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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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RULE 14A-6(E)(2))
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[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Becton, Dickinson and Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
[LOGO] BD
Indispensable to
human health
Becton, Dickinson and Company
1 Becton Drive
Franklin Lakes, New Jersey 07417-1880
www.bd.com
December 26, 2000
Dear Fellow Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
Becton, Dickinson and Company to be held at 2:00 P.M. on Tuesday, February 13,
2001, at The Woodcliff Lake Hilton, 200 Tice Boulevard, Woodcliff Lake, New
Jersey. Directions to the meeting site are on the back cover of the
accompanying Proxy Statement. During the last year, BD made important progress
in achieving its strategic objectives, and we look forward to reporting to you
on these and other important matters.
Details of the matters expected to be acted upon at the meeting are listed
in the Notice of Meeting and described in detail in the Proxy Statement.
Your vote is important. We encourage you to vote by completing and mailing
the enclosed proxy/voting instruction card in the return envelope that is
provided, or to vote telephonically or on the internet, so that your shares
will be represented and voted at the meeting even if you cannot attend. If you
do not vote by mail, telephone or internet, you still may attend the Annual
Meeting and vote in person.
Thank you for your continued support of BD.
Sincerely,
/s/ Clateo Castellini /s/ Edward J. Ludwig
Clateo Castellini Edward J. Ludwig
Chairman of the Board President and Chief Executive Officer
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
of
BECTON, DICKINSON AND COMPANY
1 Becton Drive
Franklin Lakes, New Jersey 07417-1880
The Annual Meeting of Shareholders of BECTON, DICKINSON AND COMPANY will be
held at 2:00 P.M. on Tuesday, February 13, 2001, at The Woodcliff Lake Hilton,
200 Tice Boulevard, Woodcliff Lake, New Jersey, to consider and act upon the
following proposals:
1. The election of directors;
2. The approval of the selection of independent auditors;
3. A shareholder proposal relating to cumulative voting; and
4. Such other business as may properly come before the meeting.
Shares represented by properly executed proxies that are hereby solicited by
the Board of Directors of Becton, Dickinson and Company will be voted in
accordance with instructions specified therein. Shares represented by proxies
that are not limited to the contrary will be voted in favor of the election as
directors of the persons nominated in the accompanying Proxy Statement, for
proposal 2 and on other matters as recommended by the Board.
Only shareholders of record at the close of business on December 19, 2000
will be entitled to vote at this meeting.
By order of the Board of Directors,
/s/ Bridget M. Healy
Bridget M. Healy
Vice President, General Counsel and
Secretary
Dated: December 26, 2000
IT IS IMPORTANT THAT THE ENCLOSED PROXY/VOTING INSTRUCTION CARD BE SIGNED,
DATED AND PROMPTLY RETURNED IN THE ENCLOSED ENVELOPE OR THAT YOU REGISTER YOUR
VOTE BY TELEPHONE OR ON THE INTERNET BY FOLLOWING THE INSTRUCTIONS ON YOUR
PROXY/VOTING INSTRUCTION CARD, SO THAT YOUR SHARES WILL BE REPRESENTED,
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
PROXY STATEMENT
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2001 ANNUAL MEETING OF SHAREHOLDERS
To Be Held February 13, 2001
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BECTON, DICKINSON AND COMPANY
1 Becton Drive
Franklin Lakes, New Jersey 07417-1880
----------------
GENERAL INFORMATION
The enclosed proxy/voting instruction card ("proxy") is solicited by the
Board of Directors (the "Board") of Becton, Dickinson and Company, a New
Jersey corporation (the "Company" or "BD"), for use at the Annual Meeting of
Shareholders to be held at 2:00 P.M. on Tuesday, February 13, 2001, at The
Woodcliff Lake Hilton, 200 Tice Boulevard, Woodcliff Lake, New Jersey. A proxy
may be revoked at any time before it is voted by sending written notice of
revocation to the Secretary of the Company, by delivering a duly executed
proxy bearing a later date or by voting in person at the meeting. This proxy
statement and the proxy/voting instruction card are being mailed to
shareholders of the Company on or about December 26, 2000.
At the close of business on December 19, 2000, the record date fixed by the
Board for determining the shareholders entitled to notice of and to vote at
the meeting, there were 255,280,659 shares of the Company's Common Stock (the
"Common Stock") outstanding, each entitled to one vote. In addition, on
December 19, 2000, there were 726,675 shares of the Company's Series B ESOP
Convertible Preferred Stock (the "ESOP Preferred Stock") outstanding, all of
which are held by State Street Bank and Trust Company, as Trustee of the
Company's Savings Incentive Plan ("SIP"). The shares of ESOP Preferred Stock
are entitled to vote on all matters submitted to a vote of the Company's
shareholders and also carry one vote per share. Each employee participating in
SIP is entitled to instruct the Trustee how to vote all shares of Common Stock
and ESOP Preferred Stock allocated to that employee's SIP accounts, as well as
how to vote a proportionate number of such shares held in SIP for which voting
instructions are not received by the Trustee from other SIP participants or
which are not allocated to participants' accounts (the "unvoted and/or
unallocated shares"). Unless otherwise instructed by a SIP participant, the
enclosed proxy will serve as voting instructions to the Trustee with respect
to both the allocated and the unvoted and/or unallocated SIP shares. SIP
shares for which no voting instructions are received from any SIP participants
will be voted by the Trustee in the same proportion as it votes the SIP shares
for which it has received voting instructions.
The shares of Common Stock held by Wachovia Bank of North Carolina, N.A., as
Trustee of the Company's Salary and Bonus Deferral Plan ("SBDP"), and the
Company's 1996 Directors' Deferral Plan ("DDP"), as well as the shares of
Common Stock held by Banque Internationale a Luxembourg ("BIL") in connection
with the Company's Global Share Investment Program ("GSIP"), also are entitled
to vote on all matters submitted to a vote of the Company's shareholders and
carry one vote per share. Each director participating in DDP and each employee
participating in SBDP and, if so provided under the terms of the local country
GSIP plan, in GSIP, is entitled to instruct the Trustee or BIL, as the case
may be, how to vote all shares of Common Stock allocated to that person's DDP,
SBDP or GSIP account, as well as how to vote a proportionate number of shares
held in DDP, SBDP or GSIP, respectively, for which voting instructions are not
received by the Trustee or BIL, as the case may be, from other DDP, SBDP or
GSIP participants. When returned properly dated and signed, the enclosed proxy
card will serve as voting instructions by a DDP participant, a SBDP
participant and a GSIP participant with respect to both the allocated and the
unvoted DDP shares, SBDP shares and GSIP shares, as the case may be.
Proxies representing shares of Common Stock held of record also will
represent shares held under the Direct Stock Purchase Plan for shareholders of
the Company administered by First Chicago Trust Company and, in
addition, shares of Common Stock and ESOP Preferred Stock, if any, allocated
to directors' accounts under DDP or to employees' accounts under SIP, SBDP and
GSIP, if the registrations are the same. Separate mailings will be made for
shares not held under the same registrations.
Shareowners of record and participants in SIP, DDP, SBDP or, if so provided
under the terms of the local country GSIP plan, GSIP, may cast their votes by:
(1) signing, completing and returning the enclosed proxy/voting instruction
card in the enclosed postage-paid addressed envelope;
(2) using the toll-free telephone number listed on the enclosed
proxy/voting instruction card; or
(3) using the internet and voting at the website listed on the enclosed
proxy/voting instruction card.
The telephone and internet voting procedures are designed to authenticate
votes cast by use of a personal identification number. The procedure allows
shareowners to appoint a proxy and the various SIP, DDP, SBDP and GSIP
participants to instruct the plan fiduciaries or BIL, as the case may be, to
vote their shares and to confirm their instructions have been properly
recorded. Specific instructions to be followed are set forth on the enclosed
proxy/voting instruction card.
Directors are elected by a plurality of the votes cast at the meeting.
Abstentions with respect to one or more of the nominees will be treated as
present at the meeting for purposes of determining a quorum, but will not be
counted as votes cast and, accordingly, will have no effect on the outcome of
the vote. Similarly, shares which brokers do not have the authority to vote in
the absence of timely instructions from the beneficial owners ("broker non-
votes"), if any, will not be counted and, accordingly, will have no effect on
the outcome of the vote.
Approval of Proposals 2 and 3 requires the affirmative vote of a majority of
the votes cast on such proposal. Under New Jersey law, in determining whether
the proposal has received the requisite number of affirmative votes,
abstentions and broker non-votes will not be counted as votes cast and,
accordingly, will have no effect on the outcome of the vote.
The Board of Directors is not aware of any matters to be presented at the
meeting other than those set forth in the accompanying notice. If any other
matters properly come before the meeting, the persons named in the proxy will
vote in accordance with their best judgment.
In addition to solicitation by mail, directors, officers and other employees
of the Company may solicit proxies personally, by telephone or by telegram.
Brokers and other nominees will be requested to solicit proxies or
authorizations from beneficial owners and will be reimbursed for their
reasonable expenses in doing so. The Company has retained MacKenzie Partners,
Inc., to assist in soliciting proxies for a fee not to exceed $12,500 plus
expenses. The cost of soliciting proxies will be borne by the Company.
SHARE OWNERSHIP OF
MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
According to Thomson Financial/Carson, a firm that monitors institutional
share ownership, as of September 30, 2000, Capital Research and Management,
333 South Hope Street, Los Angeles, California 90071, was the beneficial owner
of 14,992,000 shares of Common Stock, representing shares as to which it has
shared investment power and constituting 5.7% of the then outstanding Common
Stock. Based on a Schedule 13G filed with the Securities and Exchange
Commission on December 8, 2000, as of November 30, 2000, Wellington Management
Company, 75 State Street, Boston, Massachusetts 02109, was the beneficial
owner of 25,950,732 shares of Common Stock, constituting 10.25% of the then
outstanding Common Stock. Wellington Management Company has shared investment
power with respect to all of these shares and shared voting power with respect
to 13,412,932 of the shares. No changes in these holdings have come to the
Company's attention since then. The Company is not aware of any other
beneficial owner of more than 5% of its Common Stock.
2
The following tables set forth, as of October 31, 2000, information
concerning the beneficial ownership of Common Stock and ESOP Preferred Stock
by each director and nominee for director, by each executive officer named in
the Summary Compensation Table, by all directors and executive officers as a
group, and by the beneficial owner of more than 5% of the outstanding ESOP
Preferred Stock. Clateo Castellini owns approximately 1% of the outstanding
Common Stock, including shares which may be acquired by him within 60 days.
None of the other individuals listed below beneficially owns more than 1% of
the outstanding Common Stock. All directors and executive officers as a group
are the beneficial owners of approximately 2.3% of the outstanding Common
Stock, including shares which may be acquired by them within 60 days.
COMMON STOCK
Shares which
Shares owned may be acquired
directly and within 60
Name indirectly(1) days(2)
- ---- ------------- ---------------
Harry N. Beaty................................... 28,911 0
Henry P. Becton, Jr.............................. 220,125(3) 0
Clateo Castellini................................ 196,177 2,693,350
Gary M. Cohen.................................... 30,525 229,288
John R. Considine................................ 11,893 0
Albert J. Costello............................... 12,165 0
Gerald M. Edelman................................ 10,897 0
Vincent A. Forlenza.............................. 37,444 364,718
Edward J. Ludwig................................. 38,246 654,916
Deborah J. Neff.................................. 6,308 350,648
Frank A. Olson................................... 70,154 0
James F. Orr..................................... 0(4) 0
Willard J. Overlock, Jr.......................... 4,001 0
James E. Perrella................................ 25,286 0
Alfred Sommer.................................... 4,381 0
Margaretha af Ugglas............................. 10,537 0
All Directors and Executive Officers as a group
(24 persons),
including those named above..................... 816,695 5,038,802
- --------
(1) Includes Common Stock allocated to individual accounts under the Savings
Incentive Plan ("SIP") and the Global Share Investment Program ("GSIP"),
where applicable, as follows: Mr. Ludwig, 16,174 shares, Mr. Cohen, 9,058
shares, Mr. Considine, 105 shares, Mr. Forlenza, 4,582 shares, Ms. Neff,
2,804 shares, and all Directors and Executive Officers as a group, 61,951
shares. Also includes Common Stock allocated to individual accounts under
the Salary and Bonus Deferral Plan as follows: Mr. Cohen, 2,207 shares,
Mr. Considine, 1,788 shares, Ms. Neff, 1,389 shares, and all Executive
Officers as a group, 9,801 shares, and Common Stock allocated to
individual accounts under the 1996 Directors' Deferral Plan as follows:
Dr. Beaty, 20,911 shares, Mr. Becton, 17,228 shares, Mr. Castellini, 6,075
shares, Mr. Costello, 8,165 shares, Dr. Edelman, 3,893 shares, Mr. Olson,
50,154 shares, Mr. Overlock, 3,001 shares, Mr. Perrella, 12,686 shares,
Dr. Sommer, 4,381 shares, Mrs. af Ugglas, 4,537 shares, and all Directors
as a group, 131,031 shares.
(2) Consists of stock options available for exercise.
(3) Includes 145,685 shares held by trusts of which Mr. Becton is a co-trustee
with shared investment and voting power, and 52,000 shares held by a
corporation owned by one of such trusts. Does not include 32,240 shares
owned by Mr. Becton's spouse, 1,600 shares owned by a daughter, 101,390
shares held in trusts for the benefit of his children or 88,200 shares
held in a charitable trust of which he is one of eight trustees, and as to
each of which he disclaims beneficial ownership.
(4) Mr. Orr was elected to the Board of Directors on November 28, 2000.
3
ESOP PREFERRED STOCK
Shares
owned directly
and indirectly
--------------
Edward J. Ludwig............................................... 451(1)
Gary M. Cohen.................................................. 366(1)
John R. Considine.............................................. 16(1)
Vincent A. Forlenza............................................ 413(1)
Deborah J. Neff................................................ 238(1)
All Directors and Executive Officers as a group (24 persons)... 2,980(1)
State Street Bank and Trust Company............................ 735,641(2)
225 Franklin Street
Boston, Massachusetts 02110
(as Trustee of the Savings Incentive Plan)
- --------
(1) Shares allocated to individual accounts under the ESOP component of the
SIP. Such shares constitute less than 1% of the total beneficial ownership
of the ESOP Preferred Stock.
(2) As trustee, holding 100% of the outstanding shares of ESOP Preferred Stock.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors to file initial reports of their ownership of
the Company's equity securities and reports of changes in such ownership with
the Securities and Exchange Commission (the "SEC") and the New York Stock
Exchange. Executive officers and directors are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on a review of copies of such forms and written representations from
the Company's executive officers and directors, the Company believes that for
the period from October 1, 1999 through September 30, 2000, all of its
executive officers and directors were in compliance with the disclosure
requirements of Section 16(a).
BOARD OF DIRECTORS
Meetings; Certain Committees
The Company is governed by a Board of Directors and various committees of
the Board which meet regularly throughout the year. The Board of Directors,
which held eight meetings during the fiscal year ended September 30, 2000, has
six principal standing committees, including the Audit Committee, the
Corporate Affairs Committee (formerly the Corporate Responsibility Committee),
the Compensation and Benefits Committee and the Corporate Governance
Committee, which serves as a nominating committee. Each director attended more
than 96% percent of the aggregate of the total number of meetings of the Board
and the committees on which such director served.
The Corporate Affairs Committee oversees the Company's policies, practices
and procedures, as a responsible corporate citizen, in the general areas of
ethical conduct and legal compliance, including, without limitation, issues
relating to communications, employment practices, community relations,
customer relations and business practices and ethics. The members of this
Committee, which met once during the year, are Margaretha af Ugglas, Chairman,
Harry N. Beaty, Henry P. Becton, Jr., and Gerald M. Edelman. James F. Orr also
joined this Committee upon his election to the Board on November 28, 2000.
4
The Compensation and Benefits Committee reviews annually the overall
compensation program for the Company's corporate officers, approves the
compensation of the executive officers and approves all employment and
consulting contracts of the Company or any subsidiary with corporate officers
who are not also directors. In addition, this Committee serves as the granting
and administrative committee for the Company's stock option plans and its
Stock Award Plan. This Committee also oversees the administration of employee
benefits and benefit plans for the Company. The members of this Committee,
which met six times during the year, are Henry P. Becton, Jr., Chairman, Frank
A. Olson, Willard J. Overlock, Jr., and James E. Perrella.
The Corporate Governance Committee recommends candidates for election as
directors to the Board. It also reviews and makes recommendations concerning
the composition, organization, structure and function of the Board and its
committees, as well as the performance and compensation of directors. It
monitors and considers the Company's corporate governance and board practices,
recommends matters for consideration by the Board, and periodically reviews
the Company's by-laws, certificate of incorporation and shareholder rights
plan. The Committee's charter states that any director who is, or at anytime
in the prior two years was, an officer or employee of the Company or of any of
its subsidiaries, however, must recuse him - or herself from all
determinations regarding the nomination of candidates for election to the
Board and the compensation of directors. The members of this Committee, which
met five times during the year, are Clateo Castellini, Chairman, Henry P.
Becton, Jr., James E. Perrella, and Alfred Sommer.
Any shareholder may recommend nominees for director for consideration by the
Corporate Governance Committee by writing to the Secretary of the Company.
Submissions should include the full name and address and a statement of the
qualifications of the proposed nominee.
The Audit Committee reviews the Company's financial statements and
accounting principles, the scope and results of the annual audit of the
independent auditors, and the Company's internal audit process, including the
Company's internal controls and accounting systems. The Audit Committee also
reviews the independence and performance of the Company's independent
auditors, and makes recommendations to the Board concerning the selection of
independent auditors. The members of this Committee, which met five times
during the year, are Harry N. Beaty, Chairman, Albert J. Costello, Alfred
Sommer, and Margaretha af Ugglas. James F. Orr also joined this Committee upon
his election to the Board on November 28, 2000. Each of the members of the
Audit Committee satisfy the independence, financial literacy and expertise
requirements of the New York Stock Exchange. The Board of Directors has
adopted a written charter for the Audit Committee, a copy of which is appended
to this proxy statement.
5
REPORT OF THE AUDIT COMMITTEE
November 27, 2000
The Audit Committee reviews the Company's financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility
for the financial statements and the reporting process, including the system
of internal controls. The independent auditors are responsible for performing
an independent audit of the Company's consolidated financial statements in
accordance with generally accepted accounting principles and to issue a report
thereon. The Committee monitors these processes.
In this context, the Committee met and held discussions with management and
the independent auditors. Management represented to the Committee that the
Company's consolidated financial statements were prepared in accordance with
accounting principles generally accepted in the United States, and the
Committee reviewed and discussed the consolidated financial statements with
management and the independent auditors. The Committee also discussed with the
independent auditors the matters required to be discussed by Statement on
Auditing Standards No. 61 (Codification of Statements on Auditing Standards,
AU 380), as amended.
In addition, the Committee discussed with the independent auditors the
auditors' independence from the Company and its management, and the
independent auditors provided to the Committee the written disclosures and
letter required by the Independence Standards Board Standard No. 1
(Independence Discussions With Audit Committees).
The Committee discussed with the Company'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, the evaluations of the
Company's internal controls, and the overall quality of the Company's
financial reporting.
Based on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors, and the Board has approved, that the
audited financial statements be included in the Company's Annual Report on
Form 10-K for the year ended September 30, 2000, for filing with the
Securities and Exchange Commission. The Committee and the Board also have
recommended, subject to shareholder approval, the selection of the Company's
independent auditors for fiscal year 2001.
AUDIT COMMITTEE
Harry N. Beaty, Chairman
Albert J. Costello
Alfred Sommer
Margaretha af Ugglas
6
Directors' Compensation
Each director who is not employed by the Company is compensated for services
as a director by an annual retainer of $34,000. In addition, an annual fee of
$5,000 is paid to each committee chair. Directors may defer, in an unfunded
cash account or in shares of Common Stock, all or part of their annual
retainers and chair fees, until up to ten years after retirement from the
Board pursuant to the provisions of the 1994 Restricted Stock Plan for Non-
Employee Directors and the 1996 Directors' Deferral Plan. The Company
reimburses all directors for travel and other necessary business expenses
incurred in the performance of their services for the Company.
Each non-employee director elected at, or continuing as a director after,
each annual meeting of shareholders is granted stock options to purchase
shares of Company Common Stock at the fair market value of the Common Stock on
the date of grant. The options granted have a value of $35,000 (based on the
Black-Scholes option pricing model). In addition, each such non-employee
director is granted 400 deferred shares of Common Stock. These shares are
allocated to a Common Stock account under the 1996 Directors' Deferral Plan
and distributed no earlier than retirement, in installments or as a lump-sum.
Prior to the distribution of shares of Common Stock credited to the accounts
of directors under the 1996 Directors' Deferral Plan, the number of shares
credited will be increased to reflect the payment and reinvestment of
dividends on the Common Stock.
In 2000, the Board revised its formal stock ownership guidelines for non-
employee directors. Under the new guidelines, each non-employee director, with
limited exceptions, is required to own shares of Common Stock valued at 70% of
the amount obtained by multiplying the annual retainer fee by the number of
years such person has served as a director. Based upon the closing price of
the Company's Common Stock on December 1, 2000, all but one of the Company's
non-employee directors own sufficient shares to comply with these guidelines.
Board Evaluation
Like the year before, in fiscal 2000 the Board's Corporate Governance
Committee undertook the process of evaluating Board performance and
effectiveness, whereby each director completed a Board Evaluation
Questionnaire. The questionnaire was developed by the Corporate Governance
Committee and provided a range of grades and trend indicators to be completed
by each director, as well as space for written comments, with respect to each
of the following seventeen criteria:
1. The Board understands and approves the Company's mission statement,
values and objectives, as well as its strategic and operating plans.
2. The Board understands the industries in which the Company operates and
the implications of current general economic and political trends to
those businesses.
3. The Board evaluates the Company's research and development performance
and level of commitment.
4. The Board considers the financial performance of peer companies when
assessing Company performance.
5. The Board evaluates and reviews the performance and values of the chief
executive officer.
6. The Board reviews senior management development and compensation and
considers the correlation between compensation levels and Company
performance.
7. Board meetings foster open communication and timely resolution of
issues presented.
8. The Corporate Governance Committee reviews and communicates the Board's
expectations concerning director responsibilities and monitors the
productivity of Board and Committee meetings.
9. The Board assesses and modifies, as necessary, the structure of the
Board and its Committees, as well as the frequency of the Board and
Committee meetings.
10. The Board establishes criteria and policies to ensure the
representation of characteristics and expertise among its membership
necessary to its effectiveness.
7
11. The Board seeks to optimally and appropriately utilize each Board
member's experiences in terms of Committee appointments.
12. The Board reviews the availability, content and timeliness of
information provided to it, prepares appropriately for Board meetings
and requests additions or changes to the material provided, when
appropriate.
13. The Board verifies the independence of each non-employee director and
considers the impact, if any, of changes in the principal employment of
non-employee directors.
14. The Board monitors and understands current issues and trends in
corporate governance.
15. The Board reviews and adopts annual capital and operating budgets and
monitors Company performance against them during the year.
16. The Board reviews the adequacy of existing accounting and financial
controls and oversees ethical conduct and legal compliance by the
Company.
17. The Board reviews succession plans for the chief executive officer and
senior management.
The collective ratings and comments of the directors were compiled and
presented by the Chairman of the Corporate Governance Committee to the full
Board for discussion, for the assessment of progress in the areas targeted for
improvement a year earlier, and for the development of recommendations to
enhance the Board's effectiveness.
The Board also assessed the performance of the individual directors standing
for re-election to the Board at the next annual meeting of shareholders, and,
if applicable, considered the impact of any change in the principal
occupations of these directors during their prior terms of service.
The Corporate Governance Committee conducted the individual evaluations
against criteria designed to measure performance in five critical areas:
1. Personal Characteristics
2. Core Competencies
3. Independence
4. Level of Commitment
5. Board and Company Considerations
Upon completion of the individual director evaluation process, the Corporate
Governance Committee reported to the full Board its conclusions and
recommendations for nominations to the Board.
8
Proposal 1.
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, the terms of which
expire alternately over a three-year period. Four directors are proposed for
election. Three of these directors are standing for terms to expire in 2004.
In the case of Dr. Gerald M. Edelman, however, the Board proposes his election
for one year only until the 2002 annual meeting and until his successor has
been elected and qualified, so as to comply with the Company's policy
establishing the mandatory retirement date of each director as the date of the
annual meeting of shareholders next following his or her 72nd birthday. Dr.
Edelman will be 72 in July, 2001. The Board also proposes the election of
Henry P. Becton, Jr., James F. Orr and Margaretha af Ugglas to serve for three
years until the 2004 annual meeting and in each case until their successors
have been elected and qualified. Mr. Orr was elected to his present term by
the Board effective November 28, 2000. Mr. Becton and Mrs. af Ugglas are
incumbent directors who were elected to their present terms by the
shareholders.
Nominee for Director--Term to Expire 2002
Gerald M. Edelman, M.D., Ph.D., 71, has been a director since
1982. He is a Professor of The Scripps Research Institute and
Chairman of its Department of Neurobiology. In addition, he is
[PHOTO] the Director of The Neurosciences Institute. His research is
concerned with the developmental biology of the brain. In
1972, Dr. Edelman was the recipient of the Nobel Prize in
Physiology or Medicine. Dr. Edelman also is a director of
General American Investors Co., Inc.
Nominees for Director--Terms to Expire 2004
Henry P. Becton, Jr., 57, has been a director since 1987. He
is President and General Manager of WGBH Educational
[PHOTO] Foundation, a producer and broadcaster of public television
and radio programs and books and other educational materials.
Mr. Becton is a director of various Scudder mutual funds, A.H.
Belo Company and The Public Broadcasting Service (PBS).
James F. Orr, 54, has been a director since November, 2000.
Mr. Orr is the Chairman, President and Chief Executive Officer
of Convergys Corporation, a provider of outsourced billing and
customer management services. Prior thereto, he served as
[PHOTO] Chief Operating Officer and a director of Cincinnati Bell,
Inc. At Cincinnati Bell, he was Chairman and President of
Cincinnati Bell Information Systems and MATRIXX Marketing, the
business that today makes up Convergys. In addition, he is a
director of Ohio National Financial Services, Inc.
9
Margaretha af Ugglas, 61, has been a director since 1997. She
[PHOTO] is the former Minister of Foreign Affairs of Sweden. She is a
director of the University of Stockholm and of the Jarl
Hjalmarson Foundation.
CONTINUING DIRECTORS
The directors listed below were elected by the shareholders to terms
expiring in 2002 and 2003, respectively, and will continue to serve.
Terms to Expire 2002
Albert J. Costello, 65, has been a director since 1996. In
1999, he retired as Chairman of the Board, President and Chief
Executive Officer of W.R. Grace & Co., a global supplier of
packaging and speciality chemicals. Prior to joining W.R.
[PHOTO] Grace & Co., Mr. Costello was Chairman of the Board and Chief
Executive Officer and President of American Cyanamid Company,
a technology-based life sciences company in agriculture,
pharmaceuticals and medical devices. Mr. Costello also is a
director of FMC Corporation.
James E. Perrella, 65, has been a director since 1995. In
2000, he retired as Chairman of the Board of Ingersoll-Rand
[PHOTO] Company, a manufacturer of industrial machinery and related
products. He is also a director of Milacron Inc., Bombardier,
Arvin Meritor, Inc., a major diversified industrial equipment
and components manufacturer, and Rio Algom Limited.
Alfred Sommer, 58, has been a director since May 1998. He is
Dean of The Johns Hopkins School of Hygiene and Public Health,
and Professor of Ophthalmology, Epidemiology and International
[PHOTO] Health. Dr. Sommer was founding Director of the Dana Center
for Preventive Ophthalmology at Johns Hopkins, which focuses
on clinical epidemiology and public health aspects of
blindness prevention and child health.
10
Terms to Expire 2003
Harry N. Beaty, M.D., 68, has been a director since 1985. He
is Emeritus Dean of the Northwestern University Medical School
[PHOTO] and serves on the Board of the Northwestern Medical Faculty
Foundation. Dr. Beaty is a specialist in internal medicine and
a subspecialist in infectious diseases. He also is a director
of Banner Health, Arizona.
Clateo Castellini, 65, has been a director and Chairman of the
Board of the Company since 1994. Mr. Castellini also served as
[PHOTO] President and Chief Executive Officer of the Company from 1994
to May 1999, and as Chief Executive Officer from May 1999 to
January 2000.
Edward J. Ludwig, 49, has been a director since 1999. Mr.
Ludwig was appointed President of the Company in May 1999, and
was appointed President and Chief Executive Officer in January
[PHOTO] 2000. He served as Executive Vice President from July 1998 to
May 1999 and prior thereto was Senior Vice President-Finance
and Chief Financial Officer. He is a director of the U.S. Fund
for UNICEF and also is a trustee of Health Net, Inc., a
subsidiary of The Valley Hospital, Ridgewood, New Jersey.
Frank A. Olson, 68, has been a director since 1985. He is
[PHOTO] Chairman of the Board of The Hertz Corporation, a
transportation company. Mr. Olson also is a director of
Amerada Hess and White Mountains Insurance Group.
Willard J. Overlock, Jr., 54, has been a director since 1999.
He retired in 1996 as a partner in Goldman, Sachs & Co., where
[PHOTO] he served as a member of its management committee, and
currently serves as a senior advisor. Mr. Overlock also is an
advisor to the Parthenon Group and is a director of Select
Reinsurance Ltd.
11
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION AND BENEFITS COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation and Benefits Committee of the Board (the "Committee")
reviews the overall compensation program for the Company's corporate officers,
determines and administers the compensation of the executive officers of the
Company, including the individuals named in the Summary Compensation Table,
and oversees the administration of employee benefits and benefit plans for the
Company and its subsidiaries. The Committee is composed exclusively of non-
employee directors, as defined in applicable rules and regulations of the
Securities and Exchange Commission, and none of the members of the Committee
is an employee or former employee of the Company or eligible to participate in
any of the Company's executive compensation programs. Each of the members of
this Committee also satisfies the criteria necessary for purposes of Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code").
Overview
BD's focus is to help all people live healthy lives while generating
superior total shareholder return. With this focus in mind, the Committee has
developed and implemented a compensation philosophy designed to reward and
support superior performance and retain top talent.
Performance-Based Pay
Management short-term and long-term incentive payments are based on
performance measures designed to build shareholder value: revenue growth,
earnings growth and the creation of economic value.
Challenging Targets
BD's management compensation program emphasizes the establishment of
challenging goals through a number of factors, including: the Committee's
active assessment of management's proposed performance goals and the link
between goal attainment and short-term and long-term management incentives; a
significant proportion of total compensation being contingent on achievement
of predetermined goals; highly-leveraged compensation plans; and long-term
compensation and performance measured and determined relative to that of a
group of high quality healthcare institutions with which BD competes for
management talent, as well as the selected peer group of companies used in
preparing the Performance Graph set forth on page 21 hereof (collectively, the
"Comparison Group").
Executive and Shareholder Alignment
Each of the executives identified below is required, with limited
exceptions, to own within a prescribed period of time a significant ownership
stake in the Company, representing varying multiples of the executive's base
salary, depending on the executive's position. The Company can extend the
period of time within which the guidelines are to be satisfied when
circumstances, such as a promotion, significantly increase the level of share
ownership required. The current ownership guideline requirements are as
follows:
President and Chief Executive Officer ..................... 5 times salary
Leadership Team (16 persons)............................... 3 times salary
All Other Corporate Officers and Business Presidents....... 2 times salary
The Company periodically monitors individuals' satisfaction of these
ownership guidelines. Stock options, including vested options, are not
included in determining whether an individual has met his or her ownership
guidelines. The Company does not, and has not, provided any loans to
management for the purpose of assisting them in satisfying these ownership
guidelines.
12
Principal Compensation Elements
The key elements of executive compensation are base salary, annual incentive
awards, and long-term equity participation. These components are administered
with the goal of providing total compensation that is competitive, motivates
the highest individual performance, rewards sustained performance, and
provides above-average rewards when merited by individual, business unit and
Company results.
In assessing the effectiveness and competitiveness of BD's executive
compensation structure, the Committee reviews compensation practices of other
highly-regarded companies with the assistance of independent outside
consultants. Comparison companies are selected based on their total
shareholder return or the similarity of their lines of business to those of
BD. The Comparison Group includes not only firms that compete in the Company's
primary lines of business, but also those with which the Company competes for
talent.
Base Salary
The Committee annually reviews and determines the base salaries of executive
officers. The Committee evaluates management's salary recommendations based on
the results achieved by each executive officer, his or her future potential,
scope of responsibilities and experience, as well as competitive salary
practices. The Company generally targets executive officer salaries to
approximate the median levels expected to be paid by companies in the
Comparison Group to persons holding equivalent positions.
Annual Incentive Awards
The Company's 1997 Management Incentive Plan is designed to reward
executives based on the overall performance of the Company, as well as the
performance of each executive officer and that of his or her area of
responsibility or operating group. The Committee set target incentives for
each participating executive at the beginning of the year. These dollar
amounts were established as a percentage of the executive's salary and were
calculated to deliver compensation to the executive at the median range for
the Comparison Group companies.
The Committee adopted performance measures to determine the amount of
incentive to be paid at different levels of performance. The performance
measures address both financial and strategic goals. For fiscal 2000, the
financial measures used to determine the amounts of the incentive awards
included earnings per share growth, adjusted by the Committee for certain one-
time items, improvement in economic value added (EVA(R)), and revenue growth.
All factors were weighted equally. The strategic accomplishments measured
included, but were not limited to, enhancing competitive advantage within
existing markets served; maximizing revenue growth through acquisitions,
geographic expansion and new product development; preserving profitability
through operations excellence and improvements in productivity, quality, and
customer service; and enhancing organizational effectiveness.
The Company relies heavily, but not exclusively, on these criteria. It
exercises discretion in light of these measures and in view of the Company's
compensation objectives to determine overall incentive funds and individual
incentive amounts.
Stock Options
The Committee grants stock options broadly and deeply throughout the
organization, and thus provides additional incentives to employees to maximize
shareholder value. Grants are based on individual performance and
contribution.
Stock option grant levels and terms are established to provide senior
management with the opportunity for compensation levels at the median of the
competitive range for comparable positions in the market place when management
is successful in achieving above-average long-term growth in total shareholder
value. Stock options are awarded each year by the Committee to members of
senior management in accordance with the Company's Senior Executive Option
Policy which was adopted by the Committee in September 1997.
- --------
EVA(R) is a registered trademark of Stern Stewart and Co.
13
The Senior Executive Option Policy is an indexed stock option program,
intended to compensate executive officers for both absolute and relative
growth in shareholder value, as well as the achievement of certain internal
financial and strategic goals. The program is intended to focus management on
the long-term creation of shareholder value by linking incentive compensation
to quantifiable measures that drive shareholder value creation over time.
Beginning with fiscal year 1998, the Company's total shareholder return
("TSR") has been measured against that of the selected peer group of companies
listed on page 20 (the "Peer Group"). Internal measures of performance include
the achievement of certain earnings and strategic goals, including improved
EVA(R) and revenue growth. The number of stock options targeted for grant
under the Senior Executive Option Policy is determined based (1) three-fourths
on the Company's annualized, cumulative TSR over a three-year period
commencing October 1, 1997 relative to that of the Peer Group over the same
three-year period, and (2) one-fourth on the Company's EVA(R) and revenue
growth over such three-year period. As applied, "relative" performance under
the indexed stock option program results in an option exercisable at the fair
market value on the date of grant for either a reduced or an increased number
of shares depending upon actual performance compared to the Peer Group TSR and
the established internal financial and strategic goals.
Stock option grant levels and terms are established to provide senior
management with the opportunity for overall compensation levels targeted at
the median of the range of total compensation of the Comparison Group, with
the opportunity and risk, through indexing, to earn long-term compensation at
levels of between zero and 150% of target.
On January 24, 2000, the Committee awarded the third grant under the Senior
Executive Option Policy to 15 members of the Leadership Team, including
executive officers, based on performance results as of September 30, 1999.
With respect to the January, 2000 option grant, BD's performance as a
percentage of Peer Group TSR, which accounted for 75% of the total grant, was
78%, resulting in a grant of 78% of target. The Company's cumulative revenue
growth during the three-year performance period was 18% and EVA(R) growth was
72%, which resulted in 150% of target for each measure. Both revenue growth
and EVA(R) were weighted at 12.5%. Based on the respective weightings and
yields of each of the applicable measures, the resulting total senior
executive stock option grant level was at 96% of target.
On November 27, 2000, the Committee awarded the fourth and last grant under
the Senior Executive Option Policy to 13 members of the Leadership Team, all
of whom were executive officers, based on performance results as of September
30, 2000. With respect to the November, 2000 option grant, BD's performance as
a percentage of Peer Group TSR, which accounted for 75% of the total grant,
was 65.2%, resulting in a grant of 48.9% of target. The Company's cumulative
revenue growth during the three-year performance period was 22.4% and EVA(R)
growth was 51.5%, which resulted in 150% of target for each measure. Both
revenue growth and EVA(R) were weighted at 12.5%. Based on the respective
weightings and yields of each of the applicable measures, the resulting total
senior executive stock option grant level was at 86.4% of target.
Compensation of the President and Chief Executive Officer
The determination of the President and Chief Executive Officer's salary,
annual incentive and stock option grants was made by the Committee based on
the same policies and calculations applicable to all executive officers.
On January 1, 2000, Mr. Ludwig assumed the additional role of Chief
Executive Officer of the Company, at which time his salary was increased to
$600,000. On January 24, 2000, Mr. Ludwig received an award of 10,000 stock
options in accordance with the Senior Executive Option Policy, which was in
addition to an award of 100,000 stock options granted to him in November, 1999
in recognition of his election to the position of Chief Executive Officer,
effective January 1, 2000.
The Committee believes that the structure of the Company's compensation
program, with its emphasis on long-term compensation, serves to focus Company
executives on attaining a sustained, high level of Company performance and
creating long-term shareholder value.
14
2000 Compensation Actions: Other Executive Officers
The other executive officers, including the named executives (as defined
below), received salary increases that averaged 6.1%, which included merit
increases of 3.1%, as well as a number of promotion and market adjustments.
The executive officers were granted stock options under the Senior Executive
Option Policy during 2000.
Internal Revenue Code Section 162(m)
Section 162(m) of the Code precludes a public corporation from taking a
deduction for compensation in excess of $1 million for its chief executive
officer or any of its four other highest paid executive officers, unless
certain specific and detailed criteria are satisfied.
The Committee considers the anticipated tax treatment to the Company and to
the executive officers in its review and establishment of compensation
programs and payments. The deductibility of some types of compensation
payments can depend upon the timing of an executive's vesting or exercise of
previously granted rights. Interpretations of and changes in applicable tax
laws and regulations as well as other factors beyond the control of the
Committee also can affect deductibility of compensation. For these and other
reasons, the Committee has determined that it will not necessarily seek to
limit executive compensation to that deductible under Section 162(m) of the
Code. The Committee will continue to monitor developments and assess
alternatives for preserving the deductibility of compensation payments and
benefits to the extent reasonably practicable, consistent with its
compensation policies and as determined to be in the best interests of the
Company and its shareholders.
Compensation Data
The tables and graph following this report set forth information on the
compensation for these persons who served as the Company's chief executive
officer during fiscal 2000 and the four most highly compensated officers other
than the chief executive officer (the "named executives").
COMPENSATION AND BENEFITS COMMITTEE
Henry P. Becton, Jr., Chairman
Frank A. Olson
Willard J. Overlock, Jr.
James E. Perrella
15
Compensation of Named Executives
General
The following table shows, for the fiscal years ended September 30, 2000,
1999, and 1998, respectively, compensation provided by the Company to each of
the named executives in all capacities in which they served.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term
Awards Compensation
------------------------- ---------------------
Securities
Restricted Underlying
Name and Fiscal Stock Options/ All Other
Principal Position Year Salary(A) Bonus(A) Awards(B) SARs Compensation(C)
- ------------------ ------ --------- -------- ---------- ---------- ---------------
Clateo Castellini....... 2000 $243,750 $145,000 0 102,934 $177,061
Chairman of the Board 1999 921,875 0 0 195,000 108,841
(D) 1998 846,875 900,000 0 270,000 106,861
Edward J. Ludwig........ 2000 562,500 425,000 0 110,000 5,321
President and Chief 1999 407,500 0 0 51,000 6,780
Executive Officer 1998 331,667 220,000 0 50,000 4,800
Gary M. Cohen........... 2000 400,542 195,000 0 37,000 5,629
President--Worldwide 1999 387,083 0 0 51,000 7,677
Medical Systems 1998 266,667 220,000 0 50,000 5,082
John R. Considine....... 2000 155,449 350,000 0 300,000 2,813
Executive Vice President
and
Chief Financial Officer
(E)
Vincent A. Forlenza.....
Senior Vice President-- 2000 335,000 150,000 0 27,000 5,777
Technology, Strategy and 1999 303,333 0 0 36,000 7,812
Development 1998 208,625 120,000 0 50,000 4,896
Deborah J. Neff......... 2000 323,462 150,000 0 30,000 5,336
President--Worldwide 1999 279,500 0 0 30,000 7,182
Biosciences 1998 220,000 75,000 0 50,000 4,997
- --------
(A) Amounts shown reflect salary and bonuses earned by the named executives
for the applicable fiscal year. Bonuses are paid in the fiscal year
following the fiscal year for which they are earned, unless deferred at
the election of the executive.
(B) The following table contains information relating to the outstanding
holdings of restricted stock of the named executives, which all relate to
undistributed portions of awards previously granted under the Stock Award
Plan.
Current Market
Number of Value of
Undistributed Undistributed
Restricted Restricted
Name Shares Held Shares Held
---- ------------- --------------
Clateo Castellini............................... 39,912 $1,055,273
Edward J. Ludwig................................ 9,840 260,170
Vincent A. Forlenza............................. 4,904 129,662
Under the terms of the Stock Award Plan, none of the holdings reflected may
be distributed prior to retirement or termination of employment.
Current market values are determined by multiplying the number of
undistributed shares by $26.44, the September 29, 2000 closing price for the
Company's Common Stock. No discount has been taken to reflect (1) the
continuing restrictions on distribution and transferability, or (2) the fact
that undistributed shares are not dividend-bearing.
(C) Amounts shown represent the Company's matching contributions to the
Company's Savings Incentive Plan ("SIP"), a qualified defined contribution
plan available to U.S. employees at all levels, and the dollar value of
split-dollar life insurance policies provided for certain of the named
executives. The amount shown with respect to Mr. Castellini also includes
a payment of $75,000 for unused vacation time.
16
During fiscal 2000, the Company made contributions to SIP of $5,100 for each
of Messrs. Ludwig and Forlenza and Ms. Neff, $4,982 for Mr. Cohen, and
$2,813 for Mr. Considine. These amounts represent Company matching
contributions at a 50% rate of the first 6% of base pay contributed to SIP
by each of the named executives, in accordance with applicable SIP rules and
subject to limits imposed by the IRS upon maximum contributions to such tax-
qualified plans. In addition, for the plan year ended June 30, 2000, as a
result of the accumulation of shares of ESOP Preferred Stock in the SIP
trust in excess of the Company's matching obligation, the Company matched up
to an additional .1% of each eligible participant's salary. This additional
Company contribution amounted to $221 for Mr. Ludwig, $216 for Mr. Cohen,
$223 for Mr. Forlenza, and $236 for Ms. Neff.
The Company has made collateral assignment or endorsement method split-
dollar life insurance policies available to the named executives in lieu of
full participation in the Company's group life insurance program. The death
benefit payable to the beneficiary of an insured named executive is two
times that executive's base salary. Under collateral assignment
arrangements, the premiums are paid by the Company for a fixed time period
during the initial years in which the policies are in effect. If assumptions
about mortality, dividends, and other factors are realized, the Company will
recover all of its premium payments from the cash value of the policies at
the later of a designated date or retirement of the executive. At that time,
full ownership of the policy will be transferred to the named executive.
Messrs. Castellini and Ludwig have collateral assignment split-dollar life
insurance arrangements. The compensatory portion of these arrangements are
the premium payments made on behalf of the named executives during the
fiscal year. For fiscal 2000, payments of $102,061 were made on behalf of
Mr. Castellini. No premium payments were made on behalf of Mr. Ludwig during
the fiscal year. Under endorsement split-dollar arrangements, the Company
owns the policy and grants the executive the right to name a beneficiary for
a part of the death proceeds equal to two times the executive's base salary.
The compensatory portion of the arrangement reflects the term life coverage
for the fiscal year. Messrs. Cohen and Forlenza have endorsement split-
dollar life insurance arrangements. The reportable amount for fiscal year
2000 is $431 for Mr. Cohen, and $454 for Mr. Forlenza.
(D) Mr. Castellini retired as Chief Executive Officer of the Company on
January 1, 2000.
(E) Mr. Considine joined the Company in fiscal year 2000. Accordingly, no
information is provided for Mr. Considine for fiscal years 1999 and 1998.
Stock Option Grants
The following table contains information relating to stock option and tandem
stock appreciation right ("SAR") grants made in fiscal 2000 under the 1998
Stock Option Plan through the Senior Executive Option Policy described above.
OPTION/SAR GRANTS IN FISCAL YEAR 2000
Individual Grants
---------------------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Grant Date
Options/SARs Employees in Exercise Expiration Present
Name Granted(A) Fiscal Year Price Date Value(B)
- ---- ------------ ------------ -------- ---------- -----------
Clateo Castellini....... 100,000 2.71% $28.9688 11/22/09 $ 1,158,000
2,934(C) 0.08% 25.6250 2/8/10 35,000
Edward J. Ludwig........ 100,000 2.71% 28.9688 11/22/09 1,158,000
10,000 0.27% 27.9063 1/24/10 115,500
Gary M. Cohen........... 37,000 1.00% 27.9063 1/24/10 427,350
John R. Considine....... 300,000 8.12% 27.7813 6/12/10 3,489,000
Vincent A. Forlenza..... 27,000 0.73% 27.9063 1/24/10 311,850
Deborah J. Neff......... 30,000 0.81% 27.9063 1/24/10 346,500
--------- ------- -------- -------- -----------
TOTAL 606,934 16.43% Various Various $ 7,041,200
All Employee Optionees.. 3,693,849 100.00% Various Various $42,692,068
- --------
(A) All option grants to the named executives are for a ten-year term. Except
as described below, they are exercisable 50% after two years from date of
grant and 100% after three years from date of grant. One-half of the
employee stock options granted to Mr. Castellini in fiscal year 2000 are
exercisable only once the Company's Common Stock has traded at or above
$44.00 for 30 consecutive trading days, and the balance of the employee
stock options granted to Mr. Castellini are exercisable only once the
Common Stock has traded at or above $50.00 for 30 consecutive trading
days. The option grants to the named executive officers, other than the
February, 2000 option grant to Mr. Castellini, were issued in tandem with
limited SARs, which are exercisable only in the event of a tender offer
for the Company's Common Stock or a change in control of the Company, as
defined in the 1998 Stock Option Plan.
17
(B) This estimate of value has been developed solely for purposes of
comparative disclosure in accordance with the rules and regulations of the
Securities and Exchange Commission ("SEC") and is consistent with the
assumptions the Company is using for Statement of Financial Accounting
Standards ("SFAS") 123 reporting. The estimated value has been determined
by application of the Black-Scholes option pricing model, based upon the
terms of the option grant and the Company's stock price performance
history as of the date of the grant. The key assumptions set forth below
used in the valuation are based upon experience, and are not a forecast of
future stock price or volatility, or of future dividend policy. No
adjustments have been made for the risk of forfeitures or for limitations
on transferability.
January 24 and February 8, 2000
November 22, 1999 Grant Grants June 12, 2000 Grant
----------------------- ------------------------------- -------------------
Dividend Yield: 1.08% Dividend Yield: 1.10% Dividend Yield: 1.05%
Volatility: 35.7% Volatility: 35.0% Volatility: 37.7%
Risk-free Rate of Return: 6.25% Risk-free Rate of Return: 6.72% Risk-free Rate of Return: 6.32%
Expected Exercise Period: 6 years Expected Exercise Period: 6 years Expected Exercise Period: 6 years
(C) Represents option grant to Mr. Castellini in February, 2000 in his
capacity as a non-employee director.
Stock Option Exercises
The following table contains information relating to the exercise of stock
options by the named executives in fiscal 2000, as well as the number and
value of their unexercised options as of September 30, 2000.
AGGREGATED OPTION/SAR EXERCISES IN FISCAL YEAR 2000 AND
FISCAL YEAR-END OPTION/SAR VALUES
Value Value of
Realized Number of Unexercised
(Market Securities Underlying In-the-Money
Value Unexercised Options/SARs at
Shares Less Options/SARs at Fiscal Year-End
Acquired Exercise Fiscal Year-End Exercisable/
Name on Exercise Price) Exercisable/Unexercisable(B) Unexercisable(A)(B)
- ---- ----------- -------- ---------------------------- -------------------
Clateo Castellini....... 0 0 2,693,350/102,934 $73,056,174/$2,391
Edward J. Ludwig........ 3,000 $ 50,580 654,916/186,000 5,003,388/0
Gary M. Cohen........... 0 0 299,288/113,000 801,783/0
John R. Considine....... 0 0 0/300,000 0/0
Vincent A. Forlenza..... 9,150 167,680 364,718/ 88,000 2,840,438/0
Deborah J. Neff......... 0 0 350,648/ 85,000 2,598,927/0
- --------
(A) The value of unexercised options represents the difference between the
closing price of the Company's Common Stock on September 29, 2000 ($26.44)
and the exercise price of each unexercised option held by the named
executives. Except for the option granted to Mr. Castellini in February,
2000, none of the unexerciseable options held by the named executive
officers were in-the-money on September 30, 2000.
(B) All option grants to the named executives are for a ten-year term. Except
as described below with respect to the November 1999 stock option grant to
Mr. Castellini, beginning with the January 1997 grant, options are
exercisable 50% after two years from date of grant and 100% after three
years from date of grant, subject to applicable rules and regulations of
the SEC. All options issued to the named executives prior to 1997 were
exercisable immediately, subject to applicable rules and regulations of
the SEC. One-half of the employee stock options granted to Mr. Castellini
in November, 1999 are exercisable only once the Company's Common Stock has
traded at or above $44.00 for 30 consecutive days, and the balance of that
stock option grant are exercisable only once the Common Stock has traded
at or above $50.00 for 30 consecutive trading days. Except for the option
for 2,934 shares granted to Mr. Castellini in February, 2000, these option
grants were issued in tandem with limited SARs, which are exercisable only
in the event of a tender offer for the Company's Common Stock or a change
in control of the Company, as defined under the Company's stock option
plans.
Retirement Plan
The Company's Retirement Plan (the "Retirement Plan") is a non-contributory
defined benefit plan. It provides for normal retirement at age 65 and permits
earlier retirement in certain cases. Benefits are based upon years of service
and compensation (comprised of salary, commissions, bonuses and stock award
distributions ("Covered Compensation")) for the five consecutive calendar
years which produce the highest average compensation. The Retirement Plan is
integrated with Social Security.
18
The Code limits the maximum annual benefit which may be paid to any
individual from the Retirement Plan's trust fund and the amount of
compensation that may be recognized. Under the Company's Retirement Benefit
Restoration Plan (the "Restoration Plan"), the Company will make supplemental,
unfunded payments to offset any reductions in benefits which may result from
such limitations. The Company's obligations to pay retirement benefits under
the Restoration Plan, as well as deferred amounts under the Company's Salary
and Bonus Deferral Plan, are secured by 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 in control of the
Company (as defined in the trust agreement).
The table below shows the estimated annual retirement benefits payable under
the Retirement Plan and the Restoration Plan at normal retirement date to all
eligible employees, including the named executives, in specified remuneration
and years of service classifications.
ESTIMATED ANNUAL RETIREMENT BENEFITS
Years of Credited Service
--------------------------------------------------------------
Maximum
Average
Compensation 10 15 20 25 30 35 40
- ------------ -------- -------- -------- -------- -------- -------- --------
$ 200,000 $ 28,347 $ 42,520 $ 56,694 $ 70,867 $ 85,041 $ 99,214 $113,388
300,000 43,347 65,020 86,694 108,367 130,041 151,714 173,388
400,000 58,347 87,520 116,694 145,867 175,041 204,214 233,388
500,000 73,347 110,020 146,694 183,367 220,041 256,714 293,388
600,000 88,347 132,520 176,694 220,867 265,041 309,214 353,388
700,000 103,347 155,020 206,694 258,367 310,041 361,714 413,388
800,000 118,347 177,520 236,694 295,867 355,041 414,214 473,388
900,000 133,347 200,020 266,694 333,367 400,041 466,714 533,388
1,000,000 148,347 222,520 296,694 370,867 445,041 519,214 593,388
1,100,000 163,347 245,020 326,694 408,367 490,041 571,714 653,388
1,200,000 178,347 267,520 356,694 445,867 535,041 624,214 713,388
1,300,000 193,347 290,020 386,694 483,367 580,041 676,714 773,388
1,400,000 208,347 312,520 416,694 520,867 625,041 729,214 833,388
Covered Compensation includes all components of each named executive's
Annual Compensation as set forth in the Summary Compensation Table on page 16
hereof, plus the distributed portion of awards granted to each executive
through January 1993 under the Company's Stock Award Plan for Messrs. Ludwig,
Cohen and Forlenza, and Ms. Neff. Amounts shown are calculated on a straight-
life annuity basis, and are not subject to any further deduction for Social
Security benefits or other offsets. Employees may elect to receive the
actuarial value of their retirement benefits in a lump sum in lieu of a
lifetime pension.
Under the Retirement Plan, years of credited service as of December 31,
2000, and Covered Compensation for the calendar year ending December 31, 2000,
are 21 years and $1,057,500 for Mr. Ludwig, 17 years and $600,042 for Mr.
Cohen, 1 year and $630,449 for Mr. Considine, 20 years and $491,250 for Mr.
Forlenza and 12 years and $490,064 for Ms. Neff.
In addition, Mr. Considine has an agreement with the Company under which Mr.
Considine is entitled to receive an annual supplemental pension benefit of
$86,900 in the event his employment is terminated before the age of 55. In the
event Mr. Considine remains with the Company beyond his 55th birthday, he will
be entitled to receive an actuarially increased annual supplemental pension
benefit. In addition, under a separate agreement, if Mr. Considine's
employment is terminated prior to age 55 other than for cause or as a result
of a voluntary termination, he will be entitled to participate in the
Company's retiree medical plan upon the attainment of age 55. If Mr. Considine
remains employed by the Company beyond his 55th birthday, he will be entitled
to participate in the retiree medical plan following termination of his
employment for any reason.
19
Contractual Obligations
Messrs. Ludwig, Cohen, Forlenza and Considine, and Ms. Neff, have agreements
with the Company which provide for the continued employment of the named
executives for a period of three years following a change of control of the
Company. In the event of a termination by the Company other than for cause, or
by the named executive for good reason, at any time during the three years
following a change in control of the Company, the named executive would
receive a payment equal to three times the executive's annual compensation
(salary and bonus), and certain of his or her fringe benefits (reduced to the
extent provided by any subsequent employer) would be continued for not less
than three years. In addition, in the event of termination by the Company
other than for cause, or by the named executive for good reason, within three
years following a change in control, the named executive would be entitled to
receive the actuarial equivalent of the additional pension benefits which the
named executive would have earned had he or she remained an employee for an
additional three years following termination. The terms "cause," "good reason"
and "change in control" are defined in the agreements.
If any termination payments to a named executive pursuant to his or her
agreement should be subject to the excise tax imposed by Section 4999 of the
Code, the Company would reimburse the named executive in an amount such that
the named executive would retain the same amount, net of all taxes, that he or
she would have retained had the excise tax not been in effect.
Certain Transactions
In May, 2000, the Company guaranteed two loans, each in the amount of
$110,000, extended by a financial institution to Vincent A. Forlenza, Senior
Vice President--Technology, Strategy and Development, and A. John Hanson,
President--Becton Dickinson Europe. The loans were extended to them for
purposes of funding the exercise price and payment of related taxes on stock
options which were due to expire and which Messrs. Forlenza and Hanson then
were prevented, under the Company's policies on trading by executive officers,
from exercising through the Company's customary cashless exercise program. The
Company extended the guarantees in order to avoid Messrs. Forlenza and
Hanson's forfeiture of these options. The loans were subsequently repaid in
full.
Performance Comparison
The following graph presents a comparison of cumulative total return to
shareholders for the five-year period ended September 30, 2000, for the
Company, the S&P 500 Index, and for a peer group of fourteen companies,
selected on a line-of-business basis (the "Peer Group"). The comparison period
presented is required by applicable rules and regulations of the SEC.
Cumulative total return to shareholders is measured by dividing total
dividends (assuming dividend reinvestment) plus per share price change for the
period by the share price at the beginning of the measurement period. The
Company's cumulative shareholder return is based on an investment of $100 on
September 30, 1995 and is compared to the cumulative total return of the S&P
500 Index and the weighted, average performance of the Peer Group over the
same period with a like amount invested.
The companies composing the Peer Group consist of St. Jude Medical, Inc.,
Beckman Coulter Inc., Guidant Corp., Boston Scientific Corp., Allergan Inc.,
C.R. Bard, Inc., Bausch & Lomb, Inc., Medtronic, Inc., Baxter International
Inc., Abbott Laboratories, Pfizer, Inc., American Home Products Corp.,
Bristol-Myers Squibb Company and Johnson & Johnson.
The Company determined to use the Peer Group's performance rather than the
S&P Medical Index as one of the bases against which to compare its change in
cumulative total shareholder return. This change is consistent with the
Company's practice introduced in 1998 to measure relative Company performance
against that of the Peer Group when determining the size of option grants
under the Senior Executive Option Policy.
20
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG BECTON, DICKINSON AND COMPANY, THE S & P 500 INDEX
AND A SELECTED PEER GROUP
BECTON DICKINSON & COMPANY PEER GROUP S & P 500
9/95 100 100 100
12/95 119.6507 113.0002 105.3935
3/96 129.1172 119.0262 110.1943
6/96 127.3977 125.2031 114.0875
9/96 137.9874 133.6215 116.5747
12/96 136.3089 136.376 124.3484
3/97 140.3285 141.494 126.5597
6/97 153.1255 171.2954 143.4686
9/97 147.9395 170.9638 150.4889
12/97 152.666 185.0523 152.9327
3/98 189.1036 205.4898 166.4649
6/98 203.3829 214.9415 169.3775
9/98 209.5422 212.5794 159.0736
12/98 213.5564 231.4408 179.9407
3/99 203.513 238.2559 184.5891
6/99 181.9871 232.4388 191.301
9/99 175.8018 226.6962 184.7446
12/99 172.1328 221.7427 199.2873
3/00 170.1131 228.8329 201.2835
6/00 179.4978 255.6404 198.3488
9/00 171.9531 254.0341 197.1051
Proposal 2.
SELECTION OF INDEPENDENT AUDITORS
The Board of Directors, pursuant to the recommendation of the Audit
Committee, has selected Ernst & Young LLP to audit the accounts of the Company
and its subsidiaries for the fiscal year ending September 30, 2001. A
representative of Ernst & Young LLP will attend the Annual Meeting to respond
to appropriate questions and will have the opportunity to make a statement.
The Board of Directors recommends a vote FOR approval of the selection of
Ernst & Young LLP. If approval is withheld, the Board will reconsider its
selection.
21
SHAREHOLDER PROPOSAL
Proposal 3.
PROPOSAL ON CUMULATIVE VOTING
Mrs. Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Avenue N.W.,
Suite 215, Washington, D.C. 20037, owner of 800 shares of Common Stock, has
informed the Company that she plans to introduce the following resolution at
the meeting:
RESOLVED: "That the stockholders of Becton Dickinson, assembled in Annual
Meeting in person and by proxy, hereby request the Board of Directors to
take the necessary steps to provide for cumulative voting in the election
of directors, which means each stockholder shall be entitled to as many
votes as shall equal the number of shares he or she owns multiplied by the
number of directors to be elected, and he or she may cast all of such votes
for a single candidate, or any two or more of them as he or she may see
fit."
REASONS: "Many states have mandatory cumulative voting, so do National
Banks."
"In addition, many corporations have adopted cumulative voting."
"Last year, the owners of 64,608,705 shares, representing approximately
35.5% of the votes cast, voted FOR this proposal."
"If you AGREE, please mark your proxy FOR this resolution."
The Board of Directors recommends a vote AGAINST Proposal 3.
Like most major corporations, BD provides that each share of common stock is
entitled to one vote for each nominee for director. The Board of Directors
believes that the current voting system is most likely to produce an effective
Board of Directors which will represent the interests of all of the Company's
stockholders. Each of your directors shares the common objective of advancing
the best interests of all shareholders rather than those of any particular
group. In contrast to this approach, cumulative voting could permit
stockholders representing less than a majority of all shares to elect a
director to represent their particular interests and views. This could result
in a Board of Directors on which each director advocates the positions of the
group responsible for his or her election rather than the positions that are
in the best interest of the Company and of all of the stockholders.
Our shareholders have rejected this proposal at each of our last four annual
meetings and have rejected similar proposals each time they have been
presented. Your Board of Directors continues to believe that changing the
current voting procedure would not be in the best interests of all of our
shareholders or of the Company.
Accordingly, the Board recommends a vote AGAINST this proposal.
SHAREHOLDER PROPOSALS FOR 2002 ANNUAL MEETING
Any proposal that a shareholder wishes to submit for inclusion in the
Company's Proxy Statement and proxy card/voting instruction card for the 2002
Annual Meeting of Shareholders ("2001-2002 Proxy Statement") pursuant to SEC
Rule 14a-8 must be received by the Company no later than August 28, 2001.
In addition, notice of any proposal that a shareholder wishes to propose for
consideration at the 2002 Annual Meeting of Shareholders, but does not seek to
include in the Company's 2001-2002 Proxy Statement pursuant to Rule 14a-8,
must be delivered to the Company no earlier than October 16, 2001 and no later
than November 15, 2001, if the proposing shareholder wishes for the Company to
describe the nature of the proposal in the 2000-2001 Proxy Statement as a
condition to exercising its discretionary authority to vote proxies on the
proposal. Any shareholder proposals or notices submitted to the Company in
connection with the 2002 Annual Meeting of Shareholders should be addressed
to: Secretary, Becton, Dickinson and Company, 1 Becton Drive, Franklin Lakes,
New Jersey 07417.
22
APPENDIX
AUDIT COMMITTEE CHARTER
The Audit Committee shall consist of not less than three members, none of
whom are current or former officers or employees of the Company or any
subsidiary of the Company and each of whom is appointed by the Board. The
Audit Committee, which is part of the Board, shall assist the Board in
monitoring (1) the integrity of the financial statements of the Company, and
(2) the independence and performance of the Company's internal and external
auditors.
The members of the Audit Committee shall meet the independence and expertise
requirements of the New York Stock Exchange. The members of the Audit
Committee shall be appointed by the Board on the recommendation of the
Corporate Governance Committee.
The Audit Committee shall have the authority, following notice to the
Chairman of the Board and Chief Executive Officer of the Company, to retain
special legal, accounting or other consultants to advise the Committee. The
Audit Committee may request any officer or employee of the Company, or the
Company's outside counsel or independent auditor, to attend a meeting of the
Committee or to meet with any members of, or consultants to, the Committee.
The Audit Committee shall make regular reports to the Board.
The Audit Committee shall:
In regards to the independent auditor:
1. Recommend to the Board the appointment of the independent auditor,
which firm is ultimately accountable to the Audit Committee and the
Board, and evaluate, with management, the performance of the
independent auditor, and, if so determined by the Audit Committee,
recommend to the Board the replacement of the independent auditor.
2. Receive reports from the independent auditor at least annually
regarding the auditor's independence, discuss such reports with the
auditor to the extent they disclose any relationships or services that
may impact the objectivity and independence of the outside auditor,
and, if so determined by the Audit Committee, recommend that the Board
take appropriate action to satisfy itself of the independence of the
auditor.
In regards to financial reporting:
1. Review the annual and quarterly financial statements with management and
the independent auditor, including significant reporting issues and
judgments made in connection with such financial statements.
2. Review the Company's accounting principles and any changes thereto
suggested by the independent auditor, internal auditors or management.
3. Submit the Audit Committee report required by the rules of the
Securities and Exchange Commission to be included in the Company's
annual proxy statement.
In regards to the audit process of the independent auditor:
1. Meet with the independent auditor prior to the audit to review planning
and staffing.
2. Review with the independent auditor any problems or difficulties the
auditor may have encountered in the course of the audit, and any
management letter provided by the auditor and the Company's response to
that letter.
3. Discuss with the independent auditor the matters outlined by Statement
on Auditing Standards No. 61 relating to the conduct of the audit, and
obtain from the independent auditor assurance that the procedural,
reporting and other requirements of Section 10A of the Securities
Exchange Act of 1934 have been satisfied.
23
In regards to the internal audit process:
1. Review the appointment and replacement of the senior internal auditing
executive, the adequacy of the internal audit staff and the scope of its
activities.
2. Review the significant reports to management prepared by the internal
auditing department and management's responses.
3. Review with management, internal audit and the independent auditor the
adequacy of internal controls that could significantly affect the
Company's financial statements.
In regards to legal matters:
1. Review with the Company's General Counsel and management legal matters
that may have a material impact on the financial statements, the
Company's compliance policies and any material reports or inquiries
received from regulators or governmental agencies.
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are complete
and accurate and are in accordance with generally accepted accounting
principles. This is the responsibility of management and the independent
auditor. Nor is it the duty of the Audit Committee to conduct investigations,
to resolve disagreements, if any, between management and the independent
auditor or to assure compliance with laws and regulations and the Company's
Code of Conduct.
The Audit Committee shall review and reassess the adequacy of this Charter
annually and recommend any proposed changes to the Board for approval.
24
DIRECTIONS TO
THE WOODCLIFF LAKE HILTON
from WESTERN NJ
Route 80 East to Garden State Parkway North. Take Garden State Parkway to Exit
171 (Woodcliff Lake). Turn left onto Glen Road. Turn right onto Chestnut Ridge
Road. Proceed approximately one-half mile and turn left onto Tice Boulevard.
Proceed to hotel on the left.
from NEWARK AIRPORT
Route 78 West to Garden State Parkway North. Take Garden State Parkway to Exit
171 (Woodcliff Lake). Turn left onto Glen Road. Turn right onto Chestnut Ridge
Road. Proceed approximately one-half mile and turn left onto Tice Boulevard.
Proceed to hotel on the left.
from TAPPAN ZEE BRIDGE
Over Tappen Zee onto New York Thruway (287 West). Take Thruway to Exit 14A to
Garden State Parkway. Take first exit (School House Road-Pearl River). Turn
left onto School House Road, and turn right at light onto Summit Avenue. Turn
left at light onto Chestnut Ridge Road. Proceed 1.5 miles and turn right onto
Tice Boulevard. Proceed to hotel on the left.
from LAGUARDIA AIRPORT
Grand Central Parkway West (follow signs for George Washington Bridge) to Tri-
Boro bridge. Over bridge onto Major Deegan Expressway to Interstate 95 West.
Proceed over the GW Bridge, onto Route 80 West, to Garden State Parkway North.
Take Garden State Parkway to Exit 171 (Woodcliff Lake). Turn left onto Glen
Road. Turn right onto Chestnut Ridge Road. Proceed approximately one-half mile
and turn left onto Tice Boulevard. Proceed to hotel on the left.
PARKING WILL BE AVAILABLE
P
R
O
X
Y
PROXY/VOTING INSTRUCTION CARD
BECTON, DICKINSON AND COMPANY
Proxy Solicited on Behalf of the Board of Directors for
Annual Meeting on February 13, 2001
The undersigned hereby appoints Clateo Castellini, Edward J. Ludwig and Bridget
M. Healy, and any of them, with full power of substitution, proxies to attend
the annual meeting of the shareholders of the Company to be held at 2:00 PM, on
Tuesday, February 13, 2001 at The Woodcliff Lake Hilton, 200 Tice Boulevard,
Woodcliff Lake, 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 card constitutes voting instructions to the Trustee and the Custodian,
respectively, for any shares of Common Stock allocated to the undersigned under
the Company's 1996 Directors' Deferral Plan ("DDP"), the Company's Salary and
Bonus Deferral Plan ("SBDP") and, when so provided, under the Company's Global
Share Investment Program ("GSIP"), and also constitutes voting instructions to
the Trustee and the Custodian for a proportionate number of shares of Common
Stock in the DDP, SBDP and GSIP, respectively, for which no instruction card has
been received from other participants.
This card also constitutes voting instructions to the Trustee for any shares of
Common Stock and Series B ESOP Convertible Preferred Stock allocated to the
undersigned under the Company's Savings Incentive Plan ("SIP"). In addition,
unless the box provided below is checked, this card also constitutes voting
instructions to the Trustee for a proportionate number of shares of Common Stock
and Series B ESOP Convertible Preferred Stock in the SIP that have not been
allocated to participants or for which no instruction card has been received
from other participants ("unallocated/unvoted SIP shares").
Election of Directors, Nominees:
Term to Expire 2002 Term to Expire 2004
01-Gerald M. Edelman 01 - Henry P. Becton, Jr.
02 - James F. Orr
03 - Margaretha af Ugglas
You are encouraged to specify your choices by marking the appropriate boxes, SEE
REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. If you do not vote by telephone
or over the internet, please sign and return this card using the enclosed
envelope.
CONTINUED
AND TO BE
SIGNED, ON
REVERSE SIDE
- --------------------------------------------------------------------------------
/\ DETACH CARD /\
| 1508
__________
[X] Please mark your
votes as in this
example.
This proxy when properly executed will be voted in the manner directed herein.
If no direction is made, this proxy will be voted FOR Election of Directors, FOR
Proposal 2 and AGAINST Proposal 3.
The Board of Directors recommends a vote FOR Proposals 1 and 2.
FOR WITHHELD
1. Election of [_] [_]
Directors
(see reverse)
For, except vote withheld from the following nominee(s):
- --------------------
FOR AGAINST ABSTAIN
2. Approval of [_] [_] [_]
independent auditors.
The Board of Directors recommends a vote AGAINST Proposal 3.
FOR AGAINST ABSTAIN
3. Cumulative voting. [_] [_] [_]
If this box is checked, this card [_]
does NOT constitute voting
instructions to the Trustee with respect to
unallocated/unvoted SIP shares.
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
Signature for all shares (OTHER THAN unallocated/unvoted SIP shares if the box
immediately above is checked):
- ------------------------------------------------------------
- ------------------------------------------------------------
SIGNATURE (S) DATE
- --------------------------------------------------------------------------------
/\ FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR VOTED PROXY/VOTING /\
INSTRUCTION CARD BY MAIL
[LOGO] BD Indispensible to human health
Dear Shareholder:
Becton, Dickinson and Company (BD) encourages you to take advantage of new and
convenient ways by which you can vote your shares. You can vote your shares 24
hours a day, 7 days a week, using either a touch-tone telephone or through the
internet. 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 you must use the control number printed in
the box above, just below the perforation. The series of numbers that appear in
the box above must be used to access the system. YOUR INTERNET OR TELEPHONE VOTE
MUST BE RECEIVED BY 12:01 A.M., NEW YORK CITY TIME, ON FEBRUARY 12, 2001.
1. To vote over the internet, log on to the internet and go to the Web Site
http://www.eproxyvote.com/bdx.
2. To vote over the telephone, on a touch-tone telephone dial 1-877-PRXVOTE
(1-877-779-8683). Outside of the U.S. and in Canada, shareholders should call
1-201-536-8073.
Your telephone or internet vote authorizes the proxies named on the above
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
telephonically or through the internet, there is no need to mail back your
proxy/voting instruction card.
Your vote is important. Thank you for voting.