- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 1997 OR [_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-4802 BECTON, DICKINSON AND COMPANY SAVINGS INCENTIVE PLAN (FULL TITLE OF THE PLAN) BECTON, DICKINSON AND COMPANY (NAME OF ISSUER OF SECURITIES HELD PURSUANT TO THE PLAN) 1 Becton Drive 07417-1880 Franklin Lakes, New Jersey (ZIP CODE) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICER) (201) 847-6800 (TELEPHONE NUMBER) - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 1.FINANCIAL STATEMENTS AND SCHEDULES. The following financial data for the Plan are submitted herewith: Report of Independent Auditors Statements of Net Assets Available for Benefits, with Fund Information as of June 30, 1997 and 1996 Statement of Changes in Net Assets Available for Benefits, with Fund Information for the year ended June 30, 1997 Notes to Financial Statements Item 27a--Schedule of Assets Held for Investment Purposes as of June 30, 1997 Item 27d--Schedule of Reportable Transactions for the year ended June 30, 1997 2.1EXHIBITS. See Exhibit Index for a list of Exhibits filed or incorporated by reference as part of this report. 2 AUDITED FINANCIAL STATEMENTS AND SCHEDULES BECTON, DICKINSON AND COMPANY SAVINGS INCENTIVE PLAN JUNE 30, 1997 BECTON, DICKINSON AND COMPANY SAVINGS INCENTIVE PLAN AUDITED FINANCIAL STATEMENTS AND SCHEDULES JUNE 30, 1997 CONTENTS PAGE ---- Report of Independent Auditors............................................ F-1 FINANCIAL STATEMENTS Statements of Net Assets Available for Benefits, with Fund Information as of June 30, 1997 and 1996................................................ F-2 Statement of Changes in Net Assets Available for Benefits, with Fund Information for the year ended June 30, 1997............................. F-4 Notes to Financial Statements............................................. F-5 SCHEDULES Item 27a--Schedule of Assets Held for Investment Purposes as of June 30, 1997..................................................................... F-10 Item 27d--Schedule of Reportable Transactions for the year ended June 30, 1997..................................................................... F-12 REPORT OF INDEPENDENT AUDITORS Savings Incentive Plan Committee Becton, Dickinson and Company We have audited the accompanying statements of net assets available for benefits of the Becton, Dickinson and Company Savings Incentive Plan as of June 30, 1997 and 1996, and the related statement of changes in net assets available for benefits for the year ended June 30, 1997. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at June 30, 1997 and 1996, and the changes in its net assets available for benefits for the year ended June 30, 1997, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedule of assets held for investment purposes as of June 30, 1997, and schedule of reportable transactions for the year then ended are presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the basic financial statements. The fund information in the statements of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Ernst & Young LLP _____________________________________ Ernst & Young LLP Hackensack, New Jersey November 11, 1997 F-1 BECTON, DICKINSON AND COMPANY SAVINGS INCENTIVE PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION JUNE 30, 1997
FUND INFORMATION ------------------------------------------------------------------------------------------ BECTON, BECTON, DICKINSON DICKINSON FIXED S&P 500 AND COMPANY AND COMPANY MIDCAP LOANS INCOME INDEX COMMON PREFERRED BALANCED INDEX RECEIVABLE FUND FUND STOCK FUND STOCK FUND FUND FUND ACCOUNT TOTAL ------------ ----------- ------------ ------------ ----------- ----------- ----------- ------------ ASSETS Investments at fair value: Becton, Dickinson and Company Common Stock (3,358,931 shares, cost-- $40,165,998)....... $170,045,781 $ 82 $170,045,863 Becton, Dickinson and Company Series B ESOP Convertible Preferred Stock (873,698 shares, cost--$51,548,141) (Note 6)........... 141,539,050 141,539,050 State Street Bank and Trust Company S&P 500 Flagship Index Fund (561,403 units, cost-- $41,764,079)....... $80,850,400 80,850,400 State Street Bank and Trust Company MidCap Index Fund (524,824 units, cost--$11,520,994). $15,939,941 15,939,941 Barclays Global Investors Commingled Fund (987,486 units, cost--$12,315,395). $17,295,264 17,295,264 Investment Contracts at contract value (equivalent to cost): Allstate Life Insurance Company.. $ 16,648,345 16,648,345 Caisse des Depots CDC................ 1,872,027 1,872,027 The Canada Life Assurance Company.. 4,136,125 4,136,125 Hartford Life Insurance Company.. 6,089,486 6,089,486 John Hancock Mutual Life Insurance Company............ 20,426,286 20,426,286 Metropolitan Life Insurance Company.. 23,191,463 23,191,463 New York Life Insurance Company.. 7,726,349 7,726,349 Provident Life and Accident........... 17,006,989 17,006,989 Providian Capital Management......... 24,541,124 24,541,124 Security Life of Denver Insurance Company............ 5,773,721 5,773,721 Trans America Life & Annuity Company.. 5,098,926 5,098,926 State Street Bank and Trust Company.. 16,593,121 16,593,121 ------------ ----------- ------------ ------------ ----------- ----------- ------------ Total investments.. 149,103,962 80,850,400 170,045,781 141,539,132 17,295,264 15,939,941 574,774,480 Receivables: Interest........... 795,059 1,466 4,449 77 801,051 Dividends.......... 837,800 837,800 Participants' contributions...... 13,294 27,674 6,947 47,915 Employer contributions...... 4,167,655 4,167,655 Loans receivable from participants (Note 2)........... $12,829,334 12,829,334 Cash and cash equivalents......... 6,397,032 34 1,117,142 996,729 100,013 8,610,950 ------------ ----------- ------------ ------------ ----------- ----------- ----------- ------------ Total assets....... 156,296,053 80,863,728 171,164,389 147,545,765 17,423,028 15,946,888 12,829,334 602,069,185 LIABILITIES Accrued interest payable............. 1,974,436 1,974,436 Debt obligations (Notes 6 and 7)..... 41,787,010 41,787,010 Payable for investments purchased........... 350,922 350,922 Investment management fees payable............. 16,019 24,067 17,364 10,336 67,786 Other............... 795,371 (889,378) 1,077,338 (642,960) (168,415) 171,956 Loan repayments..... 16,673 (2,491) (7,662) 1,588 490 8,598 ------------ ----------- ------------ ------------ ----------- ----------- ------------ Total liabilities.. 828,063 (867,802) 1,437,962 43,761,446 (641,372) (157,589) 44,360,708 ------------ ----------- ------------ ------------ ----------- ----------- ----------- ------------ Net assets available for benefits........ $155,467,990 $81,731,530 $169,726,427 $103,784,319 $18,064,400 $16,104,477 $12,829,334 $557,708,477 ============ =========== ============ ============ =========== =========== =========== ============
See accompanying notes. F-2 BECTON, DICKINSON AND COMPANY SAVINGS INCENTIVE PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION JUNE 30, 1996
FUND INFORMATION ------------------------------------------------------------------------------------------------------- BECTON, BECTON, DICKINSON DICKINSON FIXED S&P 500 AND COMPANY AND COMPANY MIDCAP LOANS INCOME INDEX COMMON PREFERRED BALANCED INDEX RECEIVABLE FUND FUND STOCK FUND STOCK FUND FUND FUND ACCOUNT TOTAL ------------ ----------- ------------ ------------ ----------- ----------- ----------- ------------ ASSETS Investments at fair value: Becton, Dickinson and Company Common Stock (3,386,028 shares, cost-- $36,183,085)....... $135,843,027 $ 21,347 $135,864,374 Becton, Dickinson and Company Series B ESOP Convertible Preferred Stock (903,868 shares, cost--$53,328,196) (Note 6)........... 116,056,616 116,056,616 State Street Bank and Trust Company S&P 500 Flagship Index Fund (542,662 units, cost-- $35,944,467)....... $58,008,963 58,008,963 State Street Bank and Trust Company MidCap Index Fund (457,488 units, cost--$9,248,901).. $11,269,295 11,269,295 Barclays Global Investors Commingled Fund (840,970 units, cost--$9,753,823).. $11,952,505 11,952,505 Investment Contracts at contract value (equivalent to cost): Allstate Life Insurance Company.. $ 18,602,822 18,602,822 Caisse des Depots CDC................ 2,730,000 2,730,000 The Canada Life Assurance Company.. 4,134,645 4,134,645 Hartford Life Insurance Company.. 5,676,784 5,676,784 John Hancock Mutual Life Insurance Company............ 21,820,826 21,820,826 Metropolitan Life Insurance Company.. 21,865,380 21,865,380 New York Life Insurance Company.. 13,174,886 13,174,886 Provident Life and Accident........... 18,769,385 18,769,385 Providian Capital Management......... 24,587,578 24,587,578 The Prudential Insurance Company of America......... 4,513,191 4,513,191 Security Life of Denver Insurance Company............ 5,459,156 5,459,156 Trans America Life & Annuity Company.. 2,091,366 2,091,366 United of Omaha Life Insurance Company............ 3,011,737 3,011,737 ------------ ----------- ------------ ------------ ----------- ----------- ------------ Total investments.. 146,437,756 58,008,963 135,843,027 116,077,963 11,952,505 11,269,295 479,589,509 Receivables: Interest........... 762,828 2,042 5,160 94 770,124 Participants' contributions...... 23,475 72,590 31,511 38,472 166,048 Employer contributions...... 3,906,674 3,906,674 Loan repayments.... (19,959) 10,806 23,199 5,345 5,787 25,178 Loans receivable from participants (Note 2)........... $12,023,496 12,023,496 Cash and cash equivalents......... 4,967,911 959,059 1,915,520 109,970 7,952,460 ------------ ----------- ------------ ------------ ----------- ----------- ----------- ------------ Total assets....... 152,148,536 58,043,244 136,899,917 121,905,317 12,099,425 11,313,554 12,023,496 504,433,489 LIABILITIES Accrued interest payable............. 2,147,370 2,147,370 Debt obligations (Notes 6 and 7)..... 45,446,973 45,446,973 Investment management fees payable............. 60,812 7,133 10,600 3,532 82,077 Other............... 763,301 (65,657) 211,315 (29,631) (571,730) 307,598 ------------ ----------- ------------ ------------ ----------- ----------- ------------ Total liabilities.. 824,113 (58,524) 221,915 47,594,343 (29,631) (568,198) 47,984,018 ------------ ----------- ------------ ------------ ----------- ----------- ----------- ------------ Net assets available for benefits........ $151,324,423 $58,101,768 $136,678,002 $ 74,310,974 $12,129,056 $11,881,752 $12,023,496 $456,449,471 ============ =========== ============ ============ =========== =========== =========== ============
See accompanying notes. F-3 BECTON, DICKINSON AND COMPANY SAVINGS INCENTIVE PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION YEAR ENDED JUNE 30, 1997
FUND INFORMATION ------------------------------------------------------------------------------------------ BECTON, BECTON, DICKINSON DICKINSON AND AND FIXED S&P 500 COMPANY COMPANY LOANS INCOME INDEX COMMON PREFERRED BALANCED MIDCAP RECEIVABLE FUND FUND STOCK FUND STOCK FUND FUND INDEX FUND ACCOUNT TOTAL ------------ ----------- ------------ ------------ ----------- ----------- ------------ ------------ Additions: Participants' contributions... $ 12,220,515 $ 6,607,415 $ 5,545,598 $ 1,983,407 $ 2,605,784 $ 28,962,719 Rollover contributions... 1,561,974 524,368 295,382 251,017 313,850 2,946,591 Company contributions... 194,980 $ 4,295,032 4,490,012 Loan repayments.. 2,081,496 1,106,302 2,136,339 225,812 321,047 $ (5,870,996) -- Interest income.. 9,578,534 472 33,585 30,038 30,429 92 997,299 10,670,449 Dividends........ 1,716,907 3,399,857 5,116,764 Transfers between funds........... (3,087,657) 1,457,424 1,206,963 (138,332) 1,364,673 (803,071) -- ------------ ----------- ------------ ------------ ----------- ----------- ------------ ------------ 22,354,862 9,695,981 11,129,754 7,586,595 3,855,338 2,437,702 (4,873,697) 52,186,535 Deductions: Distributions to participants.... 15,778,456 5,245,615 9,320,911 3,616,332 743,302 891,176 497,065 36,092,857 Forfeitures...... 94,153 144,189 238,342 Loan withdrawals. 2,247,821 1,135,510 2,075,624 241,205 215,033 261,407 (6,176,600) -- Interest expense. 3,948,872 3,948,872 Administrative expenses........ 185,018 49,495 40,253 29,587 22,889 327,242 ------------ ----------- ------------ ------------ ----------- ----------- ------------ ------------ 18,211,295 6,430,620 11,530,941 7,950,598 987,922 1,175,472 (5,679,535) 40,607,313 Net appreciation in fair value of investments...... 20,364,401 33,449,612 29,837,348 3,067,928 2,960,495 89,679,784 ------------ ----------- ------------ ------------ ----------- ----------- ------------ ------------ Net increase...... 4,143,567 23,629,762 33,048,425 29,473,345 5,935,344 4,222,725 805,838 101,259,006 Net assets available for benefits at beginning of year............. 151,324,423 58,101,768 136,678,002 74,310,974 12,129,056 11,881,752 12,023,496 456,449,471 ------------ ----------- ------------ ------------ ----------- ----------- ------------ ------------ Net assets available for benefits at end of year (Note 3). $155,467,990 $81,731,530 $169,726,427 $103,784,319 $18,064,400 $16,104,477 $12,829,334 $557,708,477 ============ =========== ============ ============ =========== =========== ============ ============
See accompanying notes. F-4 BECTON, DICKINSON AND COMPANY SAVINGS INCENTIVE PLAN NOTES TO FINANCIAL STATEMENTS JUNE 30, 1997 1. SIGNIFICANT ACCOUNTING POLICIES Accounting records of the Becton, Dickinson and Company Savings Incentive Plan (the "Plan") are maintained on the accrual basis whereby all income, costs and expenses are recorded when earned or incurred. Investments are recorded on the basis of cost but are reported in the Plan's financial statements at fair value, redemption value or contract value. Fair value of marketable equity securities is determined by quoted market prices in an active market. The value of the Becton, Dickinson and Company Series B ESOP Convertible Preferred Stock was determined based upon the guaranteed redemption value of $59 per share or 320% of the fair value of the Becton, Dickinson and Company Common Stock, whichever is higher. The underlying investments in the Fixed Income Fund are contracts with insurance companies which are fully benefit responsive and valued at contract value. Contract value represents contributions made, plus interest at the contract rate and transfers, less distributions. Interests in commingled trust funds and mutual funds are valued at the redemption price established by the trustee or investment manager of the respective fund. Participant loans are valued at unpaid principal balances with maturities ranging from one to four and one- half years for ordinary loans and twenty years for primary residence loans. Cash equivalents are stated at cost, which approximates fair value. The Company considers all highly-liquid investments with a maturity of 90 days or less when purchased to be cash equivalents. Investment management fees, brokerage fees, commissions, stock transfer taxes, and other expenses related to each investment fund are paid out of the respective fund. Becton Dickinson pays trustee fees and other administrative expenses directly from corporate funds. All ESOP fees are paid by Becton Dickinson. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 2. DESCRIPTION OF THE PLAN The Plan is a defined contribution plan established for the purpose of encouraging and assisting employees in following a systematic savings program and to provide an opportunity for employees, at no cost to themselves, to become shareholders of Becton, Dickinson and Company. Employees of Becton, Dickinson and Company and certain of its domestic subsidiaries (the "Company") are eligible for participation in the Plan on the first enrollment date coincident with or next following the date on which the employee commences employment with the Company. Eligible employees who are members of the Plan can authorize a payroll deduction for a contribution to the Plan in an amount per payroll period equal to any selected whole percentage of pay from 2% to 16% inclusive. For purposes of the Plan, total pay includes base pay, overtime compensation and commissions. Pre-tax contributions are subject to an annual limitation of $9,500 for 1997, which may be increased annually based on the Consumer Price Index. Individual employee contributions of up to 6% of total pay are eligible for a matching Company contribution. The Board of Directors of the Company may, within prescribed limits, establish, from time to time, the rate of Company contributions. It has authorized the Company to make a monthly contribution to the Plan in an amount equal to 50% of eligible employee contributions during said month minus any forfeitures. Employee contributions can be in either before-tax ("401(k)") dollars or after-tax dollars or a combination of both. Employee contributions in before- tax dollars result in savings going into the Plan before most federal, state or local taxes are withheld. Taxes are deferred until the employee withdraws the 40l(k) contributions from the Plan. F-5 BECTON, DICKINSON AND COMPANY SAVINGS INCENTIVE PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) Participating employees are not liable for federal income taxes on amounts earned in the Plan or on amounts contributed by the Company until such time that their participating interest is distributed to them. In general, a participating employee is subject to tax on the amount by which the distribution paid to him exceeds the amount of after-tax dollars he has contributed to the Plan. Employee contributions are invested in five funds as described below: Fixed Income Fund: A fixed income fund with the full principal amount of employee contributions guaranteed by the Company. S&P 500 Index Fund: A diversified portfolio of common stocks and securities convertible into common stock. The Trustee's investment approach will be to hold all the common stocks included in Standard and Poor's 500 Stock Index (S&P 500) and, as a result, to produce an investment return very similar to that of the Index. Becton, Dickinson and Company Common Stock Fund: A fund which is comprised entirely of the Company's common stock. Balanced Fund: A balanced fund comprised of fixed income securities, common stocks and convertible securities. MidCap Index Fund: A diversified portfolio of common stocks and securities convertible into common stock that make up the S&P MidCap 400 Stock Index. These stocks represent companies whose total market values are generally below those of the stocks in the S&P 500 Index. The fund seeks greater capital appreciation than the S&P 500 Index Fund, but with greater volatility. Employee contributions are invested, at the option of the employee, in the Fixed Income, the S&P 500 Index, the Becton, Dickinson and Company Common Stock, the Balanced and the MidCap Index Funds in any combination of 1%, with a maximum of 100% (50% prior to August 1, 1996) of the employee's contribution being contributed to the Becton, Dickinson and Company Common Stock Fund. The assets of the Fixed Income Fund are invested in contracts with various insurance companies, which provide known rates of return on deposited funds, provided that the contracts remain in force until their maturity. The weighted average yield for the investment contracts is 6.42% and 6.33% at June 30, 1997 and 1996, respectively. The crediting interest rates range from 5.28% to 7.27% at June 30, 1997 and 4.95% to 8.96% at June 30, 1996. Crediting interest rates are determined based on the balance and duration of the contract, with certain contracts subject to quarterly rate resets based on market indices. There are no minimum crediting interest rates or limitations on guarantees under the terms of the contracts. No valuation reserves have been established to adjust contract amounts. The fair value of the investment contracts recorded at contract value is approximately $150,405,000 at June 30, 1997. State Street Bank & Trust Company ("State Street Bank") is the Plan's Trustee. State Street Bank is also the investment manager of the S&P 500 Index Fund, the MidCap Index Fund and the Becton, Dickinson and Company Common Stock Fund. PRIMCO Capital Management Inc. is the investment manager of the Fixed Income Fund. Barclays Global Investors is the investment manager of the Balanced Fund. The assets of the Company Common Stock Fund are invested in shares of the Company's common stock. The Trustee has advised that its present intention is to purchase the Company's common stock exclusively on the open market. Contributions to the Company Common Stock Fund are comprised of both employee contributions, as well as employer matching contributions. For recordkeeping purposes, separate funds have been created to account for the respective contributions. These funds are referred to as Fund C for employer matching F-6 BECTON, DICKINSON AND COMPANY SAVINGS INCENTIVE PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) contributions and Fund D for employee contributions. Funds C and D have been combined into one investment fund, referred to as the Becton, Dickinson and Company Common Stock Fund, for financial statement purposes. Any portion of the Funds, pending permanent investment or distribution, may be held on a short-term basis in cash or cash equivalents. The Company implemented an Employee Stock Ownership Plan (ESOP) whereby the Becton, Dickinson and Company Preferred Stock Fund was created to account for employer matching contributions being invested in convertible preferred stock on behalf of employees. Refer to Note 6. The Plan also has a loan provision whereby employees are allowed to take loans on their vested account balances. Loans bear a rate of interest which is set annually and employees are required to pay installment payments at each payroll date. The outstanding balance of a loan becomes due and payable upon an employee's termination. Should an employee, upon his termination, elect not to repay the outstanding balance, the loan is canceled and deemed a distribution under the Plan. The Plan provides for vesting in employer matching contributions based on months of participation as follows:
FULL MONTHS OF PARTICIPATION PERCENTAGE ---------------------------- ---------- Less than 24 months........................................... 0% 24 but less than 36 months.................................... 50% 36 but less than 48 months.................................... 75% 48 months or more............................................. 100%
Any participating employee with 5 or more years of service regardless of months of participation will have a 100% vested percentage in the Company's matching contributions. Also, participants may become fully vested on the date of termination of employment by reasons of death, retirement or disability, or attainment of age 65. Participants may be partially vested under certain conditions in the event of termination of employment or participation in the Plan for any other reason. Non-vested Company contributions forfeited by participants are applied to reduce future Company contributions. Participants' contributions are always 100% vested. The Board of Directors of the Company reserves the right to terminate, modify, alter or amend the Plan at any time and at its own discretion, provided that no such termination, modification, alteration or amendment shall permit any of the funds established pursuant to the Plan to be used for any purpose other than the exclusive benefit of the participating employees. The right to modify, alter or amend includes the right to change the percentage of the Company's contributions. Amounts allocated to withdrawn participants which have not yet been distributed from the Plan as of June 30, 1997 and 1996 amounted to $5,562,000 and $3,486,000, respectively. For the purpose of preparing the Plan's Form 5500 such amounts are recorded as liabilities. F-7 BECTON, DICKINSON AND COMPANY SAVINGS INCENTIVE PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) 3. UNIT VALUES The number of units and unit values of each Fund at June 30, 1997 and 1996 were as follows:
NUMBER OF UNIT/SHARE UNITS/SHARES VALUE ------------ ----------- June 30, 1997: Fixed Income Fund................................ 19,243,372 $ 8.079041 S&P 500 Index Fund............................... 2,914,202 28.045943 Becton, Dickinson and Company Common Stock Fund.. 7,275,641 23.328037 Becton, Dickinson and Company Preferred Stock Fund............................................ 351,199 162.000000 Balanced Fund.................................... 10,277,335 1.757693 MidCap Index Fund................................ 8,748,582 1.840810 June 30, 1996: Fixed Income Fund................................ 19,905,658 $ 7.602081 S&P 500 Index Fund............................... 2,796,585 20.775974 Becton, Dickinson and Company Common Stock Fund.. 7,460,018 18.321405 Becton, Dickinson and Company Preferred Stock Fund............................................ 317,458 128.400000 Balanced Fund.................................... 8,516,878 1.424120 MidCap Index Fund................................ 7,955,621 1.493504
5,207,371 units and 2,068,270 units of the Company Common Stock Fund were allocated to participant accounts in Funds C and D, respectively, as of June 30, 1997. As of June 30, 1996, 5,764,712 units and 1,695,306 units of the Company Common Stock Fund were allocated to participant accounts in Funds C and D, respectively. In the Becton, Dickinson and Company Preferred Stock Fund, 351,199 and 317,458 of the total preferred shares of 873,698 and 903,868 held as of June 30, 1997 and 1996, respectively, were allocated to participant accounts. 4. INCOME TAX STATUS The Internal Revenue Service has ruled (December 30, 1994) that the Plan qualifies under Section 401(a) and 401(k) of the Internal Revenue Code (IRC) and is, therefore, not subject to tax under present income tax law. Once qualified, the Plan is required to operate in conformity with the IRC to maintain its qualification. The Plan Administrator is not aware of any course of action or series of events that have occurred that might adversely affect the Plan's qualified status. 5. RELATED PARTY TRANSACTIONS During the year ended June 30, 1997, the Plan purchased and distributed 231,184 shares and 258,281 shares, respectively, of the Company's common stock and recorded $1,716,907 in dividends on the common stock from the Company. In addition, the Plan distributed 30,170 shares of the Series B ESOP convertible preferred stock of the Company and recorded $3,399,857 in dividends on the preferred stock from the Company. 6. EMPLOYEE STOCK OWNERSHIP PLAN (ESOP) The Company maintains an Employee Stock Ownership Plan (ESOP) as part of the Savings Incentive Plan. The ESOP operates to satisfy all or part of the Company's obligation to match 50% of employees' contributions, up to a maximum of 3% of each participant's covered compensation. To accomplish this, the ESOP borrowed $60,000,000 in a private debt offering and used the proceeds to buy the Company's Series B ESOP convertible preferred stock. F-8 BECTON, DICKINSON AND COMPANY SAVINGS INCENTIVE PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) Each share of preferred stock has a guaranteed liquidation value of $59 per share and is convertible into 3.2 shares of the Company's common stock at a conversion price of $18.44 per share. The preferred stock pays an annual dividend of $3.835 per share which will be used by the ESOP, together with Company contributions to repay the ESOP borrowings. The allocated and unallocated shares at cost and market at June 30 were as follows:
JUNE 30, 1997 JUNE 30, 1996 ----------------------- ----------------------- ALLOCATED UNALLOCATED ALLOCATED UNALLOCATED ----------- ----------- ----------- ----------- Becton, Dickinson and Company Series B ESOP Convertible Preferred Stock: Number of shares............ 351,199 522,499 317,458 586,410 Cost........................ $20,720,725 $30,827,416 $18,730,016 $34,598,180 Market...................... 56,894,228 84,644,822 40,761,595 75,295,021
Over a 15 year period, the trust will repay the loan; and as the loan is gradually repaid, a portion of the preferred stock will be released and used to match participants' contributions in the Plan. The initial allocation of preferred stock to plan participants began in March 1990. Each year, a pre- determined number of preferred shares will be released and available to be allocated to participants' accounts. If the total value of the preferred shares released (as the ESOP loan is repaid) is not sufficient to fully match the participants' contributions, the remaining portion of the match will be made to the Company Common Stock Fund (Fund C). 7. DEBT OBLIGATIONS In connection with the Employee Stock Ownership Plan feature, the Plan issued $60,000,000 of ESOP notes in a private placement. The notes bear interest at 9.45% and are guaranteed by the Company. The notes, which are due July 1, 2004, require semi-annual interest payments and annual principal payments. The aggregate annual maturities of the debt obligations during the years ended June 30, 1998 to 2002 are as follows: 1998--$4,023,000; 1999-- $4,422,000; 2000--$4,861,000; 2001--$5,343,000 and 2002--$5,873,000. 8. SUBSEQUENT EVENT On September 23, 1997, the Board of Directors of Becton, Dickinson and Company passed a resolution to amend the Plan effective January 1, 1998, to increase, from 16% to 20%, the percentage of total pay that may be contributed by employees. F-9 BECTON, DICKINSON AND COMPANY SAVINGS INCENTIVE PLAN ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES JUNE 30, 1997
IDENTITY OF ISSUE, BORROWER, LESSOR OR NUMBER CONTRACT SIMILAR OF UNITS OR FAIR PARTY AND DESCRIPTION OF INVESTMENT OR SHARES COST VALUE -------------------------------------- --------- ------------ ------------ STATE STREET BANK & TRUST COMPANY *Becton, Dickinson and Company Common Stock..................................... 3,358,931 $ 40,165,998 $170,045,863 STATE STREET BANK & TRUST COMPANY *Becton, Dickinson and Company Series B ESOP Convertible Preferred Stock.......... 873,698 51,548,141 141,539,050 STATE STREET BANK & TRUST COMPANY S&P 500 Flagship Index Fund................ 561,403 41,764,079 80,850,400 STATE STREET BANK & TRUST COMPANY MidCap Index Fund.......................... 524,824 11,520,994 15,939,941 BARCLAYS GLOBAL INVESTORS Commingled Fund............................ 987,486 12,315,395 17,295,264 ALLSTATE LIFE INSURANCE COMPANY GIC #GA/5483A, due 7/28/98, at 5.85%....... 3,685,169 3,685,169 GIC #GA/5537A, due 4/1/98, at 5.35%........ 3,013,773 3,013,773 GIC #GA/5506A, due 9/16/98, at 5.73%....... 3,526,408 3,526,408 GIC #GA/31028, due 2/15/02, at 6.06%....... 6,422,995 6,422,995 CAISSE DES DEPOTS BR-239-01, due 5/31/00, at 6.08%........... 1,872,027 1,872,027 THE CANADA LIFE ASSURANCE COMPANY GIC #P/45685, due 11/25/97, at 6.75%....... 4,136,125 4,136,125 HARTFORD LIFE INSURANCE COMPANY GIC #GA/10120, due 8/2/99, at 7.27%........ 6,089,486 6,089,486 JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY GIC #GA/7238, due 11/12/98, at 5.59%....... 6,141,723 6,141,723 GIC #GA/7433, due 5/1/04, at 7.01%......... 14,284,563 14,284,563 METROPOLITAN LIFE INSURANCE COMPANY GIC #GA/13669, due 2/15/99, at 5.61%....... 12,063,270 12,063,270 GIC #GA/13817, due 1/2/01, at 6.55%........ 11,128,193 11,128,193 NEW YORK LIFE INSURANCE COMPANY GIC #GA/06487002, due 9/2/97, at 6.00%..... 5,225,206 5,225,206 GIC #GA/20038/18D, due 9/30/98, at 5.28%... 2,501,143 2,501,143 PROVIDENT LIFE AND ACCIDENT GIC #630/05752, due 7/2/01, at 7.16%....... 17,006,989 17,006,989 PROVIDIAN CAPITAL MANAGEMENT #BDA00027TR1, due 6/15/04, at 6.97%........ 24,541,124 24,541,124 SECURITY LIFE OF DENVER INSURANCE COMPANY GIC #FR108, due 9/28/97, at 5.96%.......... 5,773,721 5,773,721 STATE STREET BANK AND TRUST GIC #96034, due 12/31/00, at 5.26%......... 16,593,121 16,593,121
F-10 BECTON, DICKINSON AND COMPANY SAVINGS INCENTIVE PLAN ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED)
IDENTITY OF ISSUE, BORROWER, LESSOR OR NUMBER CONTRACT SIMILAR OF UNITS OR FAIR PARTY AND DESCRIPTION OF INVESTMENT OR SHARES COST VALUE -------------------------------------- --------- ------------ ------------ TRANS AMERICA LIFE INSURANCE AND ANNUITY COMPANY GIC #76572, due 11/15/04, at 6.11%........ $ 5,098,926 $ 5,098,926 ------------ ------------ Total investments......................... 306,418,569 574,774,480 Loans receivable from participants (original loan amounts ranging from $1,000 to $50,000 bearing interest at rates ranging from 7% to 11.5%).......... 12,829,334 12,829,334 ------------ ------------ $319,247,903 $587,603,814 ============ ============
- -------- * As Becton, Dickinson and Company is the plan sponsor, these represent party- in-interest transactions. F-11 BECTON, DICKINSON AND COMPANY SAVINGS INCENTIVE PLAN ITEM 27D--SCHEDULE OF REPORTABLE TRANSACTIONS YEAR ENDED JUNE 30, 1997
TOTAL NUMBER OF AGGREGATE AGGREGATE GAIN DESCRIPTION PURCHASES VALUE OF VALUE OF OR IDENTITY OF PARTY INVOLVED OF ASSETS OR SALES PURCHASES SALES (LOSS) -------------------------- ----------- --------- ----------- ---------- ------ CATEGORY (III)--SERIES OF TRANSACTIONS IN EXCESS OF 5% Purchases: State Street Bank and Trust Company GIC #96034................ GIC 6 $20,685,259 Sales: State Street Bank and Trust Company GIC #96034................ GIC 1 $4,092,138
- -------- There were no category (i), (ii), or (iv) reportable transactions during 1997. F-12 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE MEMBERS OF THE SAVINGS INCENTIVE PLAN COMMITTEE HAVE DULY CAUSED THIS ANNUAL REPORT TO BE SIGNED BY THE UNDERSIGNED HEREUNTO DULY AUTHORIZED. Becton, Dickinson and Company Savings Incentive Plan /s/ Gerald Caporicci _____________________________________ GERALD CAPORICCI MEMBER, SAVINGS INCENTIVE PLAN COMMITTEE Date: December 18, 1997 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION METHOD OF FILING - ------- ----------- ---------------- 23 Consent of Independent Auditors Filed with this report