4.5% growth over 2012 adjusted EPS, or 7.4% on a currency-neutral basis given the anticipated impact of currency translation for the year. However, the 2013 EPS target also reflected the anticipated impact of the medical device excise tax that went into effect for the first time in January 2013 under the U.S. healthcare reform. Without the impact of this tax, our

Reported EPS target would represent 10.2% growth. The revenue target represented a 2.8% increase over 2012 revenues, or 4% on a currency-neutral basis, while the free cash flow as a percentage of sales target was consistent with BD’s historical performance. Our reported EPS, revenues and free cash flow as a percentage of sales for the year was $5.30. were $4.67, $8.054 billion and 14.0%, respectively.

In reviewing BD’s actual EPS2013 performance, against the performance target, the Compensation Committee used its discretion to eliminate the $0.04 per share dilution from our Kiestramade adjustments for:

The revenue, cash flow and Sirigen acquisitions during the year and the $0.06 per share chargeEPS impact of acquisitions;

The EPS impact of non-cash charges BD took during the year relating to various pension settlements, resultingthe settlement of antitrust class action litigation and the verdict in adjusted EPSour litigation with Retractable Technologies, Inc.; and

The favorable impact on free cash flow of $5.41 (adjusted for rounding). Revenues from those acquisitions were also excluded fromunbudgeted items, including incremental depreciation and amortization, and the revenues for the year. Underfavorable timing of certain tax payments.

The Committee makes adjustments when determining the PIP funding formula, this performance resulted infactor so that funding for awards appropriately reflects the Company’s underlying operating results and executives do not benefit from, and are not penalized by, unplanned events that occurred during the course of the year. To that end, the adjustment for acquisitions and the adjustments to free cash flow were made because these items were not budgeted for at 97%the beginning of target.the year when the PIP performance targets were set. Also, the pension and litigation-related charges were eliminated from EPS because neither of these items relate to BD’s underlying operating performance.

The following table shows the PIP awards granted for 2012.2013. These awards are also set forth in the Summary Compensation Table on page 39 under the heading “Non-Equity Incentive Plan Compensation.”

 

Name		Target Incentive Award				Actual Incentive Award				Target  Incentive Award				Actual  Incentive Award
Vincent A. Forlenza		$	1,080,000			$	1,080,000			$	1,128,000				1,225,000
David V. Elkins			618,750				599,900
Christopher Reidy*											122,610				131,192
William A. Kozy			707,575				724,500				770,000				865,095
Gary M. Cohen			481,020				250,000				484,560				466,631
Jeffrey S. Sherman			437,625				444,300				472,500				530,854

*	Mr. Reidy’s target and actual awards are prorated for the time he was employed at BD during 2013.

The PIP awards made to the named executive officers were generally in-line with our financial performance for the year, as measured against the PIP targets, and no individual’s actual award, as a percentage of theirhis target, awards, were generally in-line withexceeded the PIP fundingperformance factor and where they did exceed the factor, did not do so by more than 5%. In making these awards, the Compensation Committee considered a number of factors, includingBD’s performance during the year and individual contributions to BD’s performance. During the year, BD experienced strong financial performance that exceeded management’s business plan in terms of revenue and EPS growth. Management continued to deliver on its strategy for growth, as evidenced by the year. Despitepercentage of sales coming from new products, continued strong growth in emerging markets and the continuing industry challenges in the medical device industry, BD exceeded its revenue goal and substantially met its EPS goal under the PIP, while still maintaining its level of investment in research and development and absorbing the costs of unanticipatedsignificant contributions from recent acquisitions. BD’s performanceThe year was also reflected management’s continuedmarked by significant progress on growthkey initiatives intended to position BD for long-term success,growth, including progress on the establishment of a numbernew company-wide innovation system to enhance innovation capabilities within BD and the roll-out of new product launchesmanagement’s strategic marketing program. Significant contributions to BD’s overall performance also came from management’s operating efficiency programs, including BD’s ReLoCo program, which contributed savings of close to $50 million during the year, and the continued growth in emerging markets. In addition, BD executed on its strategy to supplement internal growth with strategic acquisitions by completing the Kiestra and Sirigen transactions. Management also completed the initial rolloutroll-out of BD’s enterprise resource planning system upgrade and took other steps toward improving operating efficiency, including the opening of newour shared service centers to reduce overhead expense.in the U.S., Europe and Asia.

Equity compensation awards

The Compensation Committee made the equity compensation awards to the named executive officers shown on page 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 increases42. Changes in equity-based compensation paid to NEOs during 2013 compared to 2012 were based on

individual performance, and/or increased responsibilities assumed during the year andadjustments to align award values with market practices.

practices, and, in the case of Mr. Kozy, to recognize his appointment to the additional role of BD’s Chief Operating Officer in early 2013. The Performance Units included in these awards cover the 2012-20142013-2015 performance period. The target revenue growth for these awards is 4.3%period and have a target ROIC is 24%of 21.9%. The Compensation Committee believes the revenue growth target for these awards represents a challenging goal for management given the economic climate BD continues to operate in and its expected impact on BD’s operating results.

Payout of prior Performance Unit awards

2009-2011 performance period

In November 2011, Performance Units covering the 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 4.5% and 29%, respectively. This resulted in a payout of these awards at 20% of the share target. In determining the payout, the Compensation Committee used its discretion to

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, there were no payouts for these awards.

2011-2013 performance period

In November 2013 (our 2014 fiscal year), Performance Units covering the 2011-2013 performance period vested. These awards had performance targets of 6% currency-neutral revenue growth and 30% ROIC. Our reported revenue growth and ROIC over the performance period therewere 4.2% and 23.3%, respectively. Revenue growth, adjusted for acquisitions and divestitures, was no3.7%. This adjusted performance reduced the payout of the awards from 38% to 32% of the share target. The Compensation Committee made adjustments for acquisitions and divestitures because these awards.events were not contemplated at the beginning of the performance period.

Performance Unit payout trend

As was stated earlier, BD has been operating in a challenging economic environment the last several years. The impact of the global economic conditions on BD’s revenue growth and ROIC has also been reflected in Performance Unit payouts over this period, with the last fourfive payouts all being 77%, 44% and 20% of target for the 2007-2009, 2008-2010 and 2009-2011 performance cycles, respectively, and no payout for 2010-2012.below target. 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 preset targets, as shown in the table below.

 

Performance Period		Revenue Growth				ROIC				Performance Unit Payout				Revenue Growth					ROIC					Performance Unit  Payout
2007-2009			6.1	%			31.7	%			77	%				6.1	%				31.7	%				77	%
2008-2010			5.8	%			30.8	%			44	%				5.8	%				30.8	%				44	%
2009-2011			4.5	%			29.0	%			20	%				4.5	%				29.0	%				20	%
2010-2012			3.9	%			27.2	%			0	%				3.9	%				27.2	%				0	%
2011-2013																3.7	%				25.2	%				32	%

These reduced Performance Unit payouts have resulted in significant differences between the original grant date value of these awards and the amounts actually realized by the named executive officers listed below, as shown below.in the following table for the last three payouts.

 

		2008-2010 Grant								2009-2011 Grant								2010-2012 Grant								2009-2011 Grant								2010-2012 Grant								2011-2013 Grant
Name		Grant Date Value				Realized Value				Grant Date Value				Realized Value				Grant Date Value				Realized Value				Grant Date Value				Realized Value				Grant Date Value				Realized Value				Grant Date Value				Realized Value
Vincent A. Forlenza		$	472,248			$	202,150			$	679,000			$	163,980			$	1,064,038			$	0			$	679,000			$	163,980			$	1,064,038			$	0			$	1,393,622			$	677,682
David V. Elkins			N/A				N/A				N/A				N/A				638,393				0
William A. Kozy			472,248				202,150				470,188				113,563				782,014				0				470,188				113,563				782,014				0				846,106				411,454
Gary M. Cohen			472,248				202,150				470,188				113,563				782,014				0				470,188				113,563				782,014				0				846,106				411,454
Jeffrey S. Sherman			321,972				137,855				322,500				77,865				505,435				0				322,500				77,865				505,435				0				607,219				295,361

Note: Realized values are determined based on the closing BD stock price on the vesting date and include deemed dividend reinvestmentreinvestments during the vesting period. Mr. Elkins’Reidy’s first Performance Unit awardgrant was made in 2010 for the 2010-2012 period.2014-2016 performance cycle.

Other Compensation Actions

Compensation of Mr. Reidy. In connection with his election as CFO in July 2013, Mr. Reidy’s base salary was set at $675,000. Mr. Reidy was also guaranteed an equity compensation award in fiscal year 2014 with a grant date value of $2 million, and entered into an agreement providing for his continued employment following a change of control of BD, similar to agreements with other executive officers, which are discussed below. These terms were the result of negotiations between BD and Mr. Reidy in connection with his recruitment and were approved by the Compensation Committee as a reasonable inducement for Mr. Reidy to join BD.

Compensation of Messrs. Elkins and Upadhyay. Mr. Elkins served as CFO until he left BD in November 2012. As a result of his departure, he did not receive any equity compensation or PIP award in 2013, and he forfeited his outstanding equity compensation awards to the extent they were not vested at the time of his departure.

Mr. Upadhyay was our Acting CFO from November 10, 2012 until Mr. Reidy’s appointment. Upon Mr. Reidy’s joining BD, Mr. Upadhyay was appointed Senior Vice President-Finance, and his base salary was increased from $349,650 to 400,000. Mr. Upadhyay eventually left BD in September 2013. Because he was not employed by BD at the end of the fiscal year, Mr. Upadhyay was not eligible for a PIP award. However, in connection with his separation, he received a payment of $214,000 in recognition for his services as Acting CFO and in exchange for certain releases and covenants given to BD. Because he was not an executive officer at the beginning or end of 2013, decisions regarding Mr. Upadhyay’s compensation were not made by the Compensation Committee.

Other Benefits Under Our Executive Compensation Program

Company transportation

Mr. Forlenza is encouraged to use BD aircraft for his personal and business travel in order to make more efficient use of his travel time, for his personal security and to reduce business continuity risk. Mr. Forlenza has entered into a time-sharing arrangement with BD under which he makes payments to BD for his personal use of BD aircraft. For 2013, Mr. Forlenza did not take anyForlenza’s time-share payments exceeded BD’s incremental costs relating to the one personal flightsflight he took during the year. Additional information on BD aircraftthe time-sharing arrangement is set forth in 2012.the notes to the Summary Compensation Table beginning on page 40.

Deferred compensation

Our Deferred Compensation and Retirement Benefit Restoration Plan (the “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. The plan is offered to our eligible associates as part of a competitive compensation program. We do

not provide any guaranteed earnings on amounts deferred by the named executive officers. Earningsofficers, and 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. A more complete description of the deferred compensation provisions of the plan begins on page 47.49.

Pension benefits

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 the BD Retirement Plan, our qualified Retirement Plan,defined benefit retirement plan, we provide additional retirement benefits through our nonqualified 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. 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 45.46.

Change of control agreements

We have entered into agreements with ourthe named executive officers relating to their employment following a change of control. This agreement providesThese agreements provide the executiveexecutives with continued employment for a period of two years following a change of control of BD, and providesprovide certain benefits to the executiveexecutives in the event histheir employment is terminated without cause or he leaves histhey leave their employment for “good reason” (also known as a constructive termination) during thissuch 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 50.51.

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 potential change of control of BD. These change of control benefits are reviewed from time-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 qualified executives.

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,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 executive following a change of control.

Tax reimbursement payments. In certain instances, payments made to a namedan executive officer on account of his termination may be subject to a 20% excise tax. ToUnder certain of our agreements, to offset the effect of the excisethis tax, we will reimburse the named executive officer for theany resulting excise tax. We provide for these payments because they allow anthe 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

provision. However, while we believe these tax reimbursement provisions serve a valid purpose, in light of trends in executive compensation practices, it has been our policy since 2011 that any new change of control agreements that we enter into with our executive officers will not contain these provisions. For instance, the agreement we entered into with Mr. Reidy upon his joining BD this year does not contain these provisions.

Other change ofin control provisions

Upon a change ofin 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.

Significant Policies and Additional Information Regarding Executive Compensation

Recovery of prior compensation

We have a policy that gives the Board the discretion to require a member of the BD Leadership Team (which includes 57 senior BD leaders, including the named executive officers) 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 that 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 57 members of senior management, and includes the named executive officers.

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 toTo 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 are required to retain, in shares of BD stock, 75% of the net after-tax proceeds from any equity compensation awards granted to them after they become members of the BD Leadership Team. They are subject to these requirements until the person achievesthey achieve the required ownership level. The required ownership levels are as follows:are:

 

Chief Executive Officer			5 times salary
Other Executive Officers (9 persons, including the NEOs other than the Chief Executive Officer)			3 times salary
Other BD Leadership Team Members			1 times salary

Shares held directly, shares held indirectly through our 401(k) plan and deferred compensation plan,Restoration Plan, and time-vested restricted stock unitsTVUs are included in determining a person’s share ownership. Messrs. Forlenza, Kozy, Cohen and Sherman each have holdings in excess of histheir ownership requirement. We have a policy that prohibits our directors and 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.

Timing of equity award grants

The Compensation Committee has adopted a policy that prohibits the backdating of any equity grantcompensation 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.

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 namedits CEO and its three other most highly-compensated executive officer.officers other than the CFO. This limitation does not apply, however, to “performance-based” compensation. While the Compensation Committee generally attempts to preservemaximize the deductibility of compensation, paid to the named executive officers, the Compensation Committee believes that 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 not be subject to the limits of Section 162(m)tax-deductible if doing so furthers the objectives of our executive compensation program.

COMPENSATION OF NAMED EXECUTIVE OFFICERS

The following table shows the compensation provided by BD to each of the named executive officers.officers in fiscal year 2013.

2012FISCAL YEAR 2013 SUMMARY COMPENSATION TABLE

 

Name and 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				Year				Salary($)				Stock Awards($)(1)				Option Awards($)(1)				Non-Equity Incentive Plan Compensation($)(2)				Change in Pension Value and Nonqualified Deferred Compensation Earnings($)(3)				All Other Compensation($)(4)				Total($)
Vincent A. Forlenza			2012			$	900,000				0			$	3,441,639			$	2,292,422			$	1,080,000			$	1,662,465			$	41,750			$	9,418,276				2013				930,000				3,758,005				2,449,317				1,225,000				784,753				35,958				9,183,033
Chairman, Chief			2011				725,000				0				1,393,622				1,434,250				723,077				709,038				33,867				5,018,854				2012				900,000				3,441,639				2,292,422				1,080,000				1,662,465				41,750				9,418,276
Executive Officer and President			2010				650,000				0				1,064,038				1,078,417				510,000				1,019,476				36,352				4,358,283				2011				725,000				1,393,622				1,434,250				723,077				709,038				33,867				5,018,854
Christopher R. Reidy(5)																																							2013				144,247				0				0				131,192				6,346				7,189				288,974
Chief Financial Officer and Executive Vice President of Administration
William A. Kozy																																							2013				690,000				1,844,731				1,202,322				865,095				741,154				39,704				5,383,006
Executive Vice																																							2012				643,250				1,369,703				912,346				724,500				1,116,174				44,622				4,810,595
President and Chief Operating Officer																																							2011				588,500				846,106				870,794				500,000				575,624				33,701				3,414,725
Gary M. Cohen																																							2013				605,700				601,293				391,887				466,631				0				34,615				2,100,126
Executive Vice																																							2012				601,275				899,409				599,114				250,000				1,300,415				43,556				3,693,769
President																																							2011				583,500				846,106				870,794				470,000				356,996				33,696				3,161,092
Jeffrey S. Sherman																																							2013				516,250				903,154				588,622				530,854				603,993				38,975				3,181,848
Senior Vice																																							2012				486,250				839,910				559,430				444,300				116,370				34,300				2,480,560
President and General Counsel
David V. Elkins(6)			2012				618,750				0				1,200,221				799,461				599,900				49,307				35,175				3,302,814				2013				78,125				0				0				0				30,546				22,500				131,171
Former Executive			2011				575,000				0				846,106				870,794				550,000				42,863				70,693				2,955,456				2012				618,750				1,200,221				799,461				599,900				49,307				35,175				3,302,814
Vice-President and Chief Financial Officer			2010				500,000			$	250,000	(7)			638,393				647,047				325,000				36,394				52,145				2,448,979
William A. Kozy			2012				643,250				0				1,369,703				912,346				724,500				1,116,174				44,622				4,810,595
Executive Vice-			2011				588,500				0				846,106				870,794				500,000				575,624				33,701				3,414,725
President			2010				575,000				0				782,014				792,630				372,000				993,335				41,657				3,556,636
Gary M. Cohen			2012				601,275				0				899,409				599,114				250,000				1,300,415				43,556				3,693,769
Executive Vice-			2011				583,500				0				846,106				870,794				470,000				356,996				33,696				3,161,092
President			2010				570,000				0				782,014				792,630				319,000				586,216				34,022				3,083,882
Jeffrey S. Sherman(8)			2012				486,250				0				839,910				559,430				444,300				116,370				34,300				2,480,560
Senior Vice- President and General Counsel
Vice President and Chief Financial Officer																																							2011				575,000				846,106				870,794				550,000				42,863				70,693				2,955,456
Suketu Upadhyay(7)																																							2013				351,477				240,545				156,750				0				24,717				237,284				1,010,773
Former Acting Chief Financial Officer

 

(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-settled 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 to determine the amounts reflected in these columns, see the notesnote 7 to the consolidated financial statements contained in our Annual Reports on Form 10-K for the fiscal years ended September 30, 2013, 2012 2011 and 2010,2011, respectively.

Amounts shown in the “Stock Awards” column for 2013 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):

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 value 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):

 

Name		Value at maximum payout				Grant date fair value at target payout				Grant date fair value at maximum payout
Vincent A. Forlenza		$	4,588,851			$	2,508,019			$	5,016,038
David V. Elkins			1,600,343
William A. Kozy			1,826,223				1,231,141				2,462,282
Gary M. Cohen			1,199,211				401,315				802,630
Jeffrey S. Sherman			1,119,879				602,730				1,205,460
Suketu Upadhyay							160,512				321,024

(3)(2)

Non-Equity Incentive Plan Compensation. Includes amounts earned under BD’s Performance Incentive Plan.Plan (“PIP”). These amounts are paid in January following the fiscal year in which they are earned, unless deferred at the election of the named executive officer.

 

(4)(3)

Change in Pension Value and Nonqualified Deferred Compensation Earnings.

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 (or, in the case of Messrs. Elkins and Upadhyay, the date they separated from BD). A decrease in present value is shown in the table as “0”. The actuarial present value of Mr. Cohen’s accumulated pension benefits decreased $184,793 during the year. Information regarding our pension plans begins on page 45.46. BD’s pension plans allow for early retirement in certain cases without any reduction in benefits if a participant’s combined age and years of service reach a certain amount.

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 48.49.

 

(5)(4)

All Other Compensation.Amounts shown for fiscal year 20122013 include the following:

 

		Vincent A. Forlenza				David V. Elkins				William A. Kozy				Gary M. Cohen				Jeffrey S. Sherman				Vincent A. Forlenza				Christopher R. Reidy				William A. Kozy				Gary M. Cohen				Jeffrey S. Sherman				David V. Elkins				Suketu Upadhyay
Matching contributions under plans		$	40,800			$	35,175			$	38,925			$	42,916			$	31,800			$	33,975			$	7,089			$	33,975			$	33,975			$	33,975			$	22,500			$	23,284
Matching charitable gifts			—				—				5,000				—				2,500				1,000				100				5,000				—				5,000				—				—
Term life insurance			950				—				697				640				—				983				—				729				640				—				—				—
Separation payment																							—				—				—				—				—				—				214,000
Total		$	41,750			$	35,175			$	44,622			$	43,556			$	34,300				35,958				7,189				39,704				34,615				38,975				22,500				237,284

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.Deferred Compensation and Retirement Benefit Restoration Plan.

 

•

Matching Charitable Gifts—The amounts shown are matching contributions under BD’s Matching Gift Program, under which BD matches up to $5,000 of contributions per calendar year made by an associate to qualifying non-profit organizations.

 

•

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.

 

•

Separation Payment—In connection with his separation, Mr. Upadhyay received a payment of $214,000 in recognition for his services as Acting CFO and for certain releases and covenants given to BD.

Pursuant to a policy adopted by the Board of Directors, Mr. Forlenza is encouraged to use BD aircraft for his personal and business travel. The value of Mr. Forlenza’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. Forlenza. 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 after dropping off Mr. Forlenza 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.

BD and Mr. Forlenza have entered into a time-sharing arrangement under which Mr. Forlenza 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. Forlenza’s payments under this arrangement for the one personal flight taken in fiscal year 2013 exceeded 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. Mr. Forlenza is responsible for the payment of any tax on any income imputed to him as a result of his personal use of corporate aircraft.

(5)	Mr. Reidy joined BD on July 15, 2013.

(6)	Mr. Elkins resigned from BD effective November 9, 2012.

 

(7)	Represents amount paid pursuantMr. Upadhyay served as Acting Chief Financial Officer from November 10, 2012 to Mr. Elkins’ sign-on agreement to compensate him for the forfeiture of equity awards he had receivedJuly 14, 2013. He subsequently resigned from his former employer.

(8)	Mr. Sherman was not a named executive officer in 2010 or 2011 and, therefore, his compensation is not disclosed for those years.BD effective September 20, 2013.

INFORMATION REGARDING PLAN AWARDS IN FISCAL YEAR 20122013

Set forth below is information regarding awards granted to the named executive officers in fiscal year 2012.2013. The non-equity incentive awards were made under the BD Performance Incentive Plan.PIP. The equity awards were made under BD’s 2004 Employee and Director Equity-Based Compensation Plan. Mr. Elkins did not receive any plan-based awards in 2013.

Grants of Plan-Based Awards in Fiscal Year 20122013

 

						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)								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)
Name		Award Type(1)		Grant Date		Threshold ($)				Target ($)				Maximum ($)				Threshold (#)				Target (#)				Maximum (#)											Award Type(1)								Grant Date		Threshold ($)				Target ($)				Maximum ($)				Threshold (#)				Target (#)				Maximum (#)
Vincent A. Forlenza		PIP		N/A			810,000				1,080,000				2,160,000																															PIP		N/A			778,320				1,128,000				2,256,000
		TVU		11/22/2011																											15,907												1,147,213			TVU		11/20/12																											17,758												1,249,986
		PU		11/22/2011															3,181				31,814				63,628																2,294,426			PU		11/20/12															14,776				34,766				69,532																2,508,019
		SAR		11/22/2011																															181,794			$	72.12				2,292,422			SAR		11/20/12																															202,758				76.18				2,449,317
David V. Elkins		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
Christopher R. Reidy																																														PIP		N/A			84,601				122,610				245,220
William A. Kozy		PIP		N/A			530,681				707,575				1,415,150																															PIP		N/A			531,300				770,000				1,540,000
		TVU		11/22/2011																											6,331												456,592			TVU		11/20/12																											8,717												613,590
		PU		11/22/2011															1,266				12,661				25,322																913,111			PU		11/20/12															7,253				17,066				34,132																1,231,141
		SAR		11/22/2011																															72,351			$	72.12				912,346			SAR		11/20/12																															99,530				76.18				1,202,322
Gary M. Cohen		PIP		N/A			360,765				481,020				962,040																															PIP		N/A			334,346				484,560				969,120
		TVU		11/22/2011																											4,157												299,803			TVU		11/20/12																											2,841												199,978
		PU		11/22/2011															831				8,314				16,628																599,606			PU		11/20/12															2,364				5,563				11,126																401,315
		SAR		11/22/2011																															47,511			$	72.12				599,114			SAR		11/20/12																															32,441				76.18				391,887
Jeffrey S. Sherman		PIP		N/A			328,219				437,625				875,250																															PIP		N/A			326,025				472,500				945,000
		TVU		11/22/2011																											3,882												279,970			TVU		11/20/12																											4,268												300,425
		PU		11/22/2011															776				7,764				15,528																559,940			PU		11/20/12															3,551				8,355				16,710																602,730
		SAR		11/22/2011																															44,364			$	72.12				559,430			SAR		11/20/12																															48,727				76.18				588,622
Suketu Upadhyay(6)																																														TVU		11/20/12																											1,137												80,033
																																														PU		11/20/12															946				2,225				4,450																160,512
																																														SAR		11/20/12																															12,976				76.18				156,750

 

(1)	Award Type:

PIP = Performance Incentive Plan

TVU = Time VestedTime-Vested Unit

PU = Performance Unit

SAR = Stock Appreciation Right

 

(2)

The amounts shown represent the range of possible dollar payouts that a named executive officer could have earnedearn under the BD Performance Incentive PlanPIP for fiscal year 2012,2013, based on certain assumptions. Actual payments under the Performance Incentive Plan for fiscal year 20122013 are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 39. The amount in the “Threshold” column assumes BD achieved the minimum performance level,levels, resulting in available funding for awards at 75%69% of target, and that the named executive officer received a payment equal to 75%69% of his award target. Because the Compensation Committee has discretion in setting PIP awards, actual awards may be higher or 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. Messrs. Elkins and Upadhyay also were not eligible for PIP awards for fiscal year 2013, as they were not employed by BD at the end of the fiscal year.

 

(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 to determine the grant date fair value of these awards, see Note 7 to the consolidated financial statements that are included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2012.2013.

(6)	Mr. Upadhyay forfeited his fiscal year 2013 equity-based compensation awards upon his resignation from BD.

Description of Awards

Performance Incentive Plan

The BD Performance Incentive Plan (“PIP”)PIP provides an opportunity for annual cash incentive payments to be made to eligible associates. A more detailed discussion of the PIP and the performance targets established under the PIP for fiscal year 20122013 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.

Equity Compensation Awards

Performance Units. Performance Units are performance-based restricted stock units that vest three years after grant. The potential payouts under these awards range 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 years 2012-2014. The performance goals are established at the beginning2013-2015. A more detailed discussion of the performance periodtargets for these awards appears in the Compensation Discussion and include an average annual revenue growth target (after excluding the effectsAnalysis section of foreign currency translation) and an average return on invested capital target. Performance Units are issued in tandem with dividend equivalent rights (see below).this proxy statement. Performance Units are not transferable, and holders may not vote shares underlying the award until the shares have been distributed. Dividends do not accrue on these awards.

Time-Vested Units. A Time-Vested Unit (“TVU”)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 are 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. Dividends do not accrue on these awards.

Stock-Settled Stock Appreciation Rights. A stock appreciation right (“SAR”)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.

Dividend Equivalent Rights. Performance Units and TVUs are issued in tandem with dividend equivalent rights. Under these rights, the awards accrue dividend equivalents each time BD pays a dividend, which are deemed to 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 units are paid, in the form of shares, only if the underlying awards vest. The value of the dividend equivalent rights is included in the amounts shown in the above table and the “Stock Awards” column of the Summary Compensation Table.

Change of 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 51)52).

OUTSTANDING EQUITY AWARDS

The following table sets forth the outstanding equityequity-based compensation awards held by the named executive officers at the end of fiscal year 2012.2013.

Outstanding Equity Awards at 20122013 Fiscal Year-End

 

		Option Awards																				Stock Awards
Name		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 ($)(3)				Grant Date				Number of Securities Underlying Unexercised Options Exercisable (#)(1)				Number of Securities Underlying Unexercised Options Unexercisable (#)(1)				Option Exercise Price ($/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)
Vincent A. Forlenza			11/24/2003				26,000				0			$	38.78				11/24/2013																				11/23/2004				22,923				0			$	54.41				11/23/2014
			11/23/2004				22,923				0			$	54.41				11/23/2014																				11/21/2005				21,118				0			$	59.16				11/21/2015
			11/21/2005				21,118				0			$	59.16				11/21/2015																				11/21/2006				18,073				0			$	71.72				11/21/2016
			11/21/2006				18,073				0			$	71.72				11/21/2016																				11/20/2007				18,157				0			$	84.33				11/20/2017
			11/20/2007				18,157				0			$	84.33				11/20/2017																				11/25/2008				34,544				0			$	62.50				11/25/2018
			11/25/2008				25,908				8,636			$	62.50				11/25/2018																				11/24/2009				41,055				13,687			$	75.63				11/24/2019
			11/24/2009				23,370				27,372			$	75.63				11/24/2019																				11/23/2010				42,686				42,686			$	76.64				11/23/2020
			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
David V. Elkins			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				45,448				136,346			$	72.12				11/22/2021
			11/22/2011				0				63,399			$	72.12				11/22/2021																				11/20/2012				0				202,758			$	76.18				11/20/2022
			Various																				5,679				446,142				22,894				1,798,553				Various																				68,782				6,879,576				68,040				6,805,361
William A. Kozy			11/23/2004				22,923				0			$	54.41				11/23/2014																				11/21/2005				21,118				0			$	59.16				11/21/2015
			11/21/2005				21,118				0			$	59.16				11/21/2015																				11/21/2006				18,073				0			$	71.72				11/21/2016
			11/21/2006				18,073				0			$	71.72				11/21/2016																				11/20/2007				18,157				0			$	84.33				11/20/2017
			11/20/2007				18,157				0			$	84.33				11/20/2017																				11/25/2008				23,922				0			$	62.50				11/25/2018
			11/25/2008				17,940				5,982			$	62.50				11/25/2018																				11/24/2009				30,174				10,061			$	75.63				11/24/2019
			11/24/2009				20,116				20,119			$	75.63				11/24/2019																				11/23/2010				25,916				25,917			$	76.64				11/23/2020
			11/23/2010				12,958				38,875			$	76.64				11/23/2020																				11/22/2011				18,087				54,264			$	72.12				11/22/2021
			11/22/2011				0				72,351			$	72.12				11/22/2021																				11/20/2012				0				99,530			$	76.18				11/20/2022
			Various																				38,739				3,043,336				24,498				1,924,563				Various																				51,742				5,175,235				30,308				3,031,406
Gary M. Cohen			11/23/2004				23,177				0			$	54.41				11/23/2014																				11/21/2006				18,073				0			$	71.72				11/21/2016
			11/21/2005				21,353				0			$	59.16				11/21/2015																				11/20/2007				18,157				0			$	84.33				11/20/2017
			11/21/2006				18,073				0			$	71.72				11/21/2016																				11/25/2008				23,922				0			$	62.50				11/25/2018
			11/20/2007				18,157				0			$	84.33				11/20/2017																				11/24/2009				30,174				10,061			$	75.63				11/24/2019
			11/25/2008				17,940				5,982			$	62.50				11/25/2018																				11/23/2010				25,916				25,917			$	76.64				11/23/2020
			11/24/2009				20,116				20,119			$	75.63				11/24/2019																				11/22/2011				11,877				35,634			$	72.12				11/22/2021
			11/23/2010				12,958				38,875			$	76.64				11/23/2020																				11/20/2012				0				32,441			$	76.18				11/20/2022
			11/22/2011				0				47,511			$	72.12				11/22/2021																				Various																				35,194				3,520,104				14,259				1,426,185
			Various																				28,113				2,208,557				20,047				1,574,892
Jeffrey S. Sherman			11/23/2004				16,301				0			$	54.41				11/23/2014																				11/21/2006				12,769				0			$	71.72				11/21/2016
			11/21/2005				15,017				0			$	59.16				11/21/2015																				11/20/2007				12,380				0			$	84.33				11/20/2017
			11/21/2006				12,769				0			$	71.72				11/21/2016																				11/25/2008				16,408				0			$	62.50				11/25/2018
			11/20/2007				12,380				0			$	84.33				11/20/2017																				11/24/2009				19,500				6,502			$	75.63				11/24/2019
			11/25/2008				12,306				4,102			$	62.50				11/25/2018																				11/23/2010				18,598				18,600			$	76.64				11/23/2020
			11/24/2009				13,000				13,002			$	75.63				11/24/2019																				11/22/2011				11,091				33,273			$	72.12				11/22/2021
			11/23/2010				9,299				27,899			$	76.64				11/23/2020																				11/20/2012				0				48,727			$	76.18				11/20/2022
			11/22/2011				0				44,364			$	72.12				11/22/2021																				Various																				27,776				2,778,156				16,476				1,647,930
Suketu Upadhyay																																							11/23/2010				2,668				0			$	76.64				12/20/2013
			Various																				20,452				1,606,709				16,227				1,274,793				11/22/2011				2,673				0			$	72.12				12/20/2013

 

(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.

Set forth below is the value of the exercisable options and SARs held by named executive officers at the end of fiscal year 2012.2013. The value represents the difference between $78.56,$100.02, the closing price of BD common stock on September 30, 2012,2013, 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.officers upon exercise. Messrs. Elkins and Reidy did not have any outstanding equity awards at the end of fiscal year 2013.

Name		Value of Vested Options and SARs				Value of Vested Options and SARs
Vincent A. Forlenza		$	2,658,670			$	7,268,275
David V. Elkins			72,996
William A. Kozy			1,458,940				4,403,377
Gary M. Cohen			1,469,634				3,367,131
Jeffrey S. Sherman			1,025,992				2,391,098
Suketu Upadhyay							136,955

 

(2)

The amounts shown in this column include grants of restricted stock unit awards that are not performance-based. These include TVUs granted on November 22, 2011 and November 20, 2012, respectively, which vest three years after grant. The amounts shown for thecertain 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 includes shares under the Performance Units granted on November 23, 2010, which cover the 2011-2013 fiscal year period.

 

(3)	Market value has been calculated by multiplying the number of unvested units by $78.56,$100.02, the closing price of BD common stock on September 30, 2012.2013. 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, with respect to the November 2011 grant, accrued dividend shares. Dividends do not accrue on the November 2012 grant. The actual number of shares issued under these awards will be based on BD’s performance over the applicable performance period.

 

For Mr. Forlenza:
Grant Date		Number of Shares Issuable		Performance Period				Vesting Date
11/23/2010		18,999			Fiscal years 2011-2013				11/23/2013
11/22/2011		32,57133,274			Fiscal years 2012-2014				11/22/2014
For Mr. Elkins:
Grant Date 11/20/2012		Number of Shares Issuable		Performance Period				Vesting Date
11/23/2010		11,53534,766			Fiscal years 2011-20132013-2015				11/23/2013
11/22/2011		11,359			Fiscal years 2012-2014				11/22/201420/2015
For Mr. Kozy:
Grant Date		Number of Shares Issuable		Performance Period				Vesting Date
11/23/2010		11,535			Fiscal years 2011-2013				11/23/2013
11/22/2011		12,96313,242			Fiscal years 2012-2014				11/22/2014
11/20/2012		17,066			Fiscal years 2013-2015				11/20/2015
For Mr. Cohen:
Grant Date		Number of Shares Issuable		Performance Period				Vesting Date
11/23/2010		11,535			Fiscal years 2011-2013				11/23/2013
11/22/2011		8,5128,696			Fiscal years 2012-2014				11/22/2014
11/20/2012		5,563			Fiscal years 2013-2015				11/20/2015
For Mr. Sherman:
Grant Date		Number of Shares Issuable		Performance Period				Vesting Date
11/23/2010		8,278			Fiscal years 2011-2013				11/23/2013
11/22/2011		7,9498,121			Fiscal years 2012-2014				11/22/2014
11/20/2012		8,355			Fiscal years 2013-2015				11/20/2015

STOCK OPTION EXERCISES AND VESTING OF STOCK UNITS

The following table contains information relating to the exercise of stock options and SARs, and the vesting of Performance Units and TVUs, during fiscal year 2012.2013.

Option Exercises and Stock Vested in Fiscal Year 20122013

 

		Option Awards								Stock Awards								Option Awards										Stock Awards
Name		Number of Shares  Acquired on Exercise (#)				Value Realized on Exercise(1)				Number of Shares  Acquired on Vesting (#)(2)				Value Realized on Vesting(3)				Number of Shares Acquired on Exercise (#)					Value Realized on Exercise ($)(1)					Number of Shares Acquired on Vesting (#)(2)					Value Realized on Vesting ($)(3)
Vincent A. Forlenza			0				0				8,069			$	573,787					26,000					1,277,869					0					0
William A. Kozy			0				0				5,588				397,363					22,923					759,966					0					0
Gary M. Cohen			0				0				5,588				397,363					44,530					1,858,654					0					0
Jeffrey S. Sherman																				31,318					1,110,837					0					0
David V. Elkins			0				0				5,607				415,703					29,380					125,924					0					0
Jeffrey S. Sherman			14,910			$	497,472				3,832				272,494
Suketu Upadhyay																				0					0					1,511					147,141

 

(1)

Represents the difference between the exercise price of the stock options and the fair market value of BD common stock at exercise. Mr. Cohen’s exercises amounts include 21,353 SARs resulting in the acquisition of 8,753 net shares. Mr. Sherman’s exercises amounts include 15,017 SARs resulting in the acquisition of 5,899 net shares. Mr. Elkins’ exercise of 29,380 SARs resulted in the acquisition of 1,567 net shares.

 

(2)

Shows for each named executive officer other than Mr. Elkins,There was no payout of the shares (including dividend reinvestment shares)Performance Units vesting in November 2011 under Performance Units thatfiscal year 2013, which covered the fiscal year 2009-20112010-2012 performance period. Includes forperiod, as the performance factor was zero. Mr. ElkinsUpadhyay vested in shares (including dividend reinvestment shares) vesting under TVUs granted in December 2008.September 2010.

 

(3)	Based on the closing price of BD stock of $71.11 on the vesting dateThe value for named executive officers other than Mr. Elkins. For Mr. Elkins,Upadhyay is based on the closing price of BD stock of $74.14$97.38 on his vestvesting date.

OTHER COMPENSATION

Retirement Plan

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. Forlenza, Kozy, Cohen and Sherman participate under the final average pay provisions of the plan, while Mr. Elkins participated 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.

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 nonqualified Deferred Compensation and Retirement Benefit Restoration Plan (the “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).

The Retirement Plan and the Restoration Plan generally provide retirement benefits on a “cash balance” basis. Under the cash balance provisions, an associate has an account that is increased by pay credits based on compensation, age and service, and by interest credits based on the rate prescribed by the plan.

Prior to January 1, 2013, benefits were based on a “final average pay” formula for associates who were hired before April 1, 2007 and who did not elect to be covered under the cash balance formula. Effective

January 1, 2013, all final average pay participants were converted to the cash balance formula with an opening cash balance equal to the actuarial present value of the final average pay benefit accrued, based on service and pay through December 31, 2012. Upon retirement, the value of this opening cash balance (with interest credits) is compared to the value of the December 31, 2012 benefit accrued under the final average pay formula and the greater of the two is payable to the participant. Benefits accrued after December 31, 2012 are determined under the cash balance formula only.

Estimated Benefits. The following table shows the lump sum actuarial present value on September 30, 20122013 of accumulated retirement benefits payable under our plans at the earliest date on which the named executive officer can retire without any reduction in retirement benefits, assuming benefits payable as a single life 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 Notenote 8 to the consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2012.2013.

PENSION BENEFITS AT 20122013 FISCAL YEAR-END

 

Name		Plan name		Number of years credited service		Present value of accumulated benefit				Plan name					Number of years credited service (#)(1)					Present value of accumulated benefit ($)					Payments during last fiscal year ($)
Vincent A. Forlenza		Retirement Plan		32		$	1,622,667			Retirement Plan					33							1,522,552					0
		Restoration Plan		32			7,166,640			Restoration Plan					33							8,051,507					0
David V. Elkins		Retirement Plan		4			43,874
Christopher R. Reidy										Retirement Plan					1							6,346					0
		Restoration Plan		4			98,387
William A. Kozy		Retirement Plan		38			1,841,192			Retirement Plan					39							1,832,617					0
		Restoration Plan		38			6,297,495			Restoration Plan					39							7,047,225					0
Gary M. Cohen		Retirement Plan		29			1,492,412			Retirement Plan					30							1,452,860					0
		Restoration Plan		29			4,978,947			Restoration Plan					30							4,833,706					0
Jeffrey S. Sherman		Retirement Plan		9			142,362			Retirement Plan					10							316,707					0
		Restoration Plan		9			309,837			Restoration Plan					10							739,485					0
David V. Elkins										Retirement Plan					4							0					44,147
										Restoration Plan					4							0					128,659
Suketu Upadhyay										Retirement Plan					3							36,683					0
										Restoration Plan					3							20,547					0

(1)	Years of credited service are rounded up.

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.Benefits

Final Average Pay Provisionsaverage pay provisions used to determine benefits accrued prior to January 1, 2013. 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:

(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.

The final average pay formula does not apply to any service rendered or compensation earned after December 31, 2012.

Cash Balance Provisionsbalance provisions. Each month, an associate’s cash balance account is credited with 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:

 

Age plus years of Credited Servicecredited service as of the upcoming December 31		Credit Percentagepercentage
Less than 40		3%
40-49		4%
50-59		5%
60-69		6%
70 or more		7%

In addition, each month the associate’s account is credited with interest. The rate used during the year is determined based on the 30-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. Forlenza and Kozy are currently eligible for early retirement under the plans.

UnderFor benefits earned prior to January 1, 2013 under the final average pay provisions of the Retirement Plan, an associate’s pension benefit is reduced by 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 final average pay benefit would not be reduced, because the sum of the associate’s age and service equals 85.

Under the cash balance provisions, the amount of the associate’s benefit will be the associate’s vested 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.

For those named executive officers who formerly participated in the final average pay formula and were converted to cash balance, the portion of the cash balance account attributable to the converted final average pay benefit is compared to the value of the final average pay benefit accrued through December 31, 2012 under the final average formula. The result that produces the higher benefit is payable.

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 a 60-month minimum guarantee or a 120-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 the 60-month option is chosen, and 7% if the 120-month option is chosen.

Deferred Compensation

Cash Deferrals. The BD Deferred Compensation and Retirement Benefit Restoration Plan is a nonqualified plan thatalso allows an eligible BD associate to defer receipt of up to 75% of salary and/or up to 100% of a PIP award until the date or dates elected by the associate. The amounts deferred are invested in shares ofa BD common stock account or in cash accounts that mirror the gains and/or losses of several different publicly available

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 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.

Withdrawals and Distributions. Participants may elect to receive deferred amounts either while they are still employed at BD or following termination of employment. Participants may elect to receive distributions in installments or in a lump sum. Except in the case of an unforeseen emergency, participants may not withdraw deferred funds prior to their scheduled distribution date.

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 these plansthe plan does not exceed threetwo times the limit for qualified plans.

Unfunded Liability. BD is not required to make any contributions to the plan with respect to its obligations to pay deferred compensation. BD has unrestricted use of any cash 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 cash and/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.

Account Information. The following table sets forth information regarding activity during fiscal year 20122013 in the plan accounts maintained by the named executive officers.

NONQUALIFIED DEFERRED COMPENSATION IN FISCAL YEAR 20122013

 

Name		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)				Executive contributions  in last fiscal year ($)(1)				Registrant contributions in last fiscal year ($)(2)				Aggregate earnings in last fiscal year ($)				Aggregate withdrawals/ distributions ($)				Aggregate balance at last fiscal year-end ($)(3)
Vincent A. Forlenza		$	106,385			$	22,050			$	153,726			$	1,030,295				161,254				22,500				178,688				0				1,392,736
David V. Elkins			81,779				22,050				22,981				191,463
Christopher R. Reidy																			3,427				2,570				22				0				3,449
William A. Kozy			94,196				22,050				151,051				1,073,830				112,393				22,500				183,678				0				1,392,866
Gary M. Cohen			64,256				22,050				474,893				3,794,073				51,342				22,500				706,170				0				4,574,085
Jeffrey S. Sherman			48,658				18,675				218,101				2,065,407				57,593				22,500				484,467				0				2,629,967
David V. Elkins																			47,882				22,500				37,279				142,560				149,361
Suketu Upadhyay																			63,697				9,675				49,222				0				311,575

 

(1)

The following amounts are reported as compensation in the fiscal year 20122013 “Salary” column of the Summary Compensation Table appearing on page 39: Mr. Forlenza—$63,000;85,654; Mr. Reidy—$3,427; Mr. Elkins—$43,279;5,889; Mr. Kozy—$64,196;68,923; Mr. Cohen—$36,056;36,342; Mr. Sherman—$30,935; and Mr. Sherman—Upadhyay—$29,158.36,697. The remaining executive contributions relate to the deferral of fiscal year 20112012 PIP awards.awards that were payable in 2013.

(2)	Amounts in this column are included in the “All Other Compensation” column of the Summary Compensation Table.Table and reflect matching credits that will be credited to participant accounts in 2014.

(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.

PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE OF CONTROL

Payments Upon Terminationupon termination of Employmentemployment

The following table below shows the estimated payments and benefits that would be paid by BD to each of the named executive officerofficers listed below as a result of his termination of employment under various scenarios. The amounts shown assume termination of employment on September 30, 2012.2013. However, the actual amounts that would be paid to these named executive officers under each scenario can only be determined at the actual time of termination.

 

Name		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)				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)
Vincent A. Forlenza		$	21,111,753			$	15,087,862			$	13,266,256			$	16,200,350			$	16,433,156			$	25,362,309			$	30,282,770			$	30,900,174			$	31,529,520			$	33,409,520
David V. Elkins			5,756,612				—				1,221,751				2,446,499				3,071,499
Christopher R. Reidy																							1,954,125				—				318,353				13,596				688,596
William A. Kozy			13,496,021				12,481,515				12,035,714				13,299,168				12,830,653				18,414,722				20,325,900				20,946,160				21,082,852				22,482,852
Gary M. Cohen			9,143,252				—				3,320,170				4,301,483				4,617,353				15,408,993				—				8,725,085				11,859,534				13,071,534
Jeffrey S. Sherman			4,277,098				—				2,225,985				3,149,401				3,639,401				6,325,403				—				4,427,174				7,774,519				8,299,519

 

(1)

Includes amounts payable under change of control employment agreements (which are described below)., and amounts distributable under BD’s Retirement Plan and Restoration Plan, assuming payout as a lump sum. Also includes for Mr. Reidy the accelerated vesting of company matching contributions under BD’s 401(k) plan and the Restoration Plan. Does not include the accelerated vesting of equity compensation awards that occurs solely upon a change of control, (see table below). Because Messrs. Forlenzawhich is discussed below.

(2)

Includes amounts distributable under BD’s Retirement Plan and Kozy were retirement-eligible on September 30, 2012, also included for them are early retirement benefits,Restoration Plan, assuming payout as a lump sum, in the following amounts: Mr. Forlenza—$8,448,833; and Mr. Kozy—$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)

Amounts include early retirement benefits, assuming payout as a lump sum. Also includes the accelerated vesting of equity compensation awards upon retirement. The amounts shownincluded for equity compensation in the above table reflect the pro rata amount of Performance Units earned as of September 30, 2012,2013, with awards that vested in November 20122013 included at their actual payout and all other Performance Units at their target payout. Messrs. Elkins,Reidy, Cohen and Sherman were not currently eligible for retirement under BD’s plans as of September 30, 2012.2013.

 

(3)

Includes amounts distributable under BD’s Pension Plan and Restoration Plan, assuming payout as a lump sum, the accelerated vesting of equity compensation awards. Also includesawards, 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 provides for severance payments equal to two weeks’ salary for each year of service (assuming the associate grants a general release to BD), subject to a maximum of $500,000,$510,000, 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. Forlenza and Kozy, assuming payout as a lump sum.

 

(4)

Includes amounts distributable under BD’s Pension Plan and Restoration Plan, assuming payout as a lump sum, and the accelerated vesting of equity compensation awards. Also includes early retirement benefits for Messrs. Forlenza and Kozy, assuming payout as a lump sum.Mr. Reidy the accelerated vesting of company matching contributions.

 

(5)

Includes amounts distributable under BD’s Pension Plan and Restoration Plan, assuming payout as a lump sum, the accelerated vesting of equity compensation awards and life insurance benefits, and,benefits. Also includes for Messrs. Forlenza and Kozy,Mr. Reidy the lump sum paymentaccelerated vesting 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.company matching contributions.

The amounts shown in the above table do not include vested deferred compensation that the named executive officers would be paiddistributable upon termination, which is shown on page 48.49. 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, 2012.2013. The value of these vested options and SARs appears on page .45.

Payments Upon Termination Followingupon the termination of employment of Messrs. Elkins and Upadhyay

Mr. Elkins’ did not receive any severance or other payments upon his resignation from BD in November 2012, other than distribution of vested amounts under BD’s Retirement Plan and Restoration Plan, as shown on page 47, and vested deferred compensation. In connection with his resignation from BD in September 2013, Mr. Upadhyay received a Changepayment of Control$214,000 in recognition for his services as Acting CFO during the year and in exchange for certain releases and covenants given to BD. Mr. Upadhyay will not receive any other payments from BD in connection with his resignation, other than distribution of vested amounts under the BD Retirement Plan and Restoration Plan.

Payments upon termination under change of control agreements

BD has entered into agreements with each of the named executive officersMessrs. Forlenza, Reidy, Kozy, Cohen and Sherman that provide 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 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 “cause” or the executive terminates his employment for “good 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 highergreater 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“Incentive Payment”);

 

a lump sum severance payment equal to three times (two times in the case of Messrs. ElkinsReidy 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. ElkinsReidy 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. ElkinsReidy 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 (except for the agreement entered into with Mr. Reidy), if any payments or distributions made by BD to the executive as a result of a change of control would be subject to an excise tax imposed by the Internal Revenue Code, BD will make an additional tax reimbursement payment to the executive. As a result of this payment, the executive would retain the same amount, net of all taxes, that he would have retained had the excise tax not been triggered. This 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.

The following table sets forth the estimated benefits each named executive officer listed below 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, 2012.2013. These estimates are based on salary rates in effect as of September 30, 2012,2013, and use the 2012fiscal year 2013 target PIP awards of the named executive officers as the Highest Incentive Payment.

 

Name		Highest Incentive Payment				Severance Payment				Additional Retirement Benefits				Health and Welfare Benefits				Outplacement Services				Tax Reimbursement				Total				Incentive Payment				Severance Payment				Additional Retirement Benefits				Health  and Welfare Benefits				Outplacement Services				Tax Reimbursement				Total
Vincent A. Forlenza		$	1,080,000			$	5,940,000			$	817,103			$	36,000			$	100,000			$	4,649,817			$	12,622,920			$	1,128,000			$	6,204,000			$	434,280			$	40,500			$	100,000			$	6,987,356			$	14,894,136
David V. Elkins			618,750				2,487,500				121,875				24,000				100,000				2,404,487				5,756,612
Christopher R. Reidy																															122,610				1,595,220				92,250				27,000				100,000				0				1,937,080
William A. Kozy			707,575				4,102,725				643,884				36,000				100,000				—				5,590,184				770,000				4,410,000				308,700				40,500				100,000				3,635,697				9,264,897
Gary M. Cohen			481,020				3,215,911				5,310,321				36,000				100,000				—				9,143,252				484,560				3,270,780				3,140,091				40,500				100,000				4,074,826				11,110,757
Jeffrey S. Sherman			437,625				1,855,250				201,003				24,000				100,000				1,647,220				4,265,098				472,500				1,995,000				337,529				27,000				100,000				2,337,182				5,269,211

Accelerated Vestingvesting of Equity Compensation Awards Uponequity compensation awards upon a Changechange of Controlcontrol

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 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.

The following table sets forth the value to the named executive officers listed below of the accelerated vesting of the unvested equity compensation awards they held at the end of fiscal year 2012,2013, assuming a change of control of BD occurred on September 30, 2012.2013. The BD common stock closing price of $78.56$100.02 on September 30, 20122013 is used for purposes of these calculations.

 

Name		Time-vested restricted stock units				Performance Units				Options/ SARs				Total				Time-vested restricted stock units					Performance Units					Options/ SARs					Total
Vincent A. Forlenza		$	3,463,475			$	5,229,268			$	1,512,583			$	10,205,326				$	6,258,351				$	8,746,649				$	9,969,629				$	24,974,629
David V. Elkins			446,142				2,505,278				531,049				3,482,469
William A. Kozy			3,043,336				2,790,294				695,600				6,529,230					4,798,059					4,210,042					4,738,088					13,746,189
Gary M. Cohen			2,208,557				2,440,624				535,630				5,184,811					3,142,929					2,604,821					2,618,909					8,366,659
Jeffrey S. Sherman			1,606,709				1,834,297				443,244				3,884,250					2,507,402					2,493,799					2,683,420					7,684,621

The value of unvested restricted stock units is calculated by multiplying the shares distributable by $78.56.$100.02. The value of unvested options and SARs is calculated using the difference between the exercise price of each option or SAR and $78.56.$100.62.

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 restricted stock 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 performancevesting periods and would be based on BD’s actual performance for thosethe applicable performance 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 time-vested unitsTVUs held by the named executive officer vest pro rata based on the amount of the vesting period that had elapsed;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 performancevesting periods and would be based on BD’s actual performance for thosethe 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 restricted stock 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.

Proposal 2.

RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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, 2013.2014. A representative of E&Y is expected to attend the 2013 Annual Meetingmeeting to respond to appropriate questions and will have the opportunity to make a statement.

Listed below are the fees billed to BD by E&Y for services rendered during fiscal years 20122013 and 2011:2012:

 

		2012				2011						2013				2012
Audit Fees		$	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.		$	6,956,000			$	7,370,000			“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.
Audit Related Fees		$	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.		$	125,000			$	391,000			“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. 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.
Tax Fees		$	395,000			$	198,000			“Tax Fees” includes tax compliance, assistance with tax audits, tax advice and tax planning.		$	367,000			$	395,000			“Tax Fees” includes tax compliance, assistance with tax audits, tax advice and tax planning.
All Other Fees		$	3,000			$	18,000			“All Other Fees” includes various miscellaneous services.		$	3,000			$	3,000			“All Other Fees” includes various miscellaneous services.
Total		$	8,159,000			$	7,991,500					$	7,451,000			$	8,159,000

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”)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. All of the services listed in the above table were approved pursuant to this policy.

Audit Services. 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.

Non-Audit Services. 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.

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.

REPORT OF THE AUDIT COMMITTEE

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’sBD’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’sBD’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.applicable auditing standards.

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’sBD’s Annual Report on Form 10-K for the fiscal year ended September 30, 2012,2013, for filing with the Securities and Exchange Commission.

AUDIT COMMITTEE

Basil L. Anderson, Chair

Catherine M. Burzik

Christopher Jones

Marshall O. Larsen

Gary A. Mecklenburg

James F. Orr

Rebecca W. Rimel

Bertram L. Scott

Proposal 3.

ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

The Compensation Discussion and Analysis beginning on page 24 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 2012 with respect to our Chief Executive OfficerCEO and the other officersindividuals named in the Summary Compensation Table on page 39 (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:

“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 a pay-for-performance philosophy that supports BD’s business strategy and aligns the interests of our executives with those of our shareholders. At the same time, we believe our program does not encourage excessive risk-taking by management. We believe that the compensation actions taken for 2012fiscal year 2013 appropriately reflected the performance of our named executivesexecutive officers and BD 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 against the targets set by our Compensation and Benefits Committee.

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. BD holds an advisory vote onto approve named executive officer compensation on an annual basis.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 3.

 

Proposal 4.

AMENDMENT TOAPPROVAL OF MATERIAL TERMS OF PERFORMANCE GOALS UNDER BD’S RESTATED CERTIFICATE OF INCORPORATION

The Board of Directors is unanimously recommending approval of an amendment to BD’s Restated Certificate of Incorporation (the “Restated Certificate”) that would eliminate Article VI of the Restated Certificate. The text of Article VI is attached to this proxy statement as Appendix A. Article VI is what is commonly referred to as a “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 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.

The Board has carefully considered the advantages and disadvantages of maintaining the fair price provision in the Restated Certificate of Incorporation, and has determined that it is appropriate to eliminate this provision by removing Article VI in its entirety from the Restated Certificate. The Board understands that eliminating supermajority voting provisions is considered by many commentators and investors to be a best practice in

corporate governance. In addition, the Board notes that the New Jersey Shareholders Protection Act (the “Act”), which was enacted into law after the fair price provision was added to the Restated Certificate, provides similar protections 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 a corporation’s outstanding voting stock (an “interested shareholder”) for a period of five years after the date such person reaches the 10% threshold, unless the board of directors approved the business combination prior to that date. The Act also prohibits a business 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 acquirer meets certain minimum price requirements.

To be approved, Proposal 4 must receive “For” votes from at least two-thirds of the shares of common stock 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 do not approve the amendment, Article VI of the Restated Certificate will remain in effect.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 4.

Proposal 5.

AMENDMENTS TO THE 2004 EMPLOYEE AND DIRECTOR EQUITY-BASED COMPENSATION PLAN

OurBD is seeking shareholder approval of the material terms of performance goals under the 2004 Employee and Director Equity-Based Compensation Plan (the “2004 Plan”) allows us.

Background

Section 162(m) of the Internal Revenue Code limits the deductions a publicly-held company can claim for compensation in excess of $1 million paid in a given year to its CEO and its three other most highly-compensated executive officers (other than the chief financial officer) (these officers are generally referred to as the “covered employees”). “Performance-based” compensation that meets certain requirements is not counted against the $1 million deductibility cap. Stock options and SARs generally qualify as performance-based compensation. Other awards that we grant equity-based compensation. As we describe elsewhere in this proxy statement, equity-basedmay qualify as performance-based compensation continuesif the payment, retention or vesting of the award is subject to bethe achievement during a significant elementperformance period of our overallthe performance goals selected by the Compensation Committee. The Compensation Committee retains the discretion to set the level of performance for a given performance measure under a performance-based award. For such awards to qualify as performance-based 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 andamong other employees with those ofthings, BD’s shareholders and encouragesmust approve the achievementmaterial terms of importantthe performance goals.goals at least every five years.

Proposed AmendmentsEmployees affected

The Board of Directors has approved,BD associates whose compensation would be subject to shareholder approval, two amendmentsthe performance goals are the members of the BD Leadership Team. The BD Leadership Team consists of 57 members of senior management, and includes the

named executive officers (other than Messrs. Elkins and Upadhyay) listed in the Summary Compensation Table on page 39. Although federal tax laws only limit tax deductibility for compensation paid to the 2004 Plan. The first iscovered employees mentioned above, we may apply the performance goals to amendall members of the 2004 Plan to extend its term. The second is to amendBD Leadership Team, so that, in the 2004 Plan to increaseevent any of them becomes a covered employee during 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 termtime that expires on February 11, 2014, following which no further awardsthey hold an award, such award 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.tax-deductible as performance-based compensation.

Performance goals

Increase in Shares. As of November 30, 2012, 3,646,483 shares remained available for the issuance ofPerformance-based awards under the 2004 Plan. This is less than the amount of shares we typically use per year to make equity-compensation awards. We do not believe there are enough remaining shares to continue using equity-based compensation as a significant element of our compensation program. Accordingly, the Board of Directors has approved an amendment to Section 5 of the 2004 Plan to increase the shares available for awards by 7,000,000 shares, from 26,800,000 to 33,800,000, subject to shareholder approval of the amendment. 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(other than stock options and SARs) will, if the Compensation Committee intends any such award to qualify as performance-based compensation under Section 162(m), 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 of these performance measures is defined below.

“Return On Net Assets” for a period means 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.

“Revenue Growth” means 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.

“Return On Common Equity” for a period means net income less preferred stock dividends divided by total shareholders’ equity, less amounts, if any, attributable to preferred stock.

“Total Shareholder Return” means the sum of the appreciation rights (“SARs”). This would include,in BD’s stock price and dividends paid on the common stock of BD over a given period of time.

“Earnings Per Share” means earnings per share calculated in accordance with U.S. Generally Accepted Accounting Principles.

“Net Revenue Per Employee” in a period means net revenue divided by the average number of employees of BD, with average defined as the sum of the number of employees at the beginning and ending of the period divided by two.

“Market Share” means the percent of sales of the total available market in an industry, product line or product attained by BD or one of its business units during a time period.

“Return on Invested Capital” for instance, Performance Unitsa period means earnings before interest, taxes, depreciation and Time-Vested Units.amortization divided by the difference of total assets less non-interest bearing current liabilities.

“Net Income” means net income calculated in accordance with U.S. Generally Accepted Accounting Principles.

Maximum award amounts

ToThe maximum number of shares that may be earned by and payable to a member of the extent any outstandingBD Leadership Team pursuant to a performance-based award granted under the 2004 Plan(other than stock options or SARs) is canceled or expires, the150,000 shares, subject to the award will become available again for issuance. Also, shares underlyingadjustment as discussed below. It is BD’s practice to grant performance-based awards issued in assumption of, or substitution for, awards issued by a company acquired byto BD (referred to as “Substitute Awards”) will not reduce the number of shares remaining available for issuance under the 2004 Plan.Leadership Team members only once per fiscal year.

A copyMaterial terms 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 Planplan

The following is a summary of the material features of the 2004 Plan, as proposed to be amended.Plan. This summary is qualified in its entirety by the full text of the 2004 Plan.

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 29,60029,979 employees as of September 30, 2012.2013. Non-management directors of BD are also eligible to participate in the 2004 Plan. There are currently 1314 non-management members of the Board of Directors, and it is anticipated that an additional non-management director will be elected to the Board prior to the Annual Meeting.Directors. No participant may receive stock options andor 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.

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”).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 that 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.

Exercise Price. Except in the case of 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, 201229, 2013 was $            .$108.59.

Exercise of Award; Form of Consideration. The Compensation Committee determines the times at which options and other purchase rights may be exercised, 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).

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 for three months 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, all 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 determined by the Compensation Committee.

Other Stock-Based Awards. The Compensation Committee may grant and establish the terms and conditions of other stock-based awards, such as dividend equivalent rights.

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 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 that may be earned by an executive pursuant to any such performance-based award is 150,000 shares.

Certain Adjustments. If a recapitalization, stock split or other 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.

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 Compensation Committee. However, in no event

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 certain awards have the right to defer the receipt of any or all of the 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.

Change in Control

Unless otherwise specified by the Compensation Committee, upon a change“change in controlcontrol” (as defined in the 2004 Plan), all awards issued under the 2004 Plan will become fully vested and exercisable, and any restrictions applicable to any award will lapse.

Amendment and Termination

The Board of Directors may amend, discontinue or terminate the 2004 Plan or any portion of the 2004 Plan at any time. Shareholder approval may also 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 previously granted under the 2004 Plan.

New Plan Benefits

The issuance of any awards under the 2004 Plan will be at the discretion of the Compensation Committee.is discretionary. 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 20122013 fiscal year. Mr. Reidy joined BD in July 2013 and did not receive any awards under the 2004 Plan during the 2013 fiscal year. More information on the awards made during the 20122013 fiscal year to the named executive officers appears in the “Grants of Plan-Based Awards in Fiscal Year 2012”2013” table on page 41.42.

Becton, Dickinson and Company

2004 Employee and Director Equity-Based Compensation Plan

 

		Stock Appreciation				Performance				Restricted
Name and Position		Rights				Units				Stock Units
Vincent A. Forlenza Chairman and Chief Executive Officer			181,794				31,814				15,907
David V. Elkins Executive Vice President and Chief Financial Officer			63,399				11,095				5,547
William A. Kozy Executive Vice President			72,351				12,661				6,331
Gary M. Cohen Executive Vice President			47,511				8,314				4,157
Jeffrey S. Sherman Senior Vice President and General Counsel			44,364				7,764				3,882
All executive officers as a group			483,205				84,561				42,280
All non-employee directors as a group			0				0				26,721
BD employees other than executive officers, as a group			948,353				165,966				1,080,052

		Stock Appreciation				Performance				Time-Vested
Name and Position		Rights				Units				Units
Vincent A. Forlenza Chairman, Chief Executive Officer and President			202,758				34,766				17,758
William A. Kozy Executive Vice President and Chief Operating Officer			99,530				17,066				8,717
Gary M. Cohen Executive Vice President			32,441				5,563				2,841
Jeffrey S. Sherman Senior Vice President and General Counsel			48,727				8,355				4,268
Suketu Upadhyay Former Acting Chief Financial Officer			12,976				2,225				1,137
All current executive officers as a group			491,323				84,246				48,404
All current non-employee directors as a group			0				0				28,109
All employees other than executive officers, as a group			1,032,992				177,123				1,133,172

Tax Matters

The following is a brief 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.

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 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.

Incentive Stock Options. An optionee will not recognize any taxable income at the time of grant or exercise of an ISO while an employee (or within three months after termination of employment), and BD 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 BD 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 an item of income for purposes of the optionee’s alternative minimum tax. A sale or exchange by an optionee of shares acquired upon the exercise of an ISO more than one year after the transfer of the shares to such optionee and more than two years after the date of grant of the ISO will result in any difference between the net 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 will 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 amount of such 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.

Restricted Stock. A grantee will not recognize any income upon the receipt of restricted stock, unless the holder elects under Section 83(b) of the Code, within thirty days of such receipt, to recognize ordinary income in an amount equal to the fair market value of the restricted 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 were paid as a 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 fair market value of such shares on such date, less any amount paid for the shares. At the time the holder recognizes ordinary income, BD generally will be entitled to a deduction in the same 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.

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 same amount.

To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

Equity Compensation Plan Information

The following table provides certain information as of September 30, 20122013 regarding BD’s equity compensation plans.

 

Plan Category		(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))				(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))
Equity compensation plans approved by security holders			15,253,244	(2)		$	67.58				5,776,296	(3)			13,541,144	(2)		$	72.38				9,960,371	(3)
Equity compensation plans not approved by security holders			1,913,084	(4)		$	32.07				0	(5)			1,563,607	(4)		$	n/a				0	(5)
Total			17,166,328			$	67.55				5,776,296				15,104,751			$	72.38				9,960,371

 

(1)

Shares issuable pursuant to outstanding awards of Performance Units and other restricted stock units under the 2004 Plan and the BDBD’s Stock Award Plan, as well as shares issuable under BD’s 1996 Directors’ Deferral Plan (the “Directors’ Deferral Plan”), Deferred Compensation and Retirement Benefit Restoration Plan (the “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) 11,739,5109,029,318 shares issuable under outstanding stock options and stock appreciation rights andSARs, (ii) 3,513,7341,650,890 shares distributableissuable under Performance Unit awards (assuming maximum payout) and other2,787,464 shares issuable under TVU awards granted under the 2004 Plan, and (iii) 73,472 shares issuable under restricted stock unit awards granted under the 2004 Plan and Stock Award Plan (with Performance Unit awards listed at target payout amounts).Plan. The weighted average remaining term of the outstanding options and SARs is 6.11 years.

 

(3)	Represents shares available for issuance under the 2004 Plan. The 1994 Restricted Stock Plan and includes 4,141,822 shares available for Non-Employee Directors was terminated in September 2012.“full share” awards, assuming maximum payout of outstanding Performance Units.

 

(4)

Includes 11,1244,320 shares issuable pursuant to outstanding stock options granted under BD’s Non-Employee Directors 2000 Stock Option Plan.Plan (the “Directors 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 1,361,952103,637 shares issuable under the GSIP, based on participant account balances as of September 30, 2012.Directors’ Deferral Plan, 400,596 shares issuable under the Restoration Plan, and 1,059,374 shares issuable under the GSIP.

 

(5)

Does not includeNot 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.

Deferred Compensation and Retirement Benefit Restoration Plan. Information regarding the Deferred Compensation and Retirement Benefit Restoration Plan can be found beginning on page 4649 of this proxy statement. The shares held in the plan as of September 30, 20122013 include 81,32869,358 shares acquired by participants through cash deferrals and 359,123331,238 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 the 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 trust. 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.

Global Share Investment Program. BD maintains a Global Share Investment Program (“GSIP”)GSIP for its non-U.S. associates in certain jurisdictions outside of 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.

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 units awards.unit awards, which are otherwise distributable when they leave the Board. 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 FOR PROPOSAL 4.

Proposal 5.

APPROVAL OF MATERIAL TERMS OF PERFORMANCE GOALS UNDER BD’S PERFORMANCE INCENTIVE PLAN

BD is seeking shareholder approval of the material terms of performance goals under the Performance Incentive Plan (referred to as the “PIP”).

Background

As discussed in Proposal 4, Section 162(m) of the Internal Revenue Code limits the deductions that may be claimed for certain compensation unless it qualifies as performance-based compensation. Awards under the PIP (referred to as “Awards”) generally qualify as performance-based compensation since the payment of the Award is subject to the achievement during a performance period of the performance goals selected by the Compensation Committee. The Compensation Committee retains the discretion to set the level of performance for a given performance measure under the PIP. As discussed in Proposal 4, for Awards to qualify as performance-based compensation, among other things, BD’s shareholders must approve the material terms of the performance goals at least every five years.

Employees affected

See Proposal 4 for a discussion of which BD associates have compensation that would be subject to the performance goals. Proposal 4 discusses which BD associates would be subject to the Section 162(m) limits on tax deductions, as well as our discretion to subject the compensation of any member of BD Leadership Team to the performance goals.

Performance goals

Awards will, if the Compensation Committee intends any such Award to qualify as performance-based compensation under Section 162(m), 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 of which is defined in Proposal 4.

Maximum award amounts

The maximum Award that may be earned by and payable to a member of the BD Leadership Team with respect to a fiscal year is $3,000,000.

Other material terms of the PIP

Types of Awards. The PIP authorizes the payment of lump sum cash incentive payments to eligible employees of BD and its subsidiaries.

Eligibility. Exempt employees of BD and its subsidiaries at certain management levels or with certain responsibilities (referred to herein as “Eligible Employees”) are eligible to participate in the PIP. Persons promoted or newly hired to an eligible position may be considered for a pro rata Award. Non-management directors are not eligible to participate in the PIP.

Awards to the CEO are approved by the Board of Directors. Awards to BD’s other executive officers are approved by the Compensation Committee. All other Awards are made at the discretion of the Performance Incentive Committee (discussed below). In addition, the total Awards paid to BD’s executive officers for any fiscal year may not, barring special circumstances, as determined by the Compensation Committee, exceed 3% of BD’s reported after-tax net income for such fiscal year. As of September 30, 2013, 3,972 persons were eligible to participate in the PIP.

Administration. In general, the PIP is administered by the Performance Incentive Committee, which consists of at least three BD associates, including the CEO and other senior executives designated by the CEO. With respect to participation in the PIP by executive officers, however, the PIP is administered by the Compensation Committee and the Board.

Terms of Awards.Awards under the PIP are expressed as a percentage of an Eligible Employee’s base salary. Target award amounts range from 10% to 120% of an Eligible Employee’s base salary. Awards become payable following the close of the fiscal year for which they are awarded.

Awards are tied to BD’s overall performance, as well as the performance of the Eligible Employee and, for certain associates, of his or her business unit, region or country, or function. Accordingly, an Eligible Employee may receive less or more than the Eligible Employee’s target incentive payment. Each fiscal year, the Compensation Committee establishes performance objectives for BD under the PIP, while the Performance Incentive Committee sets certain financial and operational objectives for each business unit, region or country, and function. Awards are made from a pool that is funded based in part on BD’s performance against the BD performance target or targets established by the Compensation Committee.

After the funding level for the Award pool has been established, the Performance Incentive Committee determines performance ratings for each business unit, region or country, and function. These performance ratings determine the amount of the overall Award pool that will be allocated for the payment of Awards to Eligible Employees within those units, regions, countries or functions.

Termination of Employment.Upon termination of employment due to death, disability or retirement during a fiscal year, an Eligible Employee will be eligible to receive an Award with respect to the portion of the fiscal year that the person was employed with BD.

Term of the PIP.The PIP has no termination date, and will remain in effect until terminated by the Board of Directors.

Withholding.All payments of cash under the PIP will be subject to withholding of all applicable federal, state, local or other taxes, as determined by BD.

Amendment or Termination.The PIP may be amended or terminated by the Board of Directors at any time, without a vote of security holders. Such amendments may increase the cost of the PIP to BD or alter the allocation of the benefits under the PIP as between the Eligible Employees. No such amendment, however, may increase the amount of an Award to a senior executive that is intended to qualify as qualified performance-based compensation.

New PIP Benefits.Future grants of Awards that may be made to Eligible Employees are discretionary, as described above, and, therefore, are not determinable at this time. The following table reflects the Awards that were granted under the PIP for fiscal 2013.

Name and Position		Award
Vincent A. Forlenza Chairman, Chief Executive Officer and President			1,225,000
Christopher R. Reidy Executive Vice President of Administration and Chief Financial Officer			131,192
William A. Kozy Executive Vice President and Chief Operating Officer			865,095
Gary M. Cohen Executive Vice President			466,631
Jeffrey S. Sherman Senior Vice President and General Counsel			530,854
All executive officers as a group			5,084,387
All employees other than executive officers, as a group			93,279,270

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 5.

Proposal 6.

SHAREHOLDER PROPOSAL REGARDING INDEPENDENT BOARD CHAIR

Kenneth Steiner, 14 Stoner Avenue, 2M, Great Neck, NY, has given notice that he intends to present for action at the annual meeting the following stockholder proposal. Information regarding Mr. Steiner’s share ownership in BD will be provided to shareholders upon request.

Proposal 6—Independent Board Chairman

RESOLVED: Shareholders request that our board of directors adopt a policy that, whenever possible, the chairman of our board of directors shall be an independent director. An independent director is a director who has not served as an executive officer of our Company. This policy should be implemented so as not to violate any contractual obligations in effect when this resolution is adopted. The policy should also specify how to select a new independent chairman if a current chairman ceases to be independent between annual shareholder meetings. To foster flexibility, this proposal gives the option of being phased in and implemented when our next CEO is chosen.

When our CEO is our board chairman, this arrangement can hinder our board’s ability to monitor our CEO’s performance. Many companies already have an independent Chairman. An independent Chairman is the prevailing practice in the United Kingdom and many international markets. This proposal topic won 50%-plus support at three major U.S. companies in 2012 including 55%-support at Sempra Energy.

This proposal should also be more favorably evaluated due to the deficiencies in our company’s corporate governance as reported in 2013:

GMI Ratings, an independent investment research firm rated our company F in executive pay and D in governance. Our company was negatively flagged by GMI for related party transactions, overboarded directors, overboarded audit committee members and potential dilution of greater than 10% in traded shares. Henry Becton, our Lead Director, was inside-related and had 26-years tenure—two big independence concerns. Adel Mahmoud and Rebecca Rimel should be ashamed of each owning less than 150 shares.

According to GMI our CEO had the potential for an excessive golden parachute and our company paid long-term incentives to our CEO for underperformance. There was no executive incentive pay linked to sustainability performance.

On governance matters our management had the unilateral right to amend the charter and bylaws without shareholder approval. We had no right to act by written consent or shareholder right to call a special meeting by 10% shareholders. We had no confidential voting and no cumulative voting.

There was no environmental management system for some or all of our operations. BDX was subject to fine, settlement or conviction or investigation for engaging in anti-competitive behavior such as price fixing, bid rigging or monopolistic practices in the last 2 years. BDX had higher accounting and governance risk than 89% of companies. BDX had not implemented OSHAS 18001 as its occupational health and safety management system.

Returning to the core topic of this proposal from the context of our clearly improvable corporate governance, please vote to protect shareholder value:

Independent Board Chairman—Proposal 6

* * *

BOARD OF DIRECTORS’ RESPONSE

The Board of Directors recommends a vote AGAINST Proposal 6 for the following reasons.

The Board has in-depth knowledge of BD’s strategic goals, the opportunities and challenges facing the company, its culture, and the capabilities of senior management. As such, the Board is uniquely positioned to determine what the most effective Board leadership structure for BD is at any given time. Accordingly, rather than adopting a “one-size-fits-all” checklist approach to corporate governance, the Board believes it is important that it have the flexibility to determine who should serve in the roles of Chairman and CEO, and whether these roles should be combined.

Our Corporate Governance Principles leave it to the Board to decide what Board leadership structure best serves BD and its shareholders. At the present time, the Board believes that the most effective leadership structure for BD is for our CEO to also serve as Chairman. This combined role allows one person to speak for and lead the company and Board, creates clear lines of authority and accountability, and provides the necessary leadership to execute BD’s strategy. Mr. Forlenza’s over 30 years of experience at BD and knowledge of its complex businesses, along with his extensive industry expertise, also make him uniquely qualified to lead the Board on the most important issues facing the company.

At the same time, the Board recognizes the need to have effective, independent Board oversight of management. To that end, the Board appoints a Lead Director from among the independent directors whenever the Chairman is not independent. The Lead Director, among other things, chairs meetings of the non-management directors, has the authority to call meetings of the non-management directors, serves as a liaison between the Chairman and the non-management directors, and approves meeting agendas and schedules and information sent to the Board. We believe this Lead Director role provides effective independent Board oversight of management and coordination between the Chairman and the rest of the Board. A full list of the Lead Director’s authority and responsibilities can be found on page 16 of this proxy statement.

Other aspects of BD’s governance practices also enable effective independent oversight of management. The Board is composed of 15 members, all of whom, other than Mr. Forlenza, are independent. In addition, all members of the Board’s operating committees are independent, which allows for independent oversight of such important matters as the integrity of BD’s financial statements, legal compliance, risk management and executive compensation. Also, the CEO’s performance is evaluated on an annual basis by the independent directors. The Board and each of its operating committees also meet regularly in executive session without management present, have unlimited access to other members of management and have the authority to retain independent outside advisors to the extent they deem appropriate.

Based on the foregoing, we believe there are clear advantages to maintaining a flexible, tailored approach to determining BD’s Board leadership structure, and that adopting a policy that requires an independent Chairman is not in the best interests of BD and its shareholders.

Also, while the Board takes issue with a number of claims in the proponent’s supporting statement, we want to address two that we find particularly egregious. First, the proponent misrepresents the equity interests of two of our directors because he fails to include the restricted stock units these directors hold. The value of these units is tied directly to the BD stock price, but, unlike shares of stock, cannot be transferred. In addition, embedded in BD’s corporate culture is a strong commitment to corporate responsibility and legal compliance, and BD has not been subject to any fine, settlement or conviction, or, to our knowledge, investigation by any governmental body for anti-competitive behavior in the last two years.

ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSAL 6.

SHAREHOLDER PROPOSALS OR DIRECTOR NOMINATIONS FOR 20142015 ANNUAL MEETING

Any proposal that a shareholder wishes to submit for inclusion in BD’s proxy materials for the 20142015 Annual Meeting pursuant to SEC Rule 14a-8 must be received by BD not later than August 23, 2013.22, 2014. Notice of any other proposal or director nomination that a shareholder wishes to submit for consideration at the 20132015 Annual Meeting pursuant to BD’s By-Laws must be delivered to BD not earlier than October 1, 2013September 30, 2014 and not later than October 31, 2013.30, 2014. 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/.Any shareholder proposal or director nomination submitted to BD in connection with the 20142015 Annual Meeting should be addressed to: Corporate Secretary, BD,Becton, Dickinson and Company, 1 Becton Drive, Franklin Lakes, New Jersey 07417-1880.

Appendix A

Text of Article VI of BD’s Restated Certificate of IncorporationRECONCILIATION OF NON-GAAP FINANCIAL MEASURES

ARTICLE 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.

(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)Presented below 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 thecertain 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 assetsmeasures 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 Directorsnon-GAAP measures, 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 purposethe rules of the Becton, Dickinson and Company 2004 Employee and Director Equity-Based Compensation Plan isSEC. These non-GAAP measures are intended to provide aninvestors with additional information to analyze BD’s performance for the 2013 fiscal year and assess our 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 needcompensation plans. Non-GAAP measures should 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 willfulconsidered in isolation 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 shallare 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, or a disability insurance program maintainedsubstitute for, GAAP measures. Our non-GAAP measures may differ from similar measures used 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 unableother companies, even if similar terms are used 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

identify such measures.

 

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

		Twelve Months Ended September 30,								% Change
		2013				2012				Reported				FXN				FX Impact
Total Revenues		$	8,054			$	7,708				4.5				5.4				(0.9	)

 

(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 is26,800,00033,800,000 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.

(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 for which the exercise price is less than the Fair Market Value of a Share 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 afterthe 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 TO

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 7C…* * 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 7C…* * FROM NEWARK AIRPORT Take Rte. 78 West approx. 5 miles to Exit 48, Rte. 24 West. Take Exit 7C…* *

FROM THE NJ TURNPIKE

Take to Exit 14. Continue on Rte. 78 West approx. 5 miles to Exit 48, Rte. 24 West. Take Exit 7C…* *

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 7C…* *

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 7C…* *

FROM THE GARDEN STATE PARKWAY SOUTHBOUND

Take Exit 142 to Rte. 78 West. Continue to Exit 48, Rte. 24 West. Take Exit 7C…* *

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 7C…* *

* * FROM EXIT 7C, JFK PARKWAY, LIVINGSTON/CALDWELL - 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.

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.

		Twelve Months Ended September 30,
		2013					2012
Reported Diluted Earnings per Share from Continuing Operations			$	4.67				$	5.30
Charge associated with the pending litigation settlement related to indirect purchaser antitrust class action cases ($22 million or $14 million after-tax)				0.07					0.00
Charge associated with the unfavorable verdict returned in the lawsuit filed by RTI ($341 million or $211 million after-tax)				1.06					0.00
Non-cash pension settlement charges associated with lump sum benefit payments made primarily from the Company’s U.S. supplemental pension plan, as such payments exceeded the service and interest components of the plan’s pension cost in each year. The charges also included settlement losses associated with certain foreign pension plans. ($6 million or $4 million after-tax and $20 million or $13 million after-tax, respectively)				0.02					0.06
Adjusted Diluted Earnings per Share from Continuing Operations			$	5.81				$	5.37
Medical device excise tax which went into effect in January 2013 under the U.S. Patient Protection and Affordable Care Act ($40 million or $26 million after-tax)				0.13					0.00
Adjusted Diluted Earnings per Share from Continuing Operations without Medical Device Excise Tax			$	5.95				$	5.37
		Twelve Months Ended September 30, 2013
		Earnings per Share					Revenues					Free cash flow as % of sales
Reported performance			$	4.67				$	8,054					14.0	%
Charge associated with the pending litigation settlement related to indirect purchaser antitrust class action cases				0.07
Charge associated with the unfavorable verdict returned in the antitrust and false advertising lawsuit filed against the Company by RTI				1.06
Non-cash pension settlement charges associated with lump sum benefit payments made primarily from the Company’s U.S. supplemental pension plan, as such payments exceeded the service and interest components of the plan’s pension cost in each year. The charges also included settlement losses associated with certain foreign pension plans				0.02
Impact of acquisitions				0.02					(2	)				0.1	%
Impact of currency fluctuations versus the budget				(0.10	)				(23	)
Unbudgeted depreciation and amortization expense														(0.8	%)
Timing of certain tax payments														(0.6	%)
Adjusted performance			$	5.73				$	8,029					12.7	%

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		2011-2013 Performance
		Average Revenue Growth
Reported				4.2	%
Impact of acquisitions				(0.5	%)
Adjusted				3.7	%

		2013 PIP targets
		EPS				Revenues
Reported growth			4.5%				2.8	%
Budgeted impact of currency translation			2.9%				1.2	%
			7.4%
Budgeted impact of medical device tax			2.8%
Adjusted growth			10.2%				4.0	%

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Electronic Voting Instructions

Available 24 hours a day, 7 days a week!

Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy.

Vote by Internet

Vote by Internet

• Go towww.investorvote.com/BDXBDX. • Or scan the QR code with your smartphonesmartphone. • Follow the steps outlined on the secure websitewebsite.

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.Vote by telephone

• Within the USA, US territories and Canada, call toll free 1-800-652-   VOTE (8683) on a touch tone telephone.

• OutsideThere is No CHARGE to you for the USA, US territories & Canada, call 1-781-575-2300   on a touch tone telephone. Standard rates will apply.

call.

• FollowOutside the instructions provided by the recorded message.

USA, US territories and Canada, call 1-781-575-2300 on a   touch tone telephone. Standard rates will apply.

VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.

Using ablack inkpen, mark your votes with anXas shown in this example. Please do not write outside the designated areas.

x

Voting instructions submitted by GSIP participants must be received by 12:00 p.m., EST, on January 23, 2013.22, 2014. Voting instructions submitted by all other BD plan participants planparticipants must be received by 12:00 p.m., EST, on January 25, 2013. All proxies submitted24, 2014. Allproxiessubmitted by record holders through the Internet or telephone must be received by 11:by11:00 a.m., EST, on January 29, 2013.28, 2014.

 

		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

 

 

 

		A		Proposals — The Board of Directors recommends a voteFOR all the nominees listed andlisted;FOR Proposals 2, 3, 4 and 5.5; andAGAINST Proposal 6.

 

1.  Election of Directors:

For

Against

Abstain

For

Against

Abstain

For

Against

Abstain

+

01 - Basil L. Anderson

¨

¨

¨

06 - Claire M. Fraser

¨

¨

¨

11 - James F. OrrWillard J. Overlock, Jr.

¨

¨

¨

02 - Henry P. Becton, Jr.

¨

¨

¨

07 - Christopher Jones

¨

¨

¨

12 - Willard J. Overlock, Jr.Rebecca W. Rimel

¨

¨

¨

03 - Catherine M. Burzik

¨

¨

¨

08 - Marshall O. Larsen

¨

¨

¨

13 - Rebecca W. RimelBertram L. Scott

¨

¨

¨

04 - Edward F. DeGraan

¨

¨

¨

09 - Adel A.F. MahmoudGary A. Mecklenburg

¨

¨

¨

14 - Bertram L. ScottAlfred Sommer

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¨

¨

05 - Vincent A. Forlenza

¨

¨

¨

10 - Gary A. MecklenburgJames F. Orr

¨

¨

¨

15 - Alfred Sommer

¨

¨

¨

 

For

ForAgainst

Against

Abstain

For

Against

Abstain

2.  Ratification of selection of independent      registered public accounting firm.

¨

¨

¨

4.  Amendment to the Company’s RestatedApproval of material terms of goals under BD’s      Certificate of Incorporation.2004 Employee and Director Equity-Based      Compensation Plan.

¨

¨

¨

3.  Advisory vote to approve named executive      officer compensation.

¨

¨

¨

5.  Amendments to the 2004 Employee andApproval of material terms of performance goals      Director Equity-Based Compensationunder BD’s Performance Incentive Plan.

¨

¨

¨

6.  Shareholder proposal regarding independent      Board Chair.

¨

¨

¨

 

		B		Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below

 

Please 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.

01QOTD

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Dear Shareholder/Plan Participant: Becton, Dickinson and Company (BD) encourages you to take advantage of convenient ways by which you can vote or direct the voting of 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. 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 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 28, 2014

Proxy Solicited on Behalf of the Board of Directors for the Annual Meeting on January 29, 2013 The undersigned hereby appoints Vincent A. Forlenza, Christopher R. Reidy, 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 28, 2014 at the Four Seasons Hotel New York, 57 East 57th Street, New York, New York, 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, which are addressed below. Where no choice is made on the reverse side of this form, the proxies will vote FOR all Director nominees; FOR Proposals 2, 3, 4 and 5; and AGAINST Proposal 6. 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. If you have been allocated shares of common stock through the Company’s Savings Incentive Plan (“SIP”), you are considered a named fiduciary. As a named fiduciary, you may use this card to instruct the trustee how to vote those shares. Shares for which no voting instructions have been received by the SIP trustee will be voted in the same proportion as those shares for which timely instructions have been received. 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.)

 

		C		Non-Voting Items

Change of Address— Please print your new address below.		Comments— Please print your comments below.		Meeting Attendance

								Mark the box to the right if you plan to attend the Annual Meeting (for record holders only).		¨

 

¢		IF VOTING BY MAIL, COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD.		+