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  o

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o  Preliminary Proxy Statement

o  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

þ  Definitive Proxy Statement

o  Definitive Additional Materials

o  Soliciting Material Pursuant to §240.14a-12

 

Becton, Dickinson and Company

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

December 23, 2009

Dear Fellow Shareholders:

          You are cordially invited to attend the 2010 Annual Meeting of Shareholders of Becton, Dickinson and Company (“BD”) to be held at 1:00 p.m. EST on Tuesday, February 2, 2010 at the Hilton Short Hills, 41 John F. Kennedy Parkway, Short Hills, New Jersey. You will find directions to the meeting on the back cover of the accompanying proxy statement.

          The notice of meeting and proxy statement describe the matters to be acted upon at the meeting. We also will report on matters of interest to BD shareholders.

          Your vote is important. Whether or not you plan to attend the Annual Meeting in person, we encourage you to vote so that your shares will be represented and voted at the meeting. You may vote by proxy on the 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,


Edward J. Ludwig
Chairman and Chief Executive Officer

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

Becton, Dickinson and Company

1 Becton Drive

Franklin Lakes, New Jersey 07417-1880

December 23, 2009

          The 2010 Annual Meeting of Shareholders of Becton, Dickinson and Company (“BD”) will be held as follows:

DATE:		Tuesday, February 2, 2010
TIME:		1:00 p.m. EST
LOCATION:		Hilton Short Hills
		41 John F. Kennedy Parkway
		Short Hills, New Jersey
PURPOSE:		To consider and act upon the following proposals:
		1.      The election as directors of the eight nominees named in the attached proxy statement for a one-year term;
		2.      The ratification of the selection of the independent registered public accounting firm;
		3.      Approval of an amendment to BD’s By-Laws to permit holders of at least 25% of the voting power of the outstanding capital stock to call a special meeting of shareholders;
		4.      Approval of an amendment to the 2004 Employee and Director Equity-Based Compensation Plan;
		5.      Approval of material terms of performance goals;
		6.      A shareholder proposal relating to majority voting;
		7.      A shareholder proposal relating to cumulative voting; and
		8.      Such other business as may properly come before the meeting.

          Shares represented by properly executed proxies will be voted in accordance with the instructions specified therein. Shares represented by proxies that are not limited to the contrary will be voted for the election as directors of the persons nominated in the accompanying proxy statement (Proposal 1), for Proposals 2, 3, 4 and 5, and against Proposals 6 and 7.

          Important Notice Regarding the Availability of Proxy Materials for the 2010 Annual Meeting of Shareholders to be held on February 2, 2010. BD’s proxy statement and 2009 Annual Report, which includes consolidated financial statements, are available at www.bd.com/investors/.

          Shareholders of record at the close of business on December 11, 2009 will be entitled to attend and vote at the meeting.

By order of the Board of Directors,


Dean J. Paranicas
Vice President, Corporate Secretary and Public Policy

Table of Contents

GENERAL INFORMATION			1
Proxy Solicitation			1
Shareholders Entitled to Vote; Attendance at the Meeting			1
Quorum; Required Vote			1
How to Vote			2
Revocation of Proxies			2
Other Matters			2
OWNERSHIP OF BD COMMON STOCK			3
Securities Owned by Certain Beneficial Owners			3
Securities Owned by Directors and Management			3
BD Common Stock			4
Section 16(a) Beneficial Ownership Reporting Compliance			4
ELECTION OF DIRECTORS (Proposal 1)			5
Nominees for Director			5
Continuing Directors			7
BOARD OF DIRECTORS			8
The Board and Committees of the Board			8
Committee Membership and Function			8
Audit Committee			8
Compensation and Benefits Committee			9
Corporate and Scientific Affairs Committee			10
Corporate Governance and Nominating Committee			10
Board, Committee and Annual Meeting Attendance			11
Non-Management Directors’ Compensation			11
Communication With Directors			13
CORPORATE GOVERNANCE			13
Corporate Governance Principles			13
Significant Governance Practices			14
COMPENSATION DISCUSSION AND ANALYSIS			18
REPORT OF THE COMPENSATION AND BENEFITS COMMITTEE			33
COMPENSATION OF NAMED EXECUTIVE OFFICERS			35
Summary Compensation Table			35
Information Regarding Plan Awards in Fiscal Year 2009			38
Information Regarding Equity-Based Compensation Awards in Fiscal Year 2010			40
Outstanding Equity Awards at 2009 Fiscal Year-End			41
Stock Option Exercises and Vesting of Stock Units			43
Other Compensation			43
Pension Benefits at 2009 Fiscal Year-End			44
Nonqualified Deferred Compensation in Fiscal Year 2009			46
Payments Upon Termination of Employment or Change of Control			47
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (Proposal 2)			50
Report of the Audit Committee			51
AMENDMENT TO BD’S BY-LAWS REGARDING SPECIAL SHAREHOLDER MEETINGS (Proposal 3)			52
AMENDMENT TO THE 2004 EMPLOYEE AND DIRECTOR EQUITY-BASED COMPENSATION PLAN (Proposal 4)			53
APPROVAL OF MATERIAL TERMS OF PERFORMANCE GOALS (Proposal 5)			57
SHAREHOLDER PROPOSAL ON MAJORITY VOTING (Proposal 6)			60
SHAREHOLDER PROPOSAL ON CUMULATIVE VOTING (Proposal 7)			62
SHAREHOLDER PROPOSALS OR DIRECTOR NOMINATIONS FOR 2011 ANNUAL MEETING			63
APPENDICES			A-1
A - Proposed Amendment to BD’s By-Laws			A-1
B - 2004 Employee and Director Equity-Based Compensation Plan			B-1
DIRECTIONS TO THE HILTON SHORT HILLS		Back Cover

PROXY STATEMENT

2010 ANNUAL MEETING OF SHAREHOLDERS
Tuesday, February 2, 2010

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 23, 2009 in connection with the solicitation of proxies by the Board of Directors for BD’s Annual Meeting of Shareholders (the “2010 Annual Meeting”) to be held at 1:00 p.m. EST on Tuesday, February 2, 2010 at the Hilton Short Hills, 41 John F. Kennedy Parkway, Short Hills, New Jersey. Important Notice Regarding the Availability of Proxy Materials for the 2010 Annual Meeting of Shareholders to be held on February 2, 2010. This proxy statement and BD’s 2009 Annual Report (the “2009 Annual Report”) are also available at www.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 $20,000 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 11, 2009 are entitled to notice of and to vote at the meeting. As of such date, there were 236,927,176 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 holder of record (also known as “street name”) and you wish to attend the meeting, you must present proof of ownership as of the record date, such as a current bank or brokerage account statement, to be admitted. BD also may request appropriate identification as a condition of admission.

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. Abstentions and shares that brokers have the authority to vote in the absence of timely instructions from the beneficial owners are treated as present for the purposes of determining a quorum.

          Directors are elected by a plurality of the votes cast at the meeting (Proposal 1). Under New Jersey law, abstentions and shares (if any) for which brokers do not have the authority to vote in the absence of instructions from beneficial owners (“broker non-votes”) will not be counted as votes cast and, accordingly, will have no effect on the outcome of the vote for directors. Under BD’s Corporate Governance Principles (the “Principles”), any nominee for director who receives a greater number of votes “withheld” than votes “for” is required to offer to submit his or her resignation from the Board following the shareholder vote. The Board will consider what action is to be taken with respect to the same. We will publicly disclose the Board’s decision. A more detailed description of these procedures is contained on page 14 under the heading “Corporate Governance—Significant Governance Practices—Voting for Directors” and in the Principles, which are available on BD’s website at www.bd.com/investors/corporate_governance/. Printed copies of the Principles may be obtained, without charge, by contacting the Corporate Secretary, BD, 1 Becton Drive, Franklin Lakes, New Jersey 07417-1880, phone 1-201-847-6800.

          Approval of Proposals 2, 3, 4, 5, 6 and 7 requires the affirmative vote of a majority of the votes cast at the meeting. Under New Jersey law, in determining whether any of these proposals has received the requisite number of affirmative votes, abstentions and broker non-votes will not be counted as votes cast, and, accordingly, will not affect the outcome of the vote. Proposals 2 and 3 are “discretionary items” and New York Stock Exchange (“NYSE”) member brokers that do not receive instructions on how to vote may cast those votes in their discretion.

How to Vote

          Shareholders of record may attend and cast their votes at the meeting. In addition, shareholders of record may cast their vote by proxy and participants in the BD plans described below may submit their voting instructions by:

	(1)		using the internet and voting at the website listed on the enclosed proxy/voting instruction card (the “proxy card”);
	(2)		using the toll-free telephone number listed on the enclosed proxy card; or
	(3)		signing, completing and returning the enclosed proxy card in the enclosed postage-paid envelope.

          Votes cast through the internet and telephone voting procedures are authenticated by use of a personal identification number. This procedure allows shareholders to appoint a proxy, and the various plan participants to provide voting instructions, and to confirm that their actions have been properly recorded. Specific instructions to be followed are set forth on the enclosed proxy card. If you vote through the 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 27, 2010, and voting instructions submitted by participants in all other BD plans must be received by 12:00 p.m. EST on January 29, 2010. All proxies submitted through the internet or by telephone must be received by 11:00 a.m. EST on February 2, 2010.

          If you are the beneficial owner of shares held in “street name,” you have the right to direct your bank, broker or other nominee on how to vote your shares by using the voting instruction form provided to you by them, or by following their instructions for voting through the 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.

Savings Incentive Plan (SIP)

          Participants in SIP may instruct the SIP trustee how to vote all shares of BD common stock allocated to their SIP accounts. The SIP trustee will vote the SIP shares for which it has not received instructions in the same proportion as the SIP shares for which it has received instructions.

Participants in Other Plans

          Participants in the Savings Incentive Plan of Med-Safe Systems, Inc., a wholly-owned subsidiary of BD (the “Med-Safe Plan”), may instruct the Med-Safe Plan’s trustee how to vote all shares of BD common stock allocated to their accounts. The Med-Safe Plan’s trustee will vote shares for which it has not received instructions in the same proportion as the shares for which it has received instructions.

          Participants in BD’s Deferred Compensation and Retirement Benefit Restoration Plan (“DCP”), the 1996 Directors’ Deferral Plan (“DDP”), and GSIP (if so provided under the terms of the local country GSIP plan) may provide voting instructions for all shares of BD common stock allocated to that person’s plan account.

          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

          A proxy given by a shareholder of record may be revoked at any time before it is voted by sending written notice of revocation to the Corporate Secretary of BD at the address set forth above, by delivering a proxy (by one of the methods described above under the heading “How to Vote”) bearing a later date, or by voting in person at the meeting. Participants in the plans described above may revoke their voting instructions by delivering new voting instructions by one of the methods described above under the heading “How to Vote.”

          If you are the beneficial owner of shares held in “street name,” you may submit new voting instructions in the manner provided by your bank or broker or other nominee, or you may vote in person at the 2010 Annual 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 will vote on such matters in accordance with their best judgment.

          Multiple BD shareholders who share an address may receive only one copy of this proxy statement and the 2009 Annual Report from their bank, broker or other nominee, unless contrary instructions are received. We will deliver promptly a separate copy of this proxy statement and the 2009 Annual Report to any BD shareholder who resides at a shared address, to which a single copy of the documents was delivered, if the shareholder makes a request by contacting the Corporate Secretary, BD, 1 Becton Drive, Franklin Lakes, New Jersey 07417-1880, phone 1-201-847-6800. Beneficial owners sharing an address who are receiving multiple copies of this proxy statement and the 2009 Annual Report and who wish to receive a single copy of each at the same address in the future will need to contact their bank, broker or other nominee.

OWNERSHIP OF BD COMMON STOCK

Securities Owned by Certain Beneficial Owners

          The following table sets forth as of September 30, 2009, information concerning those persons known to BD to be the beneficial owner of more than 5% of BD’s outstanding common stock. This information is as reported by such persons in their Schedule 13G filings with the Securities and Exchange Commission (“SEC”).

		Amount and
		Nature of
Name and Address of		Beneficial				Percent of
Beneficial Owner		Ownership				Class
State Street Corporation State Street Bank and Trust Company, Trustee State Street Financial Center One Lincoln Street Boston, MA 02111			13,819,337	(1)		5.8%
AXA Financial, Inc.			12,709,098	(2)		5.2%
1290 Avenue of the Americas New York, NY 10104

Securities Owned by Directors and Management

          The table on the following page sets forth as of November 30, 2009 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 35, and (iii) all directors and executive officers as a group. In general, “beneficial ownership” includes those shares that a director or executive officer has the power to vote or transfer, including shares that may be acquired under outstanding equity compensation awards or otherwise within 60 days of such date.

          No individual director or executive officer owns more than 1% of the outstanding BD common stock. Together, the directors and executive officers, as a group, own approximately 1.4% of the outstanding BD common stock as of November 30, 2009. Except as indicated in the footnotes to the table, each person has sole voting and investment power with respect to the shares he or she beneficially owns.

BD COMMON STOCK

		Amount and Nature of
		Beneficial Ownership
		Shares Owned				Shares That May Be
		Directly and				Acquired within				Total Shares				Percentage of
Name		Indirectly(1)				60 days(2)				Beneficially Owned				Class
Basil L. Anderson			5,362				10,702				16,064					*
Henry P. Becton, Jr. (3)			768,542				24,382				792,924					*
John R. Considine			133,636				181,229				314,865					*
Edward F. DeGraan			7,678				14,279				21,957					*
David V. Elkins			0				0				0
Vincent A. Forlenza			70,486				250,748				321,234					*
Claire M. Fraser-Liggett			0				5,282				5,282					*
William A. Kozy			69,249				192,437				261,686					*
Marshall O. Larsen			1,376				3,653				5,029					*
Edward J. Ludwig			247,769				821,111				1,068,880					*
Adel A.F. Mahmoud			110				5,282				5,392					*
Gary A. Mecklenburg			3,157				10,702				13,859					*
Cathy E. Minehan			4,000				3,653				7,653					*
James F. Orr			11,437				14,279				25,716					*
Willard J. Overlock, Jr.			22,461				19,387				41,848					*
Bertram L. Scott			7,236				17,060				24,296					*
Alfred Sommer			12,407				16,340				28,747					*
Directors and executive officers as a group (23 persons)			1,506,160				1,915,608				3,421,768				1.4	%

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, 2008 through September 30, 2009, all of its directors and executive officers were in compliance with the disclosure requirements of Section 16(a), except that (i) a report on Form 4 on behalf of Henry P. Becton, Jr. for the sale of shares through a trust of which he is co-trustee was inadvertently filed one day late, and (ii) a report on Form 3 on behalf of William A. Tozzi, who re-assumed the role of principal accounting officer effective September 22, 2009, was inadvertently filed one week late.

          At the 2009 Annual Meeting of Shareholders (the “2009 Annual Meeting”), the shareholders approved an amendment to BD’s Restated Certificate of Incorporation to declassify the Board and provide for the annual election of the Board. The declassification is being phased so that those directors elected at the 2009 Annual Meeting and those continuing directors whose current terms expire at the 2010 Annual Meeting are eligible for election for one-year terms at the 2010 Annual Meeting. Those continuing directors whose current terms expire at the 2011 Annual Meeting of Shareholders (the “2011 Annual Meeting”) will serve the remainder of their terms, and will be eligible, together with the other directors, to stand for reelection for a one-year term beginning with the 2011 Annual Meeting.

          The Board accordingly nominates for election Henry P. Becton, Jr., Edward F. DeGraan, Claire M. Fraser-Liggett, Edward J. Ludwig, Adel A.F. Mahmoud, James F. Orr, Willard J. Overlock, Jr. and Bertram L. Scott to serve for a term of one year and until their successors have been elected and qualified.

          All of the nominees for election have consented to being named in this proxy statement and to serve if elected. Presented below is biographical information for each of the nominees and the other directors continuing in office.

 

The Board of Directors recommends a vote FOR each of the nominees for director.

CONTINUING DIRECTORS

Term to Expire 2011

BOARD OF DIRECTORS

The Board and Committees of the Board

          BD is governed by a Board of Directors that currently consists of 13 members, 12 of whom have been determined by the Board to be independent. The Board has established five Committees: the Executive Committee, the Audit Committee, the Compensation and Benefits Committee, the Corporate and Scientific Affairs Committee, and the Corporate Governance and Nominating Committee. All Committees meet regularly, except for the Executive Committee, which meets only as necessary. Committee meetings may be called by the Committee chair, the Chairman of the Board or a majority of Committee members. The Board has adopted a written charter for each of the Committees that are posted on BD’s website at www.bd.com/investors/corporate_governance/. Printed copies of these charters, BD’s 2009 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, 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 operating Committees.

 

AUDIT COMMITTEE

Function

	•		Retains and reviews the qualifications, independence and performance of BD’s registered public accounting firm (the “independent auditors”).
	•		Reviews BD’s public financial disclosures, financial statements and accounting principles, policies and practices; the scope and results of the annual audit by the independent auditors; BD’s internal audit process; and the effectiveness of BD’s internal control over financial reporting.
	•		Reviews BD’s guidelines and policies relating to enterprise risk assessment and risk management, and management’s plan for risk mitigation or remediation.
	•		Functions as a qualified legal compliance committee when necessary.

		Members		Basil L. Anderson — Chair
				Marshall O. Larsen
				Gary A. Mecklenburg
				Cathy E. Minehan
				James F. Orr
				Bertram L. Scott

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

          The Audit Committee meets separately with the internal and external auditors to ensure full and frank communications with the Audit Committee.

 

COMPENSATION AND BENEFITS COMMITTEE

Function

	•		Reviews BD’s compensation and benefits policies, recommends to the independent members of the Board for their approval the compensation of the Chief Executive Officer, and approves the compensation of BD’s other executive officers.
	•		Approves all employment, severance and change of control agreements of BD with executive officers.
	•		Serves as the granting and administrative committee for BD’s equity compensation plans.
	•		Oversees the administration of certain BD benefit plans.

		Members		Edward F. DeGraan — Chair
				Basil L. Anderson
				Marshall O. Larsen
				James F. Orr
				Willard J. Overlock, Jr.
				Bertram L. Scott

          The Board has determined that each member of the Compensation and Benefits Committee meets the independence requirements of the NYSE.

          The Compensation and Benefits Committee oversees the compensation program for the named executive officers listed in the Summary Compensation Table on page 35 and for BD’s other executive officers. The Compensation and Benefits Committee may not delegate these responsibilities to another Committee, individual director or member of management.

          Role of Management

          The Compensation and Benefits Committee’s meetings are typically attended by BD’s Chief Executive Officer, Chief Financial Officer, Senior Vice President — Human Resources and others, who support the Compensation and Benefits Committee in fulfilling its responsibilities. The Compensation and Benefits Committee considers management’s views relating to compensation matters, including overall compensation levels and the performance metrics and targets for BD’s performance-based compensation. Management also provides information (which is reviewed by our Internal Audit Department) to assist the Committee in determining the extent to which performance targets have been achieved. This includes any recommended adjustments to BD’s operating results when assessing BD’s performance. The Chief Executive Officer and Senior Vice President — Human Resources also work with the Compensation and Benefits Committee chair in establishing meeting agendas.

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

          Role of the Independent Advisor

          The Compensation and Benefits Committee is also assisted in fulfilling its responsibilities by its independent advisor, Towers Perrin. Towers Perrin is engaged by, and reports directly to, the Compensation and Benefits Committee. Towers Perrin reviews all materials prepared for the Compensation and Benefits Committee by management, prepares additional materials as may be requested by the Compensation and Benefits Committee, and attends all Compensation and Benefits Committee meetings. In its advisory role, among other things, Towers Perrin assists the Compensation and Benefits Committee in the design and implementation of BD’s compensation program. This includes assisting the Compensation and Benefits Committee in selecting the key elements to include in the program, the targeted payments for each element, and the establishment of performance targets. Towers Perrin also makes recommendations to the Compensation and Benefits Committee regarding the compensation of BD’s Chief Executive Officer.

          Towers Perrin also conducts an annual review of the compensation practices of select peer companies. Based on this review, Towers Perrin advises the Compensation and Benefits Committee with respect to the competitiveness of BD’s compensation program in comparison to industry practices, and identifies any trends in executive compensation. During fiscal year 2009, Towers Perrin was not engaged to perform any services for BD. The Compensation and Benefits Committee has adopted a policy prohibiting Towers Perrin from providing any services to BD without the Compensation and Benefits Committee’s prior approval, and has expressed its intention that such approval will be given only in exceptional cases.

          Setting Compensation

          At the end of each fiscal year, the Board conducts a review of the Chief Executive Officer’s performance. As part of this process, the Chief Executive Officer provides a self-assessment report. At the following Board meeting, the Board sets the compensation of the Chief Executive Officer, after considering its assessment of the Chief Executive Officer’s performance, market comparison data and the recommendations of the Compensation and Benefits Committee. This determination is made in executive session, in consultation with Towers Perrin. 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 and Benefits Committee is responsible for determining the compensation of BD’s other executive officers. The Chief Executive Officer, in consultation with the Senior Vice President — Human Resources, reviews the performance of the other executive officers with the Compensation and Benefits Committee and presents compensation recommendations for its consideration. The Compensation and Benefits Committee determines the compensation for these executives, in consultation with Towers Perrin, after considering the Chief Executive Officer’s recommendations, market comparison data regarding compensation levels among peer companies and the views of Towers Perrin. 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 Corporate Governance and Nominating Committee, which is discussed below.

 

CORPORATE AND SCIENTIFIC AFFAIRS COMMITTEE

Function

	•		Oversees BD’s policies, practices and procedures impacting BD’s image and reputation and its standing as a responsible corporate citizen, including, without limitation, issues relating to communications with BD’s key stakeholders; employment practices; community relations; environmental, health and safety matters; customer relations; ethics and enterprise compliance; and political contributions.
	•		Oversees BD’s research and development activities.

		Members		Alfred Sommer — Chair
				Henry P. Becton, Jr.
				Claire M. Fraser-Liggett
				Adel A.F. Mahmoud
				Gary A. Mecklenburg
				Cathy E. Minehan

 

CORPORATE GOVERNANCE AND NOMINATING COMMITTEE

          Function

	•		Identifies and recommends candidates for election as directors to the Board.
	•		Reviews the composition, organization, structure and function of the Board and its Committees, as well as the performance and compensation of non-management directors.
	•		Monitors BD’s corporate governance and Board practices, and oversees the Board’s self-evaluation process.

		Members		Henry P. Becton, Jr. — Chair
				Edward F. DeGraan
				Claire M. Fraser-Liggett
				Adel A.F. Mahmoud
				Willard J. Overlock, Jr.
				Alfred Sommer

          The Board has determined that each member of the Corporate Governance and Nominating Committee meets the independence requirements of the NYSE. The Corporate Governance and Nominating Committee also 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, individual director or member of management. The Corporate Governance and Nominating Committee has retained Towers Perrin as an independent advisor for this purpose. Towers Perrin’s responsibilities include providing assistance in developing an appropriate non-management director compensation peer group; generating market comparison data on the elements and levels of non-management director

compensation at peer companies; tracking trends in non-management director compensation practices; and advising the Corporate Governance and Nominating 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 2009:

Board			8
Audit Committee			12
Compensation and Benefits Committee			7
Corporate and Scientific Affairs Committee			5
Corporate Governance and Nominating Committee			7

          The Executive Committee did not meet during fiscal year 2009.

          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 2009. BD’s Board held six regular meetings during fiscal year 2009, and BD’s non-management directors met in executive session at each of these regular meetings.

          The Board has adopted a policy pursuant to which directors are expected to attend the Annual Meeting in the absence of a scheduling conflict or other valid reason. All but one of the directors then in office attended BD’s 2009 Annual Meeting.

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-based compensation, and Committee chair fees. Of the base compensation paid to the non-management directors (not including Committee chair fees), approximately two-thirds currently is equity-based compensation that directors will be required to retain until they complete their service on the Board. See “Corporate Governance—Significant Governance Practices—Equity Ownership by Directors” on page 15. This retention feature serves to better align the interests of the directors and BD shareholders and ensure compliance with the director share ownership guidelines discussed below. Following a review of non-management directors’ compensation, the Corporate Governance and Nominating Committee did not recommend any changes for the period commencing following the 2010 Annual Meeting. Mr. Ludwig does not receive compensation related to his service as a director. Mr. Considine did not receive compensation related to his service as a director during the period he served as such in fiscal years 2008-09.

Cash Retainer

          Each non-management director currently receives an annual cash retainer of $75,000 for services as a director.

Equity-Based Compensation

          Each non-management director elected at, or continuing as a director after, an Annual Meeting is granted restricted stock units, then valued at $150,000. Newly-elected directors receive a grant pro rated from the effective date of their election to the next Annual Meeting. The restricted stock units are valued using the same methodology used for the most recent annual grant of time-vested restricted stock units to BD’s executive officers. As a result, the value assigned to them by the Board may differ from the value utilized for financial reporting purposes. The shares of BD common stock underlying the restricted stock units are not issuable until a director’s separation from the Board.

Committee Chair Fees

          An annual fee of $6,500 is paid to each Committee chair, except that the fee for the Audit Committee chair is $10,000 in recognition of the Audit Committee’s responsibilities. An annual feel of $10,000 is paid to the Lead Director. Directors do not receive meeting fees.

Other Arrangements

          BD reimburses non-management directors for travel and other business expenses incurred in the performance of their services for BD. Directors may travel on BD aircraft in connection with such activities, and, on limited occasions, spouses of directors have joined them on such flights. No compensation is attributed to the director since the aggregate incremental costs are minimal. In the event directors utilize other private aircraft, they are reimbursed for the incremental cost thereof. Directors

are also reimbursed for attending director education courses. BD occasionally invites spouses of directors to Board-related business events, for which they are reimbursed their travel expenses.

          Directors are eligible, on the same basis as BD employees, to participate in BD’s Matching Gift Program, pursuant to which BD matches contributions made by a director or employee to qualifying nonprofit organizations. The annual aggregate limit was $5,000 in calendar year 2009.

          The following table sets forth the compensation received by the non-management directors during fiscal year 2009.

Fiscal Year 2009 Non-Management Directors’ Compensation

		Fees earned
		or				Stock				Option				All Other
Name		paid in cash(1)				Awards(2)				Awards (2)				Compensation(3)				Total
Basil L. Anderson		$	83,333			$	141,796			$	3,121			$	0			$	228,250
Henry P. Becton, Jr.			89,833				204,310				3,121				3,295				300,559
Edward F. DeGraan			79,833				204,310				3,121				2,500				289,764
Claire M. Fraser-Liggett			73,333				162,375				—				0				235,708
Marshall O. Larsen			73,333				141,796				—				0				215,129
Adel A.F. Mahmoud			73,333				204,310				—				0				277,643
Gary A. Mecklenburg			73,333				141,796				3,121				10,000				228,250
Cathy E. Minehan			73,333				141,796				—				0				215,129
James F. Orr			73,333				204,310				3,121				0				280,764
Willard J. Overlock, Jr.			73,333				185,756				3,121				5,000				267,210
Bertram L. Scott			73,333				185,756				3,121				0				262,210
Alfred Sommer			79,833				141,796				3,121				4,500				229,250

						Stock Awards				Option Awards
						Outstanding at				Outstanding at
		Stock				September 30,				September 30,
Name		Awards				2009				2009
Basil L. Anderson		$	147,821				8,542				2,160
Henry P. Becton, Jr.			147,821				9,843				14,539
Edward F. DeGraan			147,821				9,843				4,436
Claire M. Fraser-Liggett			147,821				5,282				0
Marshall O. Larsen			147,821				3,653				0
Adel A.F. Mahmoud			147,821				5,282				0
Gary A. Mecklenburg			147,821				8,542				2,160
Cathy E. Minehan			147,821				3,653				0
James F. Orr			147,821				9,843				4,436
Willard J. Overlock, Jr.			147,821				9,843				14,539
Bertram L. Scott			147,821				9,843				7,217
Alfred Sommer			147,821				9,843				6,497

Directors’ Deferral Plan

          Directors may defer receipt of, in an unfunded cash account or a BD common stock account, 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 units upon leaving the Board. A general description of the 1996 Directors’ Deferral Plan appears on page 57.

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:

	•		by mail, addressed to BD Lead Director, P.O. Box 264, Franklin Lakes, New Jersey 07417-0264;
	•		by calling the BD Ethics Help Line, an independent toll-free service, at 1-800-821-5452 (available seven days a week, 24 hours a day; callers from outside North America should use “AT&T Direct” to reach AT&T in the U.S. and then dial the above toll-free number); or
	•		by email to ethics_office@bd.com.

          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 as are unrelated to a director’s duties and responsibilities as a Board member may be excluded by the Director of Corporate Security, including, without limitation, solicitations and advertisements; junk mail; product-related communications; job referral materials such as resumes; surveys; and material that is determined to be illegal or otherwise inappropriate. The director(s) to whom such information is addressed is informed that the information has been removed, and that it will be made available to such director(s) upon request.

CORPORATE GOVERNANCE

Corporate Governance Principles

          BD’s commitment to good corporate governance is embodied in its Corporate Governance Principles (the “Principles”). The Principles, originally adopted in 2001, set forth the Board’s views and practices regarding a number of governance topics, and the Corporate Governance and Nominating Committee regularly assesses BD’s corporate governance practices in light of emerging practices. The Principles cover a wide array of subject areas, including voting for directors; the designation of a Lead Director to represent non-management directors; relationships between directors and BD; annual evaluations of the Chief Executive Officer, the Board, its Committees, and (when they stand for re-election) individual directors; conflicts of interest; and charitable contributions to entities affiliated with BD’s executive officers and directors, each of which is discussed below, along with other significant governance practices.

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

          As more fully discussed on page 5, we recently amended our Restated Certificate of Incorporation to provide for the annual election of directors.

Recovery of Compensation

          The Board has adopted a policy that enables BD to recover incentive compensation paid to a Leadership Team member based on BD’s financial results if such results are later restated as a result of such member’s misconduct, including, but not limited to, fraud or knowing illegal conduct. This policy also grants the Board the ability to recover from members of the Leadership Team who were not involved in such misconduct the amount by which any incentive compensation payout exceeded the amount they would have been paid based on the restated results. BD’s compensation recovery policy is available on BD’s website at www.bd.com/investors/corporate_governance/.

Equity Grant Dating

          During fiscal year 2006, BD reviewed its established equity-granting practices and confirmed that no option backdating had occurred, and that its practices regarding the issuance of equity grants effectively guard against the backdating of awards. In September 2006, the Compensation and Benefits Committee adopted a comprehensive policy that incorporated BD’s existing practices and added a provision intended to ensure that the timing of public announcements does not affect the valuation of an equity grant. BD’s equity grant dating policy is available on BD’s website at www.bd.com/investors/corporate_governance/.

Voting for Directors

          The Board has adopted a Principle that provides that any nominee in an uncontested election who receives more votes “withheld” from his or her election than votes “for” his or her election must offer to submit his or her resignation following the shareholder vote (the “Director Resignation Policy”). The Board believes this structure allows BD to maintain a stable Board of experienced and knowledgeable directors while evaluating an appropriate response to shareholder dissatisfaction. Consideration of all relevant factors on a case-by-case basis pursuant to the Director Resignation Policy gives the Board flexibility and enables it to avoid undesirable and disruptive governance consequences. The Corporate Governance and Nominating Committee will consider and recommend to the Board whether to accept the resignation offer. The other independent directors will decide the action to take with respect to the offer of resignation within 90 days following the shareholder vote. The Board’s decision will be disclosed in a report on a Form 8-K filed by BD with the SEC within four business days following the decision. Any director who offers to submit his or her resignation pursuant to this provision will not participate in the deliberations of either the Corporate Governance and Nominating Committee or the Board. The complete terms of this policy are included in the Principles.

Annual Report of Charitable Contributions

          In furtherance of BD’s commitment to good governance and disclosure practices, 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 affiliated with BD’s directors, executive officers, and their families must be approved by the Corporate Governance and Nominating Committee. BD posts on its website, at www.bd.com/investors/corporate_governance/, an Annual Report of Charitable Contributions (the “Contributions Report”) listing all such contributions and pledges made by BD 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.

Enterprise Compliance

          Under the oversight of the Corporate and Scientific Affairs Committee, BD’s enterprise compliance function is aimed at ensuring that BD is effective at preventing and detecting violations of the many laws, regulations and policies affecting its business (“Enterprise Compliance”), and that BD continuously encourages lawful and ethical conduct. Launched in fiscal year 2005, Enterprise Compliance supplements the various compliance and ethics functions that were already in place at BD, and seeks to ensure better coordination and effectiveness through program design, prevention, and promotion of an organizational culture of compliance. A Compliance Committee comprised of members of senior management oversees the activities of the Chief Ethics and Compliance Officer. Another key element of this program is training. Courses offered include a global computer-based compliance training program focused on BD’s Business Conduct and Compliance Guide, as well as other courses covering various compliance topics such as antitrust, anti-bribery, conflicts of interest, financial integrity, industry marketing codes and information security.

          In order to align BD’s risk and compliance activities currently overseen by the Corporate and Scientific Affairs Committee (including Enterprise Compliance) with the Audit Committee’s oversight of Enterprise Risk Management discussed below, the Board is considering consolidating in the Audit Committee these oversight responsibilities. Oversight of other aspects of certain of these activities would be transferred from the Corporate and Scientific Affairs Committee to the Board.

Enterprise Risk Management

          Enterprise Risk Management (“ERM”) is a company-wide initiative that involves the Board, management and BD associates in an integrated effort to identify, assess and manage risks that may affect BD’s ability to execute on its corporate strategy and fulfill its business objectives. BD’s ERM activities entail the identification, prioritization and assessment of a broad range of risks (e.g., financial, operational, business, reputational, governance and managerial), and the formulation of plans to mitigate their effects.

Equity Ownership by Directors

          The Board believes that directors should hold meaningful equity ownership positions in BD. To that end, the compensation structure for non-management directors was changed during fiscal year 2006 to eliminate stock options and issue in their place restricted stock units that would not be distributable until a director completes his or her service on the Board. The accumulation of these equity interests will help to better align the interests of the non-management directors with shareholders. Under the Board’s share ownership guidelines, each non-management director is required to own shares of common stock (which includes restricted stock units) valued at 50% of the amount obtained by multiplying the annual cash retainer by the number of years the director has served. Each non-management director who has served for at least one full year currently owns shares in an amount sufficient to comply with these guidelines.

Lead Director

          The Principles provide for a Lead Director whenever the Chairman is not an independent director. The Lead Director presides over executive sessions of the non-management directors; together with the Chair of the Compensation and Benefits Committee, coordinates the evaluation of the Chief Executive Officer by the non-management directors; helps set Board agendas and meeting schedules; and serves as a liaison between the non-management directors and the Chief Executive Officer. The Lead Director also serves as a contact person to facilitate communications between BD’s employees, shareholders and other constituents and the non-management directors. The Corporate Governance and Nominating Committee annually reviews the designation of the Lead Director. BD’s current Lead Director is Henry P. Becton, Jr.

Director Independence/Certain Relationships and Related Transactions

          Under the NYSE rules and the Principles, a director is deemed not to be independent if the director has a direct or indirect material relationship with BD (other than his or her relationship as a director). The Corporate Governance and Nominating Committee annually reviews the independence of all directors and 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 Principle No. 7. The Independence Guidelines set forth certain types of relationships between BD and directors and their immediate family members, or entities with which they are affiliated, that the Board, in its judgment, has deemed to be either material or immaterial for purposes of assessing a director’s independence. In the event a director has any relationship with BD that is not addressed in the Independence Guidelines, the independent members of the Board review the facts and circumstances to determine whether such relationship is material.

          The Board has determined that the following directors are independent under the Independence Guidelines: Basil L. Anderson, Henry P. Becton, Jr., Edward F. DeGraan, Claire M. Fraser-Liggett, Marshall O. Larsen, Adel A.F. Mahmoud, Gary A. Mecklenburg, Cathy E. Minehan, James F. Orr, Willard J. Overlock, Jr., Bertram L. Scott and Alfred Sommer. Edward J. Ludwig is an employee of BD, and, therefore, is not independent under the NYSE rules and the Principles. During the portion of fiscal year 2009 that John R. Considine served as a director, he also was not independent under the NYSE rules and the Principles because he was an employee of BD.

          In determining that each of the non-management directors is independent, the Board considered that, at various times over the previous three years, BD entered into transactions or had other dealings in the ordinary course of business with organizations with which certain directors or their immediate family members are, or were during such three-year period, affiliated (referred to as a “director-affiliated organization”). Such affiliations included service by the director or an immediate family member as an officer, employee, adjunct faculty member or governing or advisory board member of such organizations.

          In conducting its review, the Board determined that, in each instance, the amount paid to, or received from, the director-affiliated organization was below the levels that would impair a director’s independence under the Independence Guidelines. In addition, in most instances, the director played no active role in the director-affiliated organization’s relationship with BD, and, in some instances, the relationship involved a unit of such organization other than the one with which the

director has been 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 in this respect consisted of payments related to the purchase or sale of products and/or services, the licensing of intellectual property rights or other activities (in the cases of Messrs. Anderson, Becton, Larsen, Mecklenburg, Overlock and Scott, Drs. Fraser-Liggett, Mahmoud and Sommer, and Ms. Minehan) and charitable contributions (in the cases of Mr. Overlock and Drs. Fraser-Liggett and Sommer).

          This independence review is one of several established policies and procedures through which the Board (through the Corporate Governance and Nominating Committee) may review transactions and relationships between BD and its directors, executive officers, or their family members, and organizations with which they are affiliated. In November 2006, the Board supplemented these policies and procedures with a new written policy (the “Policy”) covering related person transactions involving more than $120,000 per year where 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, regardless of whether the transaction impacts a director’s independence. The Policy is available on BD’s website at www.bd.com/investors/corporate_governance/. The Policy excludes specified transactions including certain charitable contributions, transactions available to employees generally, and indemnification and advancement of certain expenses. The Corporate Governance and Nominating Committee is responsible for the review and approval or ratification of transactions subject to the Policy. The Corporate Governance and Nominating Committee will approve or ratify only those transactions that it determines in its business judgment are fair and reasonable to BD and in (or not inconsistent with) the best interests of BD and its stockholders, and do not impact the director’s independence when relevant. With the exception of BD’s relationship with Goldman, Sachs & Co. and affiliated entities discussed below, none of the transactions reviewed in connection with the independence of the non-management directors that occurred during fiscal year 2009 were subject to approval or ratification under the Policy because the $120,000 threshold was not exceeded and/or the interest of the director was not material.

          The Committee considered under the Policy the fact that Cathy E. Minehan’s husband holds a senior management position as a managing director at Goldman, Sachs & Co. (“Goldman Sachs”), which, together with affiliated entities (collectively “Goldman Sachs”), has provided investment banking and certain financial services to BD. BD’s relationship with Goldman Sachs predated Ms. Minehan’s election to the Board, and her husband has played no role in the transactions between Goldman Sachs and BD. Based upon its review, the Committee approved the provision of such services by Goldman Sachs to BD, for which BD paid a total of approximately $3.3 million during fiscal year 2009, which was far below the level that would have impaired Ms. Minehan’s independence.

          BD also engaged several shareholders (or their affiliated operating units) holding 5% or more of BD common stock during fiscal year 2009 for various financial services for which BD paid fees in excess of $120,000. Fees paid were as follows: Barclays Global Investors, NA: $868,000 (banking services and investment management of various pension plan and Savings Incentive Plan funds); and State Street Bank and Trust Company, Trustee: $568,000 (banking services and investment management of various Savings Incentive Plan funds). These transactions are not required to be approved under the Policy since these entities are considered passive investors in BD.

Board Evaluation

          Each year the Board evaluates its performance and effectiveness. As part of this process, each director completes a Board Evaluation Form to provide feedback on specific aspects of the Board’s role, organization and meetings. The collective ratings and comments are then presented by the Chair of the Corporate Governance and Nominating Committee to the full Board. As part of the evaluation, the Board assesses the progress in the areas targeted for improvement a year earlier, and develops recommendations 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 at www.bd.com/investors/corporate_governance). Additionally, each Board Committee conducts an annual self-evaluation of its performance through a similar process.

Director Nomination Process

          The Corporate Governance and Nominating Committee reviews the skills, characteristics and experience of potential candidates for election to the Board and recommends nominees for director to the full Board for approval. The assessment of the overall composition of the Board encompasses considerations of diversity, age, skills, international background, and significant experience and prominence in areas of importance to BD.

          It is the Corporate Governance and Nominating Committee’s policy to consider referrals of prospective nominees for the Board from other Board members and management, as well as shareholders and other external sources such as retained executive search firms. The Corporate Governance and Nominating Committee utilizes the same criteria for evaluating candidates irrespective of their source.

          To recommend a candidate for consideration, a shareholder should submit a written statement of the qualifications of the proposed nominee, including full name and address, to the Corporate Secretary, BD, 1 Becton Drive, Franklin Lakes, New Jersey 07417-1880.

          The Corporate Governance and Nominating Committee believes that any nominee must meet the following minimum qualifications:

	•		Candidates should be persons of high integrity who possess independence, forthrightness, inquisitiveness, good judgment and strong analytical skills.
	•		Candidates should demonstrate a commitment to devote the time required for Board duties including, but not limited to, attendance at meetings.
	•		Candidates should possess a team-oriented ethic and be committed to the interests of all shareholders as opposed to those of any particular constituency.

          When considering director candidates, the Corporate Governance and Nominating Committee will seek individuals with backgrounds and qualities that, when combined with those of BD’s other directors, provide a blend of skills and experience that will further enhance the Board’s effectiveness. From time-to-time, the Corporate Governance and Nominating Committee has retained an executive search firm to assist it in its efforts to identify and evaluate potential director candidates.

          The Corporate Governance and Nominating Committee assesses the characteristics and performance of incumbent director nominees against the above criteria as well, and, to the extent applicable, considers the impact of any change in the principal occupations of such directors during the last year. Upon completion of the individual director evaluation process, the Corporate Governance and Nominating Committee reports its conclusions and recommendations for nominations to the Board.

Business Conduct and Compliance Guide

          BD maintains a Business Conduct and Compliance Guide (the “Guide”), which was adopted by the Board in 1995. The Guide is a code of conduct and ethics applicable to all directors, officers and employees of BD, including its Chief Executive Officer and its Chief Financial Officer, principal accounting officer and other senior financial officers. It sets forth BD’s policies and expectations on a number of topics, including conflicts of interest, confidentiality, compliance with laws (including insider trading laws), preservation and use of BD’s assets, and business ethics. The Guide also sets forth procedures for the communicating and handling of any potential conflict of interest (or the appearance of any conflict of interest) involving directors or executive officers, and for the confidential communication and handling of issues regarding accounting, internal controls and auditing matters.

          Since 1995, BD has also maintained an Ethics Help Line telephone number (the “Help Line”) for BD associates as a means of raising concerns or seeking advice. The Help Line is serviced by an independent contractor and is available to all associates worldwide, 7 days a week, 24 hours a day. Translation services are also available to associates. Associates using the Help Line may choose to remain anonymous and all inquiries are kept confidential to the extent practicable in connection with investigation of an inquiry. All Help Line inquiries are forwarded to BD’s Chief Ethics and Compliance Officer for investigation. Any matters reported to the Chief Ethics and Compliance Officer, whether through the Help Line or otherwise, involving accounting, internal control or audit matters, or any fraud involving management or persons who have a significant role in BD’s internal controls, are reported directly to the Audit Committee.

          The Chief Ethics and Compliance Officer leads the BD Ethics Office, a unit within BD that 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 Guide and its requirements, and ethics training sessions. BD’s Core Values are:

	—		We do what is right
	—		We always seek to improve
	—		We accept personal responsibility
	—		We treat each other with respect

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

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

COMPENSATION DISCUSSION AND ANALYSIS

     The following is a discussion of our executive compensation program and compensation decisions made with respect to Edward J. Ludwig, our Chief Executive Officer (referred to as our “CEO”), and the other executive officers named in the Summary Compensation Table on page 35. We refer to our CEO and these other executive officers as the “named executive officers.”

     The following discussion includes statements regarding 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 evaluate these targets in any other context.

     All references to years are references to BD’s fiscal year, which ends on September 30, unless otherwise noted.

Executive Summary

Overview of 2009 operating performance

     2009 was a challenging year for most of our industry and for BD as well. As is more fully described in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our 2009 Annual Report on Form 10-K, the global recession weakened the growth in demand for our products, and the significant strengthening of the U.S. dollar against other world currencies adversely affected our reported results. Despite this very difficult environment, BD delivered strong operating performance in 2009. Highlights of BD’s performance include:

	•		Revenues — Despite adverse changes in foreign currency exchange rates and weakened customer demand, we were able to increase our reported revenues 1% from 2008 (which reflects a 4% unfavorable impact from foreign currency translation).
	•		Earnings per share — Through productivity improvements and disciplined expense management, our reported diluted earnings per share from continuing operations increased 11%.
	•		Cash Flow — We generated about $1.7 billion of net cash flow from operations, and returned about $867 million to our shareholders through dividends and share repurchases.
	•		R&D — Despite the economic challenges BD faced, we continued to invest in research and development to position BD for long-term growth.

     While BD delivered strong operating performance during 2009, we expect the challenging economic environment to continue in 2010. In response, management has, among other things, put in place company-wide cost control measures. It was within the context of our 2009 performance and our outlook for 2010 that the Compensation and Benefits Committee (the “Compensation Committee”) reviewed its compensation decisions and made certain changes to our program for 2010, as discussed in more detail in this Compensation Discussion and Analysis.

Effect of 2009 performance on compensation

     Our adjusted diluted earnings per share from continuing operations for 2009 exceeded the target goal set under our Performance Incentive Plan (“PIP”), our annual cash incentive award plan. In recognition of BD management’s efforts to maintain BD’s profitability in 2009 in spite of the challenging economic environment, the Compensation Committee made a PIP award to our CEO of 117% of his target award and the PIP awards to our other named executive officers set forth on page 27. The efforts of our named executive officers were also rewarded through the equity-based compensation awards discussed later in this Compensation Discussion and Analysis.

     At the same time, the lower revenue growth BD experienced in 2009 contributed to a below-target payout of the Performance Units covering the 2007-2009 performance cycle. These Performance Units paid out at 77% of the share target.

     In sum, we believe the elements of our program designed to link pay to performance and align the interests of our executives and BD’s shareholders worked as intended. The success of our executives in maintaining BD’s profitability in 2009 resulted in the PIP and equity awards described above. Conversely, the below-target revenue results over the three-year performance cycle ending with 2009 resulted in below-target Performance Unit payouts. In addition, equity compensation awards aligned the interests of our named executive officers with our shareholders, as the decline in our stock price from September 2008 lowered the value of our executives’ unvested awards and long-term holdings.

Actions taken with respect to 2010 compensation

     The Compensation Committee reviewed our compensation program in light of the current economic climate and our company-wide cost control efforts, and also considered ways in which to increase the link between pay and performance. As part of this review, consideration was given to the continued need to attract and retain executives to lead BD’s future growth, and the importance of maintaining a degree of consistency in our compensation practices. As a result of this review, the following actions were taken for 2010:

     Base Salaries

•

Salaries for our named executive officers for calendar year 2010 have been frozen at calendar year 2009 levels.

     Changes to Performance Incentive Plan

	•		We added a revenue target with a 25% weighting to the existing earnings per share target to determine funding available for awards under our PIP.
	•		The threshold performance needed for the funding of PIP awards to the named executive officers was raised from 80% to 90% of target performance.
	•		Performance at target will only result in funding at 60% of the individual target awards set for our named executive officers and other executive officers, subject to the Compensation Committee’s discretion to make adjustments, upward or downward, based on individual performance.

     Changes to equity compensation

	•		Equity-based compensation awards to our executive officers will consist solely of stock appreciation rights (“SARs”) and Performance Units in order to increase the portion of their compensation that is performance-based.
	•		The revenue target for Performance Units awarded in November 2009 was set at 7%, compared to 8.5% for the prior year’s grant, while the return on invested capital target was raised from 31% to 32%. The change to the revenue growth target more appropriately reflects the growth trends in the segments in which we operate.

     The Compensation Committee believes that these actions are responsive to current economic conditions and are consistent with the objectives of both our executive compensation program and our cost-control efforts. The Compensation Committee will continue to monitor our program to ensure that it is consistent with BD’s objectives, provides appropriate incentives to management and remains competitive with our industry.

Objectives of our executive compensation program

     An understanding of our executive compensation program begins with the objectives the program is intended to serve. These include:

     Offering competitive compensation. We seek to offer a compensation package that is competitive with the compensation offered by peer companies and helps us attract and retain our executives.

     Linking rewards to performance. We seek to implement a pay-for-performance philosophy by tying a significant portion of executive compensation to the achievement of financial and other goals of BD and an executive’s contributions to the achievement of those goals.

     Aligning the interests of our executives and shareholders. We seek to align the interests of our executives with those of our shareholders through equity-based compensation and share ownership guidelines.

The process for setting executive compensation

The role of the Compensation and Benefits 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, Towers Perrin, and BD’s senior management. Additional information about our process for setting executive compensation, including the role of Towers Perrin and management, may be found on pages 9-10.

     The Compensation Committee has established a policy whereby BD will not engage Towers Perrin to perform any services. In accordance with this policy, BD did not engage Towers Perrin to perform any services in 2009. From time-to-

time, BD purchases general “off-the-shelf” salary surveys published by Towers Perrin for certain countries outside the U.S., for which BD paid approximately $10,000 in 2009. The Compensation Committee does not believe that the purchase of these surveys is inconsistent with its policy or impairs the independence of Towers Perrin in any way.

The use of market comparison data

     The Compensation Committee uses information on the compensation practices of select peer companies in setting executive compensation. This review is done with respect to both the structure of our program and target compensation levels.

     The peer group used by the Compensation Committee consists of the publicly-traded healthcare companies listed below. This group is referred to as the “Comparison Group.” These companies were chosen by the Compensation Committee after considering the recommendations of Towers Perrin and management. The companies in this group were selected because they have significant lines of business that are similar to BD’s. The Compensation Committee believes that reference to the Comparison Group is appropriate when reviewing BD’s compensation program because it believes we compete with these companies for executive talent. Information on the pay practices of the Comparison Group is provided by Towers Perrin to the extent such information is available.

Agilent Technologies, Inc.		Hospira, Inc.
Alcon, Inc.		Medtronic, Inc.
Allergan, Inc.		PerkinElmer, Inc.
C.R. Bard, Inc.		St. Jude Medical, Inc.
Baxter International Inc.		Stryker Corporation
Beckman Coulter, Inc.		Thermo Fisher Scientific Inc.
Boston Scientific Corporation		Zimmer Holdings, Inc.
Covidien, Ltd.

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

		Revenue (in millions)				Market Capitalization
		Twelve months ended				on September 30, 2009
		September 30, 2009				(in millions)
25th Percentile		$	3,826			$	8,638
Median		$	4,795			$	15,962
75th Percentile		$	9,043			$	19,888
BD		$	7,161			$	16,536
Percentile Rank			67%				53%

     Towers Perrin conducts an annual comparison of our executive compensation structure and practices to those of the Comparison Group. Based on its review in 2009, Towers Perrin concluded that the structure of BD’s compensation program is competitive with industry practices and consistent with the program objectives described above.

     Market comparison data is also used in setting target compensation levels for each of the key elements of our program (salary, annual cash incentive award and equity compensation) and for the combined total of these elements. The Compensation Committee seeks to determine, for each key element, the prevailing competitive range of target compensation among the Comparison Group based on publicly-available information, with the intent that the mid-point of the range be the 50th percentile of the Comparison Group. The Compensation Committee then seeks to target each key element of compensation within this competitive range, assuming payout of performance-based compensation at target. An executive’s actual compensation may be more or less than the target amount set by the Compensation Committee based on the individual’s and BD’s performance, changes in our stock price and other factors.

     Setting compensation targets based on market comparison data is intended to ensure that our compensation practices remain competitive. Because each compensation element is targeted to be within a competitive range, compensation decisions made with respect to one element of compensation 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 of overall target compensation. In addition, because a named executive officer’s compensation target is set by reference to persons with similar duties at these other companies, the Compensation Committee does not establish any fixed relationship between the compensation of the CEO and that of any other named executive officer.

The use of “tally sheets”

     From time-to-time, the Compensation Committee reviews a summary report, or “tally sheet,” prepared by management for each named executive officer. The tally sheet includes:

	•		total annual compensation, including salary, PIP award, equity-based compensation, perquisites, pension benefit accruals and other compensation;
	•		current holdings of BD common stock, and the total value of unexercised or unvested equity compensation awards;
	•		total accrued benefits under BD’s pension, savings and deferred compensation plans; and
	•		amounts payable upon termination of employment under various circumstances, including retirement or a change of control.

     The Compensation Committee uses tally sheets to estimate the total annual compensation of the named executive officers, provide perspective on the wealth they have accumulated under our program in terms of prior equity grants and plan accruals, review the retentive value of plan benefits and prior equity 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.

     While the Compensation Committee considers the “wealth accumulation” of our executives, this did not affect the Compensation Committee’s compensation decisions for 2009. This reflects the Compensation Committee’s view that, consistent with the goals of our program, compensation decisions should be based primarily on the executive’s performance and the market value of his services, and post-retirement benefits should properly reflect years of service. In this regard, the Compensation Committee is mindful that reducing an executive’s compensation based on the value of past compensation or accrued benefits could weaken the competitiveness of our compensation program and make it more difficult to attract and retain executive talent. Reducing an executive’s compensation based on the value of prior equity awards, which is dependent on the creation of shareholder value, could also unfairly penalize the executive for our past performance. Moreover, the value of previously-granted equity awards is subject to fluctuation based on market conditions and may not be a true indication of the value the executive will realize.

The structure of our compensation program

The key elements of our program

     For 2009, the key elements of our executive compensation program were base salary, an annual cash incentive award under our PIP and long-term equity-based compensation. These elements are summarized in the table below:

Component		Description		Purpose
Base Salary		Fixed cash compensation based on the executive’s performance, scope of responsibilities and experience, and competitive pay practices.		Provide a fixed, baseline level of compensation that is not contingent upon performance.
Annual incentive award		Cash payment tied to performance during the fiscal year.		Reward BD’s achieving or exceeding annual performance objectives and individual contributions to BD’s performance.
Long-Term Equity Compensation:
•     Stock Appreciation       Rights (“SARs”)		Right to receive, upon exercise, shares equal in value to the difference between exercise price and current market price.
•     Performance Units		Performance-based restricted stock units. Amount of payout is tied to BD’s performance over three-year performance period.		Increase executive ownership, promote executive retention, align compensation with the achievement of long-term performance objectives and reward the creation of shareholder value.
•     Time-Vested Units       (“TVUs”)		Restricted stock unit that vests three years after grant (as discussed later, TVUs will be phased out in 2010).

     The Compensation Committee chose this combination of cash and equity compensation to further the objectives of our executive compensation program. Based on prevailing market practices, the Committee believes it needs to provide a mix of salary, annual cash incentive and equity compensation awards in order to provide a competitive compensation package. In addition, the Committee seeks to promote our pay-for-performance philosophy by making a significant portion of target compensation “at-risk.” The Compensation Committee believes it accomplishes this goal by linking pay levels to both our short-term performance (through PIP awards) and long-term performance (through Performance Units and SARs). Finally, a significant portion of total compensation is provided through equity compensation awards that align the interests of the named executive officers with our shareholders and promote executive retention.

Our pay-for-performance approach

     No specific formula is used to determine the allocation between performance-based and fixed compensation. However, BD’s emphasis on pay-for-performance resulted in performance-based compensation representing a significant portion of total target compensation in 2009, ranging from 61% to 70% of total target compensation of our named executive officers (excluding Mr. Elkins).

     The table below shows the portion of total target compensation (salary, PIP awards and equity compensation) that consisted of performance-based compensation (PIP awards, Performance Units and SARs) for the officers listed. The table is based on PIP award targets and the SFAS No. 123(R) value of their equity compensation awards used for financial reporting (which assumes Performance Units pay out at target). Because this table is based on target amounts and involves equity compensation, actual amounts received (and the percentage of total compensation coming from performance-based compensation) may differ based on performance and BD’s stock price. Our Chief Financial Officer, David V. Elkins, who joined BD on

December 1, 2008, is not included in the table below, since he did not receive any SARs or Performance Units during 2009, and he was guaranteed a minimum PIP award for 2009 as part of his committee-approved initial compensation plan, which is described in detail under “Other Compensation Actions” on page 29. Other than as described in that section, beginning in 2010, Mr. Elkins’ compensation will include the same performance elements as the other named executive officers.

Fiscal Year 2009

																		Performance-
																		Based
																		Compensation
																		as Percentage
		FY 2009				FY 2009				Total Target								of
		Target PIP				Performance Unit/				Performance-Based				Total Target				Total Target
Name		Award				SAR Awards				Compensation				Compensation				Compensation
Edward J. Ludwig		$	1,284,000			$	3,552,057			$	4,836,057			$	6,882,120				70	%
John R. Considine			519,704				1,028,541				1,548,245				2,523,809				61	%
Vincent A. Forlenza			529,158				1,235,504				1,764,662				2,726,700				65	%
William A. Kozy			397,008				855,571				1,252,579				2,054,858				61	%

     As is discussed later in this Compensation Discussion and Analysis, beginning in 2010, equity compensation awards to our executive officers will consist solely of SARs and Performance Units. This will increase the amount of total target compensation that is performance-based.

Our risk analysis of performance-based compensation

          While a significant portion of our executive compensation plan is performance-based, we do not believe that our program encourages excessive or unnecessary risk-taking. While risk-taking is a necessary part of growing a business, the Compensation Committee has focused on aligning BD’s compensation policies with the long-term interests of BD and avoiding short-term rewards for management decisions that could pose long-term risks to BD, as follows:

	•		Limits on PIP awards. The compensation of our named executive officers is not overly-weighted toward short-term incentives. For instance, our CEO’s target PIP award in 2009 was about 19% of his total target compensation. Moreover, PIP awards are capped at 200% of an executive’s target award to protect against disproportionately large short-term incentives, and the Compensation Committee has broad discretion in determining the size of PIP awards based on those factors it deems appropriate, including whether an executive has caused BD to incur unnecessary or excessive risk.
	•		Share Ownership Guidelines. Our share ownership guidelines require the named executive officers to hold a certain amount of BD stock. This ensures that each executive will have a significant amount of personal wealth tied to long-term holdings in BD stock.
	•		Use of Long-Term Incentive Compensation. The largest percentage of total target compensation is equity-based long-term incentive compensation that vests over a period of years. This vesting period encourages our executives to focus on sustaining BD’s long-term performance. These grants are also made annually, so executives always have unvested awards that could decrease significantly in value if our business is not managed for the long term.
	•		Use of Performance Units. A significant portion of long-term incentive compensation consists of Performance Units. Performance Unit payouts are tied to how BD performs on specific measures over a three-year period, which focuses management on sustaining BD’s long-term performance. These awards also have overlapping performance periods, so any risks taken to increase the payout under one award could jeopardize the potential payouts under other awards. To further ensure that there is not a significant incentive for unnecessary risk-taking, we cap the payout of these awards at 200% of target.
	•		Limit on SARs. SARs have value only if our stock price increases and have no limits on the amount that can be realized from the award. This arguably could encourage executives to take risks intended to result in short-term increases in our stock price. However, this risk is mitigated by limiting the portion of equity compensation, and, therefore, of total target compensation, that consists of SARs. This risk is also mitigated by our share ownership guidelines and by requiring that the named executive officers hold 75% of the net, after-tax shares received on exercise for one year. We also issue SARs along with restricted stock units, the value of which would be at-risk if decisions focused on short-term results hurt BD’s long-term performance.

	•		Performance Metrics. We use a variety of performance metrics (earnings per share, revenue growth and return on invested capital) that we believe correlate to long-term creation of shareholder value and that are affected by management decisions. None of our performance metrics are tied to BD’s stock price.

     In sum, our program is structured so that a considerable amount of wealth of our executives is tied to the long-term health of BD, we avoid the type of disproportionately large short-term incentives that could encourage executives to take risks that may not be in BD’s long-term interests, and we provide incentives to manage for long-term performance. We believe this combination of factors encourages our executives to manage BD in a prudent manner.

How our PIP and equity compensation are administered

PIP

     The PIP provides an opportunity to receive an annual cash incentive award to reward the named executive officers for BD’s performance for the fiscal year and their contribution to that performance. The Compensation Committee believes that the PIP is an important part of our pay-for-performance philosophy and allows us to provide a competitive executive compensation program.

     Target awards. Target annual incentive awards for the named executive officers are set based on job responsibilities. These targets are expressed as a percentage of base salary. PIP award targets for the named executive officers are as follows:

Name		Target Award as % of Salary
Edward J. Ludwig			120	%
David V. Elkins			70	%
John R. Considine			75	%
Vincent A. Forlenza			85	%
William A. Kozy			70	%

     The Compensation Committee increased Mr. Forlenza’s target award from 70% for 2008 to 85% for 2009 in connection with his election as BD’s President.

     Actual PIP awards may range from zero to 200% of the named executive officer’s target award, based on BD’s and the individual’s performance. However, it was agreed with Mr. Elkins that he would receive a minimum PIP award of at least $350,000 for 2009 in connection with his joining BD. The “Grants of Plan-Based Awards in Fiscal Year 2009” table on page 38 shows the range of possible awards under the PIP for 2009.

     Named executive officers are eligible to receive PIP awards, within the range described above, only if BD first meets a baseline performance target established by the Compensation Committee. For 2009, the performance target was based on BD’s net income. Achievement of the baseline performance target results in an allocation of the maximum PIP award that may be paid to a named executive officer (200% of target). The Compensation Committee has the discretion (and has historically exercised this discretion) to reduce the amount of the award based on such factors as the Compensation Committee deems appropriate.

     The factors the Compensation Committee considers when setting PIP awards include the funding available for awards (described below) and the named executive officer’s performance during the year. CEO performance is measured by his progress against the performance goals for the year that are established by the Board. With respect to the other named executive officers, the CEO provides an assessment to the Compensation Committee of how those executive officers performed against the performance objectives relating to 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 performance objective a condition to receiving an award. Instead, the Compensation Committee uses its business judgment to determine the appropriate PIP award to recognize BD’s performance and the executive’s contribution.

     Funding for PIP awards. For associates in our corporate functions, the amount of funding available for PIP awards is based on BD’s overall results, while funding for associates in our business units is based on both BD’s results and the results of that unit. The amount of funding available for PIP awards to the named executive officers is based solely on BD’s results. These awards are made from a pool that is funded based on a formula. The amount of available funding depends on how well BD performs during the year compared to the performance target set by the Compensation Committee. Performance that exceeds our goals for the year results in additional available funds for awards, while performance that falls short of target results in less funding. For 2009, the Compensation Committee set a diluted earnings per share from continuing

operations (referred to as “EPS”) target. EPS is used since it is the primary basis on which we set our performance expectations for the year, and we believe consistent EPS growth leads to long-term shareholder value.

     In applying the funding formula, the Compensation Committee has the discretion to make adjustments when examining BD’s operating results to account for events that occurred during the year. These include, among other things, the effect of acquisitions and divestitures as well as items that are not considered part of our ordinary operations (such as losses or gains on litigation settlements). The Compensation Committee uses its discretion in this manner to ensure that management makes decisions based on what is in the best interest of BD and not the possible effects on its compensation. This discretion is also used to ensure that our executives are not unfairly harmed by, and do not unfairly benefit from, these types of events.

     The following table shows the formula for PIP funding for 2009:

Performance Level		Funding Level
Below 80% of performance target		No funding
At 80% of performance target		50% funding of target awards
Every 1% increase between 80% and 100% of performance target		An additional 2.5% of funding
At 100% of performance target		100% funding of target awards
Every 1% increase above 100% of performance target		An additional 5% of funding (to a maximum of 150%)

     Since individual PIP awards are determined in the discretion of the Compensation Committee, actual PIP awards to the named executive officers, as a percentage of their award targets, may be different than the overall funding percentage under the PIP.

     Change to performance target and funding formula for 2010. The Compensation Committee has made certain changes to the PIP funding formula for 2010. First, a revenue target was added to the existing EPS target. This revenue target will carry a 25% weighting in determining the payout pool, and the EPS target will be weighted 75%. The revenue target will be set based on BD’s business plan for the fiscal year. Revenues will be measured after eliminating the effects of foreign currency translation so that only the impact of improved performance is considered. This change emphasizes BD’s goal of increasing revenue growth.

     Certain other changes were made to the formula. These include raising the threshold performance level required for the funding of PIP awards to the named executive officers from 80% to 90% of target performance. The formula was also temporarily changed, as part of our cost control measures, so that meeting target performance will only result in funding for awards at 60% of target for our named executive officers and other executive officers (although the Compensation Committee retains the discretion to adjust such awards upward or downward based on individual performance). The Compensation Committee intends to revisit this change next year in light of the economic conditions at that time.

Equity-Based Compensation

     An integral part of our compensation program is long-term equity-based compensation. The awards made to the named executive officers in 2009 consisted of SARs, Performance Units and TVUs. A description of each type of award is on page 39.

     Changes to mix of equity-based compensation awards in 2009 and 2010. The Compensation Committee uses a mix of different equity compensation awards to promote the objectives of our program. Performance Units are intended to focus the named executive officers on sustained performance, and can provide value to the executives for the achievement of long-term goals regardless of movements in our stock price. SARs are intended to reward the executives for the creation of shareholder value over the term of the award. Because they are equity-based, Performance Units, SARs and TVUs also align the interests of our executives with our shareholders. Moreover, since they are subject to vesting over a period of years, they help promote executive retention.

     In prior years, we issued restricted stock units to our named executive officers that did not vest until one year after retirement (referred to as “Career Shares”). In 2009, the named executive officers were issued TVUs with a three-year vesting schedule in place of Career Shares. The Compensation Committee made this change after reviewing the compensation practices of the Comparison Group and determining that the use of Career Shares was not in line with prevailing practices. This change also simplified our executive compensation program by making awards granted to our named executive officers the same as those granted to the other members of the BD Leadership Team. TVUs are also assigned a higher value than Career Shares, due to their shorter vesting period. As a result, this change resulted in fewer units being awarded to provide the same award value.

     Beginning with grants made in 2010, equity compensation awards to our named executive officers and other members of senior management will consist solely of SARs and Performance Units. This change was made to increase the link of performance and the creation of shareholder value with executive compensation.

     How awards are determined. The Compensation Committee does not issue a targeted number of SARs or units to the named executive officers. Instead, the Compensation Committee sets an amount, in dollar value, to be granted to each named executive officer, based on market comparison data and individual performance. For grants made in 2009, the named executive officers were granted SARs and Performance Units, each having an estimated value on the date of grant equal to approximately 40% of the total award value, and TVUs for the remaining 20% of the award.

     Prior to the grants in 2009, we valued awards using the BD stock price on the grant date. However, there was a significant decline in the BD stock price during the beginning of 2009. As a result, the Compensation Committee determined that using the grant date stock price to value the 2009 grants would result in awards that, in absolute number, would be notably larger than in prior years.

     Accordingly, the Compensation Committee decided to use an average closing stock price (using the closing BD stock price on the grant date and the last trading day of each of the three preceding months) to estimate the value of the SARs and units granted to our CEO and other executive officers. This resulted in the Compensation Committee using a share price of $74.89 instead of the grant date closing price of $62.50. This change resulted in fewer SARs and units being granted to the named executive officers than would have been granted using the prior methodology. The closing price on the date of grant was used to value awards to associates who are not executive officers.

     For the equity compensation awards granted in 2010 (discussed on page 28), the Compensation Committee used the average closing BD stock price for the 20 trading days preceding the grant date to determine the BD stock price used to value awards. The Compensation Committee believes that this practice reduces the effects of stock price volatility on the number of awards. It also reduces the possibility of grantees being harmed by or benefiting from short-term movements in our stock price.

     The values given to equity compensation awards by the Compensation Committee are estimates only, and are not predictive of the value that will be ultimately realized from the awards. Such value will depend on a number of factors, including our operating performance and our stock price. In addition, to the extent the Compensation Committee uses a BD stock price that differs from the closing price on the grant date, the value ascribed to awards by the Compensation Committee may be different than the values used for financial reporting and shown in the tables included in this proxy statement.

     Performance Unit targets. The performance measures used for the Performance Units are revenue growth and return on invested capital (which we refer to as “ROIC”). For grants made in 2009, revenue growth is weighted 60% and ROIC is weighted 40%. For the grants made in 2010, revenue growth is weighted 70% and ROIC is weighted 30%. Revenue and ROIC targets for Performance Units are based on BD’s business plan at the time of the grant and what the Compensation Committee believes is a reasonable range of performance over the performance period, as well as growth trends in the segments in which we operate. The Compensation Committee’s goal is to set challenging but achievable goals.

     We use revenue growth as a performance metric because it is directly tied to our long-term growth strategy of focusing on products that provide greater benefits to patients, healthcare workers and researchers. Revenue growth is measured after eliminating the effect of foreign currency translation so that only the impact of improved performance is counted. ROIC is used to motivate our executives to continue BD’s returns at their recent levels and maintain our balance sheet strength. The Compensation Committee believes sustained performance in revenue growth and ROIC will lead to long-term value for our shareholders.

     Performance Unit awards are given a share target. A grid determines the actual number of shares that will be issued upon vesting, based on how BD’s performance compares to the performance targets. The number of shares issued can range anywhere from zero (if BD fails to meet the minimum performance threshold for both revenue growth and ROIC) to 200% of the share target (if BD meets the maximum payout threshold for both revenue growth and ROIC). In applying the grid, the Compensation Committee has the discretion to make adjustments when examining BD’s operating results to account for events that occur during the performance period.

     As with PIP awards, the named executive officers are eligible to receive Performance Unit payouts only if BD first meets a baseline net income target set by the Compensation Committee, which establishes a maximum award payout if the target is met. The Compensation Committee has the discretion (and has historically exercised this discretion) to reduce the amount of the award based on the revenue and ROIC grid discussed above. For purposes of this proxy statement, when discussing performance measures for Performance Units, we refer to the revenue and ROIC targets.

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 year.

     2009 Salaries. Mr. Ludwig’s base salary for calendar year 2009 was maintained at $1,070,000, the same salary in effect for calendar year 2008, because the Compensation Committee believed Mr. Ludwig’s salary was consistent with competitive pay practices.

     In November 2008, we announced that Vincent A. Forlenza was elected as President of BD, effective January 1, 2009. In connection with his election, Mr. Forlenza’s salary was increased from $545,000 to $650,000. Salary increases were also approved for Messrs. Considine and Kozy of 4% and 5.5%, respectively, consistent with market comparison data.

     David V. Elkins became our Executive Vice President and Chief Financial Officer on December 1, 2008. In connection with his election, the Compensation Committee approved a base salary for Mr. Elkins of $500,000.

     2010 Salaries. In light of the current economic conditions and based on management’s recommendation, our named executive officers did not receive any salary increase for calendar year 2010. The Compensation Committee believes that the current salaries of the named executive officers remain within the target range of compensation, consistent with our objective of providing competitive compensation to our executives.

     For 2009, the performance target under the PIP was EPS of $4.82. This target is the midpoint of the EPS range we initially provided to investors as earnings guidance for 2009, adjusted for the divestiture of our home healthcare business that took place in 2009. The EPS target represents a 9% increase over our reported 2008 EPS.

     Our reported EPS for 2009 was $4.92. In reviewing BD’s performance against the target, the Compensation Committee exercised its discretion to eliminate the $0.11 charge incurred in connection with the pending settlement of certain antitrust class action suits and the $0.08 gain relating to various tax settlements. As a result, 2009 EPS was adjusted by a net $0.03 to $4.95. This represented approximately 103% of the performance target, and resulted in available PIP funding of 113% of target awards. The Compensation Committee adjusted for the litigation charge because it believed the decision to enter into the settlement was in BD’s best interests and that it was not appropriate to reduce available PIP funding because of the adverse effect of this settlement on our earnings. The gain on the tax settlements was eliminated because this is not considered part of our ordinary operations and would have resulted in an increase in PIP funding that was not related to our performance. BD’s EPS for the year also included a $0.26 gain, as compared to a budget for the year of $0.32, relating to our hedging activities, which offset, in part, unfavorable foreign currency translation. Hedging gains of this magnitude are unusual for BD, and resulted from the extraordinary volatility in exchange rates that occurred in 2009. However, because it was budgeted, the Compensation Committee did not adjust EPS for this item when calculating funding for PIP awards.

     The table below sets forth the PIP awards made to the named executive officers for 2009. These awards are also set forth in the Summary Compensation Table on page 35 under the heading “Non-Equity Incentive Plan Compensation.”

		Target Incentive				Actual Incentive				Award as
Name		Award				Award				% of Target
Edward J. Ludwig		$	1,284,000			$	1,500,000				117	%
David V. Elkins			350,000	(1)			350,000				100	%
John R. Considine			519,704				600,000				115	%
Vincent A. Forlenza			529,158				625,000				118	%
William A. Kozy			397,008				470,000				118	%

(1)

Represents guaranteed minimum PIP award under sign-on agreement. Otherwise, Mr. Elkins’ target award would have been $289,423.

     The PIP awards made to Messrs. Ludwig, Considine, Forlenza and Kozy range between 115% and 118% and were generally in line with the available PIP funding of 113%. The award to Mr. Elkins represents his guaranteed minimum PIP award under his sign-on arrangements. The Compensation Committee believes that these awards are within the range of compensation targeted by the Compensation Committee, based on market comparison data.

     The PIP awards granted to the named executive officers recognize the collective efforts of BD’s management in responding to the challenging economic environment BD faced in 2009 and maintaining BD’s profitability without sacrificing investment in BD’s growth opportunities. In setting these awards, the Compensation Committee also noted that each of the named executive officers had met or exceeded his performance objectives for the year.

     Equity-Based Compensation Awards

     Awards made in 2009. In November 2008, the Compensation Committee made the equity compensation awards to Messrs. Ludwig, Considine, Forlenza and Kozy reflected in the “Grants of Plan-Based Awards in Fiscal Year 2009” table on page 38. These awards were made with respect to 2008 performance. However, these awards are reflected in the Summary Compensation Table and other tables for 2009, as required by the SEC proxy statement rules, since they were awarded during the 2009 fiscal year.

     The total value of the awards to Messrs. Ludwig and Kozy, based on the values used for financial reporting purposes, decreased 10% from their prior year award, while such total value of the award to Mr. Considine decreased by 16%. These decreases resulted in large part from a change in valuation methodology used by the Compensation Committee and described on page 26. In making awards, the Compensation Committee first establishes a dollar amount of value intended to be delivered to each of the named executive officers. For the 2009 grant, the Compensation Committee used an assumed value per share of BD common stock of $74.89 to determine the number of SARs and units to be awarded in order to deliver such dollar amount. The share price used by the Compensation Committee was $12.39 per share higher than the $62.50 closing price on the date of grant. This resulted in grants of fewer SARs and units than would have been granted if the awards had been valued using the BD stock price on the date of grant. Because the Compensation Committee used a price that was higher than the grant date closing price, the value ascribed to the awards by the Compensation Committee for compensatory purposes was higher than the value used for financial reporting purposes and shown in the Grant of Plan-Based Awards in Fiscal Year 2009 table on page 38. The award to Mr. Forlenza represented an increase of 30% over his prior year award, despite the change in methodology, as an adjustment was made to his award value to recognize his election as President of BD, effective January 1, 2009. The Compensation Committee believes that the values it ascribed to the grants to the named executive officers were within the target range of compensation, based on market comparison data.

     The Performance Units included in these awards cover the fiscal year 2009-2011 performance period. The following table sets forth the minimum performance thresholds, target performance and maximum payout thresholds for these awards:

		Minimum
		Performance				Target				Maximum Payout
Performance Measure		Threshold(1)				Performance				Threshold(2)
Revenue Growth			5.5	%			8.5	%			12.5	%
ROIC			27	%			31	%			34	%

     Awards made in 2010. In November 2009 (fiscal year 2010), the Compensation Committee made the equity compensation awards to the named executive officers reflected on page 40 with respect to fiscal year 2009 performance. The award made to Mr. Ludwig represented an increase of 30% over his fiscal year 2009 award, while the awards to Messrs. Considine and Forlenza represented increases of 36% and the award to Mr. Kozy represented an increase of 44%. As described above, the value of the awards made in fiscal year 2009 were lowered as a result of the valuation methodology used by the Compensation Committee for those awards. For the fiscal year 2010 awards, the Compensation Committee valued the awards based on the average BD closing price for the 20 trading days prior to grant. As a result, the price used to value the grants and determine the number of SARs and units to be issued was $71.08 (compared to the closing price on the grant date of $75.63). As a result, the award values used for financial reporting purposes are higher than the values ascribed to the awards by the Compensation Committee for compensatory purposes. This change in methodology contributed in part to the increase in award values described above. In addition, adjustments in equity compensation values were made in response to market comparison data and were intended to maintain the equity compensation of these individuals in the competitive range targeted by the Compensation Committee. The Compensation Committee believes that the grants made to BD’s named executive officers are within the target range of compensation.

     The Performance Units included in these awards cover the fiscal year 2010-2012 performance period. The table below shows the minimum performance thresholds, target performance and maximum payout thresholds for these awards.

		Minimum
		Performance				Target				Maximum Payout
Performance Measure		Threshold(1)				Performance				Threshold(2)
Revenue Growth			4	%			7	%			11	%
ROIC			28	%			32	%			35	%

     As was stated earlier, we set revenue growth and ROIC targets for Performance Units based on BD’s business plan and what the Compensation Committee considers a reasonable range of performance over the performance period. In making these awards, the Compensation Committee deemed it appropriate to lower the revenue growth target from the prior year’s grant. The Compensation Committee believes this three-year revenue target is a challenging goal for management given the current economic climate and its expected effect on BD’s near-term results. At the same time, the Compensation Committee raised the threshold performance for ROIC based on BD’s past performance with respect to this metric.

Payout of prior Performance Unit awards

     2006-2008 performance period

     In November 2008, Performance Units awarded in fiscal year 2006 vested. These awards covered the fiscal year 2006-2008 performance period. The payout of these awards is reflected in the “Option Exercises and Stock Vested in Fiscal Year 2009” table on page 43. The performance targets for these Performance Units were 7.5% average annual revenue growth (foreign currency neutral) and 30% average ROIC.

     Average annual revenue growth and average ROIC over the performance period were approximately 7.8% and 31.8%, respectively. In applying the payout grid, the Compensation Committee used its discretion to adjust reported revenue growth to take into account acquisitions and divestitures that had the net effect of increasing revenue growth. This resulted in a downward adjustment of revenue growth for the performance period from 7.8% to 7.3%. The Compensation Committee also adjusted ROIC for the period to eliminate the effects of the income resulting from an insurance settlement, the non-cash in-process research and development charges incurred in connection with our acquisitions of GeneOhm Sciences, Inc., TriPath Imaging, Inc. and Plasso Technology, Ltd., and the costs associated with the exit from our blood glucose monitoring business. However, these items offset each other and resulted in no adjustment to ROIC for the period. The Committee adjusted ROIC for the insurance settlement because it was not considered part of our ordinary operations and would have, standing alone, resulted in an increase in ROIC that was not related to the performance of our business. The adverse effect on ROIC resulting from the charges relating to our acquisitions and blood glucose monitoring business was eliminated because these actions were taken in support of our long-term strategy, and the Compensation Committee did not believe it was appropriate to reduce the Performance Unit payouts as a result of these actions. Based on the adjustment to revenue growth, the share payout of the awards was adjusted downward from 122% to 115% of the share target.

     2007-2009 performance period

     In November 2009, Performance Units covering the fiscal year 2007-2009 performance period vested. The performance targets for these Performance Units were 9% average annual revenue growth (foreign currency neutral) and 30% average ROIC.

     Average annual revenue growth and average ROIC over the performance period were approximately 6.4% and 31.8%, respectively. In applying the payout grid, the Compensation Committee used its discretion to adjust reported revenue growth to take into account acquisitions and divestitures (including the divestiture of our home healthcare business) that had the net effect of increasing revenue growth for the period. This resulted in a downward adjustment of revenue growth for the performance period from 6.4% to 6.1%. The Compensation Committee also adjusted ROIC for the period to eliminate the effects of the in-process research and development charges incurred in connection with the TriPath and Plasso acquisitions for the reasons discussed earlier. ROIC was further adjusted to eliminate the effect of the charge relating to the pending settlement of certain antitrust cases. The Compensation Committee thought it appropriate to adjust for this settlement since it was determined that the settlement was in BD’s best interests, and the Compensation Committee did not believe it was appropriate for the Performance Unit payouts to be reduced as a result. These adjustments increased ROIC for the period from 31.1% to 31.7%. Based on the adjustments to revenue growth and ROIC, the share payout of the awards was adjusted upward from 74% to 77% of the share target.

     Other Compensation Actions

     In connection with his election as Executive Vice President and Chief Financial Officer, effective December 1, 2008, David V. Elkins received a sign-on payment of $220,000 and sign-on award of 5,285 TVUs. Mr. Elkins was also given a salary of $500,000, and was guaranteed a minimum $350,000 PIP award for 2009. We also provide Mr. Elkins financial assistance with his relocation to New Jersey, and will compensate him for any taxes payable as a result of such assistance. Mr. Elkins will also receive an additional $250,000 payment in January 2010 to compensate for the forfeiture of equity awards he had previously received from his former employer. In order to attract and retain qualified executives, sign-on packages are sometimes needed to compensate candidates for any compensation they may lose by leaving their current employer, and to mitigate the risk associated with a job change, particularly for persons at senior level positions. These terms were the result of negotiations between BD and Mr. Elkins in connection with his recruitment, and were approved by the Compensation Committee as a reasonable inducement for Mr. Elkins to join BD.

Other benefits under our executive compensation program

     Company transportation

     The Compensation Committee encourages Mr. Ludwig to use BD aircraft for his personal and business travel, in order to make more efficient use of his travel time and mitigate business continuity risk. BD and Mr. Ludwig have entered into a time-sharing arrangement, under which Mr. Ludwig makes payments to BD for his personal use of BD aircraft. For 2009, Mr. Ludwig’s time-share payments totaled $208,933. These payments covered all of the incremental costs relating to Mr. Ludwig’s personal flights. Additional information on the time-sharing arrangement is set forth in the notes to the Summary Compensation Table on page 35.

     Our Deferred Compensation and Retirement Benefit Restoration Plan is an unfunded, nonqualified plan that, among other things, allows the named executive officers and other eligible associates to defer receipt of cash compensation and shares issuable under certain equity compensation awards. This 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 table on page 46 shows activity in the deferral accounts of the named executive officers during 2009. We do not provide any guaranteed earnings on amounts deferred by the named executive officers. Earnings on these accounts are based on their individual investment selections. The plan is offered to our eligible associates as part of a competitive compensation program.

     BD provides matching contributions on deferred cash compensation under the plan. 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. These matching contributions are made to the extent the total salary and PIP award from which a participant makes contributions to both plans do not exceed three times the limit for qualified plans (which was $735,000 in calendar year 2009).

     We offer retirement benefits for all of our associates. Because the Internal Revenue Code limits the maximum annual benefit that may be paid to an individual under our qualified Retirement Plan, we provide additional benefits through our non-qualified Deferred Compensation and Retirement Benefit Restoration Plan. Together, these plans are designed to provide a market-competitive level of income replacement for our retirement-eligible associates, reduce associate turnover and contribute towards providing a competitive compensation package. A more complete description of our pension benefits begins on page 43. The named executive officers participate in these plans on the same basis as all eligible associates.

     We have an agreement with each of the named executive officers relating to their employment following a change of control. This agreement provides the executive with continued employment for a period of two years following a change of control of BD. It also provides certain benefits to the executive in the event his employment is terminated during this period. Generally, these benefits include a severance payment equal to two times (in the case of Mr. Elkins) or three times (in the case of the other named executive officers) the executive’s salary and PIP award, certain pension benefits, continued welfare plan benefits and outplacement services. More complete descriptions of the terms and potential payouts of our change of control agreements are found beginning on page 47.

     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 threatened 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 policies. Based on information provided by Towers Perrin, 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 intended to be 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.

     In setting the potential payments under these agreements, the Compensation Committee does not consider the wealth accumulation of the named executive officers, because the Compensation Committee believes these agreements are important in protecting shareholder interests in the event of an actual or threatened change of control. In addition, while salary and PIP decisions affect the potential payouts under these agreements, this did not affect the Compensation Committee’s decision-making. The Compensation Committee does not believe it is appropriate to base salary and PIP decisions on the potential effect they may have under change of control agreements that may never be triggered.

     Triggering events. Our agreements contain what is known as a “double trigger” — that is, there must be a change of control of BD and a termination of the executive’s employment in order for any payments to be made. The termination can be either an actual termination or a “constructive” termination. A “constructive” termination occurs when a named executive

officer’s duties are materially reduced, the executive is required to relocate beyond a certain distance, or the executive’s compensation is reduced. We opted for a “double-trigger,” rather than providing for severance payments solely on the basis of a change of control, since this is more consistent with the purpose of encouraging the continued employment of the executive in the event of a change of control.

     “Gross-up” payments. As is discussed on page 48, if the payments made to a named executive officer on account of his termination exceed certain amounts, BD may not be able to deduct the payments for federal income tax purposes and the named executive officer could be subject to a 20% excise tax on such payments. The excise tax is in addition to the executive’s regular payroll and income taxes. To offset the effect of the excise tax, we will make a “gross-up” payment to a named executive officer to reimburse him for the excise tax. In this way, the executive retains the same amount that he would have retained had the excise tax not been imposed. We provide for these payments because they allow an executive to recognize the full intended economic benefit of his agreement and eliminate unintended disparities between executives that the excise tax can arbitrarily impose, owing to the particular structure of this tax provision.

     Other change of control provisions

     Upon a change of control, all equity compensation awards issued under our plans will immediately vest. This accelerated vesting occurs for all employees, not just the named executive officers. Unlike the “double trigger” under the change of control agreements discussed above, no termination of employment is required for the accelerated vesting of the awards. This “single-trigger” vesting provides our employees with the same opportunity as our shareholders to realize the value created by the transaction. Based on information provided by Towers Perrin, the Compensation Committee believes that these accelerated vesting provisions are consistent with market practices.

Significant policies and additional information regarding executive compensation

     Recovery of prior compensation

     The Board of Directors has adopted a policy that gives the Board the discretion to require a member of the BD Leadership Team to reimburse BD for any PIP award or Performance Unit payout that was based on financial results that were subsequently restated as a result of such member’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 43 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 in the amount by which their PIP award or Performance Unit payouts exceeded the amount they would have received based on the restated results.

     The terms of the policy have been incorporated into the PIP and the terms of our equity compensation awards. The policy is available on BD’s website at www.bd.com/investors/corporate_governance/.

     In order to increase executive share ownership and promote a long-term perspective toward managing our business, we have adopted share retention and ownership guidelines for the named executive officers and other members of the BD Leadership Team. Under the guidelines, these associates are expected to retain, in shares of BD stock, 75% of the net, after-tax gain or the net, after-tax shares realized under equity compensation awards granted after the adoption of the guidelines in July 2004, until the person achieves and maintains a significant ownership position, which is expressed as a multiple of salary as follows:

Chief Executive Officer		5 times salary
President		5 times salary
Other Executive Officers (9 persons)		3 times salary
Other BD Leadership Team Members (32 persons)		1 times salary

     The Compensation Committee annually reviews the shareholdings of the persons subject to these guidelines. Shares held directly, shares held indirectly through our benefit plans (including our 401(k) plan and Deferred Compensation and Retirement Benefit Restoration Plan), Career Shares and TVUs are included in determining a person’s share ownership. Stock options and SARs (whether vested or unvested) and unvested Performance Units are not included. Each of the named executive officers has holdings in BD stock in excess of his ownership requirement, other than Mr. Elkins, who only joined BD in December 2008.

     The named executive officers are required to hold 75% of the net, after-tax shares received upon exercise of their SARs for a period of one year following exercise. This is in addition to any requirements they may have under our share retention and ownership guidelines.

     Our insider trading policy expressly prohibits our associates from engaging in options, puts, calls or other transactions that are intended to hedge against the economic risk of owning BD shares. This policy is available on BD’s website at www.bd.com/investors/corporate_governance/.

     The Compensation Committee has adopted a policy on the granting of equity compensation awards (which can be found on BD’s website at www.bd.com/investors/corporate_governance/). The policy prohibits the backdating of any equity grant, 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.

     Section 162(m) of the Internal Revenue Code precludes BD from taking a federal income tax deduction for compensation paid in excess of $1 million to a named executive officer (other than our Chief Financial Officer). This limitation does not apply, however, to “performance-based” compensation, including SARs, stock options, Performance Units and PIP awards. Salary and TVUs do not constitute “performance-based” compensation and are subject to the limitations of Section 162(m).

     While the Compensation Committee generally attempts to preserve the deductibility of compensation paid to the named executive officers, the Compensation Committee believes the primary purpose of our compensation program is to support BD’s strategy and the long-term interests of our shareholders. Therefore, the Compensation Committee maintains the flexibility to award compensation that may be subject to the limits of Section 162(m) if doing so furthers the objectives of our executive compensation program. In recognition of the limits under Section 162(m), the TVUs granted to the named executive officers in 2009 contain a provision that gives the Compensation Committee the authority to require the deferral of any shares issuable under a TVU if the deduction for such shares would be limited under Section 162(m). In addition, the Compensation Committee used its authority under the terms of the November 2003 Performance Unit grant to require Mr. Ludwig to defer the receipt of shares that were otherwise payable to him under this grant in November 2008. These shares are required to be deferred until such time as the deduction for the payment of the shares will not be limited under Section 162(m).

     We account for stock-based compensation in accordance with SFAS No. 123(R). SFAS No. 123(R) requires us to recognize compensation expense relating to share-based payments (such as SARs and restricted stock units) in our financial statements. The adoption of SFAS No. 123(R) and the recognition of this expense have not caused us to limit or significantly alter the equity compensation element of our program. This is because we believe equity compensation is needed to provide a competitive executive compensation program and fulfills important program objectives. We did, however, switch from issuing stock options to stock-settled SARs following the adoption of SFAS No. 123(R), since both types of awards result in the recognition of compensation expense and we believed that stock-settled SARs would result in less shareholder dilution. We would consider the effect under SFAS No. 123(R) of any proposed change to the equity compensation element of our program.

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 and return on capital. 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:

•

Linking rewards to performance

•

We maintain a pay-for-performance philosophy based on actual performance as against clear, measurable company performance targets, particularly those metrics which support the creation of long-term shareholder value.

•

Delivering superior business and financial results

•

Performance targets are set to reward executives for achieving outstanding short and long-term results in line with our objective of enhancing long-term shareholder value. In setting short-term goals and in rewarding performance, we will take care to ensure that we do not create incentives to take inappropriate risks.

•

Offering a competitive compensation structure

	•		We have established and intend to maintain a competitive structure that supports the recruitment and retention of high-performance executives, essential to driving the business results required to execute our strategy and create long-term value for shareholders. This structure is determined by evaluating peer group data which is provided and analyzed by the Committee’s independent consultant, Towers Perrin.

•

Aligning the interests of executives and shareholders

•

Through equity-based compensation and equity ownership guidelines for executives, we seek to align the interests of executives with those of the company’s shareholders. This represents the largest portion of our compensation structure.

•

Maintaining a transparent compensation structure

•

The Committee strives to provide absolute transparency to executives, employees and shareholders of all aspects of BD’s compensation and benefits structure. This includes disclosure of performance targets, payout formulas and details of other earned benefits.

•

Maintaining Committee independence

•

The Committee is made up exclusively of independent directors and utilizes an independent compensation consultant, Towers Perrin, which, by Committee policy, is prohibited from performing any services for BD or its management without the Committee’s prior approval.

•

Retaining prerogative to adjust programs

•

The Committee retains the prerogative to change or modify compensation and benefit programs to reflect prevailing economic, market or company financial conditions.

     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 year ended September 30, 2009 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

     The following table shows the compensation provided by BD to each of the named executive officers in fiscal year 2009.

																										Change in
																										Pension Value
																										and Nonqualified
																						Non-Equity				Deferred				All
Name and														Stock				Option				Incentive Plan				Compensation				Other
Principal Position		Year				Salary(1)				Bonus				Awards(2)				Awards(2)				Compensation(3)				Earnings(4)				Compensation(5)				Total
Edward J. Ludwig			2009			$	1,070,000				0			$	1,999,501			$	1,599,932			$	1,500,000			$	2,918,894			$	33,055			$	9,121,382
Chairman and Chief			2008				1,059,846				0				2,995,948				1,918,861				1,526,179				0				14,280				7,515,114
Executive Officer			2007				1,030,000				0				2,961,445				2,192,651				1,400,000				448,171				19,160				8,051,427
David V. Elkins Executive Vice President and Chief Financial Officer (6)			2009				413,462			$	220,000	(7)			91,014				—				350,000				13,697				78,381				1,166,554
John R. Considine			2009				692,939				0				597,319				463,291				600,000				595,256				32,464				2,981,269
Vice Chairman			2008				667,162				0				955,656				599,476				675,000				223,992				11,061				3,132,347
			2007				643,951				0				1,025,692				745,676				670,000				159,518				7,313				3,252,150
Vincent A. Forlenza			2009				622,538				0				627,889				556,504				625,000				1,108,180				36,202				3,576,313
President			2008				538,654				0				975,762				838,634				625,000				0				39,587				3,017,637
			2007				510,170				0				847,415				589,719				585,000				203,258				7,299				2,742,861
William A. Kozy			2009				567,154				0				479,190				385,383				470,000				1,213,906				35,446				3,151,079
Executive Vice President			2008				538,654				0				725,842				465,383				470,000				0				14,040				2,213,919
			2007				509,162				0				855,536				666,355				425,000				201,468				7,520				2,665,041

     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 at the beginning and end of the fiscal year. A decrease in present value is shown in the above table as “0.” Information regarding the named executive officers’ accumulated benefits under our pension plans is on page 44.

     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’ deferred compensation accounts is on page 46.

(5)

All Other Compensation. Amounts shown for fiscal year 2009 include the following:

		Edward J. Ludwig				David V. Elkins				John R. Considine				Vincent A. Forlenza				William A. Kozy
Matching contributions under plans			$31,725				$10,385				$31,725				$31,725				$31,725
Use of corporate transportation			200				—				—				—				—
Tax reimbursements			—				—				—				3,791				3,114
Relocation Benefits			—				67,996				—				—				—
Term life insurance			1,130				—				739				686				607
Total			$33,055				$78,381				$32,464				$36,202				$35,446

     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.
	•		Use of Corporate Transportation — The amount shown for Mr. Ludwig is the value attributed to his personal use of corporate transportation. Pursuant to a policy adopted by the Board of Directors, Mr. Ludwig is encouraged to use BD aircraft for his personal and business travel. The value of Mr. Ludwig’s personal use of BD aircraft is equal to the incremental variable costs incurred by BD in connection with his flights that are not reimbursed by Mr. Ludwig. These variable costs include fuel, trip-related maintenance, crew travel expenses, on-board catering and landing and parking fees. 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. Ludwig have entered into a time-sharing arrangement under which Mr. Ludwig makes time-share payments to BD for his personal use of BD aircraft. The payments are for the maximum amount permitted by Federal Aviation Administration regulations without subjecting BD to regulation as a charter carrier. Mr. Ludwig made total payments of $208,933 under this arrangement for personal flights taken in fiscal year 2009, which more than covered all of the variable costs incurred by BD in connection with these flights. Accordingly, no value has been attributed to his use of corporate aircraft in the Summary Compensation Table.
			BD also makes available a driver and BD-leased car to Mr. Ludwig on occasion for commuting to and from work. The incremental costs incurred by BD in connection with this transportation are fuel charges and any other variable costs related to such use. Since BD-leased cars are used predominantly for business purposes, we have not included fixed costs, such as driver salaries, which do not change based on usage.
			Mr. Ludwig is responsible for the payment of any tax on any income imputed to him as a result of his use of corporate transportation.
	•		Tax Reimbursements — Mr. Kozy, a resident of New Jersey, spent a portion of his time in California in connection with his oversight of our BD Biosciences business segment. As a result, part of Mr. Kozy’s income may be treated as being earned in California for California state tax purposes. BD reimburses Mr. Kozy for any incremental state tax liability incurred by him as a result of being subject to California taxation. The same arrangement is in effect for Mr. Forlenza with respect to the period that he served as President of BD Biosciences.
	•		Relocation Benefits — In connection with his election as an executive officer, we extended certain relocation benefits to Mr. Elkins. These include a monthly housing allowance and reimbursement for travel and other costs. BD also pays any related taxes that may be

			payable by Mr. Elkins on his relocation benefits. For 2009, tax reimbursements paid to Mr. Elkins were $27,046.
	•		Term Life Insurance — BD provides incremental term life insurance benefits to the 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.

(6)		Mr. Elkins was elected to his position effective December 1, 2008.
(7)		Represents amount paid as a sign-on bonus at the commencement of Mr. Elkins’ employment.

INFORMATION REGARDING PLAN AWARDS IN FISCAL YEAR 2009

     Set forth below is information regarding awards provided to the named executive officers in fiscal year 2009. The non-equity incentive awards were made under the BD Performance Incentive Plan. The equity-based awards were made under BD’s 2004 Employee and Director Equity-Based Compensation Plan.

Grants of Plan-Based Awards in Fiscal Year 2009

																																		All Other				All Other
																																		Stock				Option				Exercise				Grant
										Estimated Possible Payouts												Estimated Future Payouts												Awards:				Awards:				or Base				Date Fair
										Under Non-Equity Incentive												Under Equity Incentive												Number				Number of				Price of				Value of
										Plan Awards(2)												Plan Awards(3)												of Shares				Securities				Option				Stock and
		Award				Grant				Threshold				Target				Maximum				Threshold				Target				Maximum				of Stock				Underlying				Awards				Option
Name		Type(1)				Date				($)				($)				($)				(#)				(#)				(#)				or Units (4)				Options				($/Sh) (5)				Awards (6)
Edward J. Ludwig		PIP					N/A			$	642,000			$	1,284,000			$	2,568,000
		PU					11/25/08																312				31,234				62,468															$	3,904,250
		TVU					11/25/08																												15,617												976,063
		SAR					11/25/08																																99,313			$	62.50				1,599,932
David V. Elkins		PIP					N/A				N/A(7)				350,000				578,847
		TVU					12/01/08																												5,285												327,829
John R. Considine		PIP					N/A				259,852				519,704				1,039,408
		PU					11/25/08																90				9,044				18,088																1,130,500
		TVU					11/25/08																												4,522												282,625
		SAR					11/25/08																																28,758			$	62.50				463,291
Vincent A. Forlenza		PIP					N/A				264,579				529,158				1,058,316
		PU					11/25/08																109				10,864				21,728																1,358,000
		TVU					11/25/08																												5,432												339,500
		SAR					11/25/08																																34,544			$	62.50				556,504
William A. Kozy		PIP					N/A				198,504				397,008				794,016
		PU					11/25/08																75				7,523				15,046																940,375
		TVU					11/25/08																												3,762												235,125
		SAR					11/25/08																																23,922			$	62.50				385,383

		Performance Incentive Plan funding of 50% of target, and that the named executive officer received an award equal to 50% of his award target. With respect to Mr. Elkins, please see note 7 below.
(3)		The amounts shown represent the range of potential payouts, expressed in number of shares, under the 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 level that would result in a 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 amounts shown do not reflect shares that may be issued pursuant to dividend equivalent rights.
(5)		The exercise price is the closing price of BD common stock on the date of grant, as reported on the New York Stock Exchange.
(6)		The amounts shown in this column reflect the grant date fair value of the awards under SFAS No. 123(R) used by BD for financial statement reporting purposes (disregarding estimated forfeitures), assuming the Performance Units pay out at their maximum payout. (Values shown for Performance Units in the last year’s proxy statement assumed pay out at target.) For a discussion of the assumptions made by us in arriving at the grant date fair value of these awards, see note 15 to the consolidated financial statements that are included in our Annual Report on Form 10-K for the year ended September 30, 2009.
(7)		As part of his agreement to join BD, it was agreed that Mr. Elkins would receive a minimum PIP award for fiscal year 2009 of at least $350,000.

Description of Awards

     The following is a description of the awards listed in the above table.

Performance Incentive Plan

     The BD Performance Incentive Plan (“PIP”) provides an opportunity for annual cash incentive payments to the named executive officers and other eligible associates. A more detailed discussion of the PIP and the performance objectives established under the PIP for fiscal year 2009 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-Based 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 anywhere from zero to 200% of the award’s share target. The actual payout is based on BD’s performance against the performance targets over the three-year performance period covering fiscal years 2009-2011. The performance targets include 8.5% average annual revenue growth (after excluding the effects of foreign currency translation) and average return on invested capital of 31% over the performance period. Performance Units are issued in tandem with dividend equivalent rights (see below).

     Time Vested Units. A Time-Vested Unit (“TVU”) is a restricted stock unit that represents the right to receive one share of BD common stock upon vesting. TVUs vest three years after grant. TVUs are issued in tandem with dividend equivalent rights (see below).

     Stock Appreciation Rights (SARs). A 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. These grants have a ten-year term, and become exercisable in four equal annual installments, beginning one year following the grant date. The named executive officers are required to hold 75% of the net, after-tax shares received upon exercise of the SARs for a period of one year following exercise.

     Dividend Equivalent Rights. Performance Units and TVUs are issued in tandem with dividend equivalent rights. Under these rights, the holder is credited with additional restricted stock units each time BD pays a dividend. 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 only if the underlying award vests. The value of the dividend equivalent rights is included in the amount 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-Based Compensation Awards Upon a Change of Control” on page 49).

     The applicable rules of the SEC require us to provide information regarding equity-based compensation paid in fiscal year 2009. We are supplementally providing the information below regarding equity-based compensation provided to the named executive officers in November 2009 (fiscal year 2010) under the 2004 Employee and Director Equity-Based Compensation Plan. The value of these awards is not reflected in the Summary Compensation Table on page 35, the Grants of Plan-Based Awards in Fiscal Year 2009 table on page 38 or the Outstanding Equity Awards at 2009 Fiscal Year-End table on page 41, because they were granted following the end of fiscal year 2009.

																						All Other
																						Option
										Estimated Future Payouts												Awards:				Exercise or
										Under Equity												Number of				Base Price of				Grant Date
										Incentive Plan Awards(2)												Securities				Option				Fair Value of
		Award				Grant				Threshold				Target				Maximum				Underlying				Awards				Stock and
Name		Type(1)				Date				(#)				(#)				(#)				Options(3)				($/Sh)(4)				Option Awards(5)
Edward J. Ludwig		PU					11/24/09				387				38,689				77,378											$	5,852,098
		SAR					11/24/09																150,540			$	75.63				2,965,638
David V. Elkins		PU SAR					11/24/09 11/24/09				84				8,441				16,882				32,845			$	75.63				1,276,786 647,047
John R. Considine		PU					11/24/09				117				11,712				23,424												1,771,557
		SAR					11/24/09																45,573			$	75.63				897,788
Vincent A. Forlenza		PU					11/24/09				141				14,069				28,138												2,128,076
		SAR					11/24/09																54,742			$	75.63				1,078,417
William A. Kozy		PU					11/24/09				103				10,340				20,680												1,564,028
		SAR					11/24/09																40,235			$	75.63				792,630