<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF
1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
BECTON, DICKINSON AND COMPANY
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
BECTON, DICKINSON AND COMPANY
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
_____________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_____________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
_____________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_____________________________________________________________________________
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form of Schedule and the date of its filing.
1) Amount Previously Paid:
_____________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
_____________________________________________________________________________
3) Filing Party:
_____________________________________________________________________________
4) Date Filed:
_____________________________________________________________________________
<PAGE>
RAYMOND V. GILMARTIN BECTON DICKINSON AND COMPANY
Chairman of the Board 1 Becton Drive
Franklin Lakes, New Jersey
07417-1880
LOGO
January 5, 1994
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
Becton, Dickinson and Company scheduled for 2:30 p.m. on Tuesday, February 8,
1994 at the Marriott Hotel in Saddle Brook, New Jersey.
The matters expected to be acted upon at the meeting are described in detail
in the attached Notice of Meeting and Proxy Statement.
It is important that your shares be represented at the meeting. Whether or
not you plan to attend personally, please complete and mail the enclosed proxy
card in the enclosed return envelope.
Sincerely,
/s/ RAYMOND V. GILMARTIN
Raymond V. Gilmartin
Chairman of the Board
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF
BECTON, DICKINSON AND COMPANY
1 BECTON DRIVE
FRANKLIN LAKES, NEW JERSEY 07417-1880
----------------
The Annual Meeting of Shareholders of BECTON, DICKINSON AND COMPANY will be
held at the Marriott Hotel, Garden State Parkway at Interstate 80, Saddle
Brook, New Jersey on Tuesday, February 8, 1994, at 2:30 P.M. to act upon the
following proposals:
1. Election of three directors to terms of three years.
2. Approval of the selection of independent auditors.
3. Approval of the 1994 Restricted Stock Plan for Non-Employee Directors.
4. A shareholder proposal relating to the disclosure of political
contributions.
5. Such other business as may properly come before the meeting.
Only shareholders of record at the close of business on December 13, 1993
will be entitled to vote at this meeting.
By order of the Board of
Directors,
/s/ RAYMOND P. OHLMULLER
Raymond P. Ohlmuller
Vice President and Secretary
Dated: January 5, 1994
<PAGE>
PROXY STATEMENT
----------------
BECTON, DICKINSON AND COMPANY
1 BECTON DRIVE
FRANKLIN LAKES, NEW JERSEY 07417-1880
----------------
GENERAL INFORMATION
The enclosed proxy/voting instruction card ("proxy") is solicited by the
Board of Directors of Becton, Dickinson and Company for the Annual Meeting of
Shareholders to be held at the Marriott Hotel, Garden State Parkway at
Interstate 80, Saddle Brook, New Jersey on Tuesday, February 8, 1994, at 2:30
P.M. A proxy may be revoked at any time before it is voted by sending written
notice of revocation to the Secretary of the Company, by executing a proxy
bearing a later date or by voting in person at the meeting. The proxy and this
proxy statement are being mailed to shareholders on or about January 5, 1994.
On December 13, 1993, the record date for determining shareholders entitled
to notice of and to vote at the meeting, there were 73,516,975 shares of the
Company's Common Stock (the "Common Stock") outstanding, each entitled to one
vote. In addition, on December 13, 1993 there were 981,382 shares of the
Company's Series B ESOP Convertible Preferred Stock (the "ESOP Preferred
Stock") outstanding, all of which are held by State Street Bank and Trust
Company, as Trustee of the Company's Savings Incentive Plan. The shares of ESOP
Preferred Stock are entitled to vote on all matters submitted to a vote of the
Company's shareholders and also carry one vote per share. Each employee
participating in the Savings Incentive Plan is entitled to instruct the Trustee
how to vote all shares of Common Stock and ESOP Preferred Stock allocated to
that employee's Savings Incentive Plan accounts. The enclosed proxy will serve
as voting instructions to the Trustee from Savings Incentive Plan participants.
Shares of each class of stock held in the Savings Incentive Plan for which
voting instructions are not received from Savings Incentive Plan participants
or which are not allocated to participants' accounts are voted by the Trustee
in the same proportion as shares of that class for which the Trustee has
received instructions.
Proxies representing shares of Common Stock held of record will also
represent shares held under the Company's Automatic Dividend Reinvestment Plan
and, in addition, will vote shares of Common Stock and ESOP Preferred Stock
allocated to employees' accounts under the Company's Savings Incentive Plan, if
the registrations are the same. Separate mailings will be made for shares not
held under the same registrations.
Directors are elected by a plurality of the votes cast at the meeting. The
approval of Proposals 2 and 4 each requires the affirmative vote of a majority
of the votes cast. Adoption of Proposal 3 requires the affirmative vote of a
majority of the shares present or represented by proxy at the meeting that are
entitled to vote. Since directors are elected by a plurality, abstentions and
broker non-votes will not have an impact on their election. Abstentions and
broker non-votes will not be counted in tabulating the number of votes cast on
Proposals 2 and 4, but will have the effect of votes cast against Proposal 3.
The Board of Directors is not aware of any matters to be presented at the
meeting other than those set forth in the accompanying notice. If any other
matters properly come before the meeting, the persons named in the proxy will
vote in accordance with their best judgment.
<PAGE>
In addition to solicitation by mail, directors, officers and other employees
of the Company may solicit proxies personally, by telephone or by telegram.
Brokers and other nominees will be requested to solicit proxies or
authorizations from beneficial owners and will be reimbursed for their
reasonable expenses in doing so. The Company has retained Hill and Knowlton,
Inc. to assist in soliciting proxies for a fee not to exceed $12,500 plus
expenses. The cost of soliciting proxies will be borne by the Company.
SHARE OWNERSHIP OF
MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
According to CDA Investment Technologies, Inc., a firm that monitors
institutional share ownership, as of September 30, 1993 Oppenheimer & Co.,
L.P., World Financial Center, New York, New York 10281, was the beneficial
owner of 12,402,991 shares of Common Stock, constituting 16.9% of the
outstanding Common Stock, and Cooke & Bieler Inc., 1700 Market Street,
Philadelphia, Pennsylvania 19103, was the beneficial owner of 5,563,300 shares
of Common Stock, constituting 7.6% of the outstanding Common Stock. No changes
in these holdings have come to the Company's attention since then. The Company
is not aware of any other beneficial owner of more than 5% of its Common
Stock.
The following tables set forth, as of October 31, 1993, information
concerning the beneficial ownership of Common Stock and ESOP Preferred Stock
by each director and nominee for director, each of the Company's executive
officers, and all directors and executive officers as a group, and the
beneficial owner of more than 5% of the outstanding ESOP Preferred Stock. No
director or executive officer owns more than 1% of the outstanding Common
Stock except Wesley J. Howe, who, including shares which may be acquired by
him within 60 days, is the beneficial owner of 1.3% of the Common Stock. All
directors and executive officers as a group are the beneficial owners of 3.1%
of the Common Stock, including shares which may be acquired by them within 60
days.
COMMON STOCK
<TABLE>
<CAPTION>
SHARES OWNED SHARES WHICH
DIRECTLY AND MAY BE ACQUIRED
NAME INDIRECTLY(1) WITHIN 60 DAYS(2)
---- ------------- -----------------
<S> <C> <C>
Harry N. Beaty........................... 2,000 0
Henry P. Becton, Jr. .................... 40,030(3) 0
Clateo Castellini........................ 12,100 184,000
Gerald M. Edelman........................ 1,490 0
Edmund B. Fitzgerald..................... 1,600 0
John W. Galiardo......................... 37,679 172,600
Raymond V. Gilmartin..................... 64,683 421,800
Richard W. Hanselman..................... 4,000 0
Thomas A. Holmes......................... 10,318 0
Wesley J. Howe........................... 541,910 385,000
William B. Macomber...................... 2,145 0
Walter M. Miller......................... 25,785 154,738
Frank A. Olson........................... 5,000 0
Robert A. Reynolds....................... 18,263 144,000
Gloria M. Shatto......................... 1,700 0
Raymond S. Troubh........................ 25,000(4) 0
All Directors and Executive Officers as a
group (16 persons)...................... 793,703 1,462,138
</TABLE>
- --------
(1) Includes Common Stock allocated to individual accounts under the Savings
Incentive Plan as follows: Mr. Castellini, 1,985 shares, Mr. Galiardo
4,107 shares, Mr. Gilmartin, 4,605 shares, Mr. Miller, 2,264 shares, Mr.
Reynolds, 3,852 shares; and all directors and executive officers as a
group, 16,813 shares.
2
<PAGE>
(2) Includes stock options available for exercise and shares to be
distributed under the Company's Stock Award Plan within 60 days.
(3) Includes 27,030 shares held by a trust of which Mr. Becton is a co-
trustee with shared investment and voting power and 13,000 shares held by a
corporation owned by the trust. Does not include 7,700 shares owned by Mr.
Becton's wife, 400 shares owned by a daughter or 20,660 shares held in trusts
for the benefit of his children, as to which he disclaims beneficial
ownership.
(4) Does not include 10,000 shares owned by Mr. Troubh's wife, as to which
he disclaims beneficial ownership.
ESOP PREFERRED STOCK
<TABLE>
<CAPTION>
SHARES OWNED
DIRECTLY AND
INDIRECTLY
------------
<S> <C>
Clateo Castellini........................................... 287(1)
John W. Galiardo............................................ 271(1)
Raymond V. Gilmartin........................................ 281(1)
Walter M. Miller............................................ 280(1)
Robert A. Reynolds.......................................... 241(1)
All Directors and Executive Officers as a group (16 per-
sons)...................................................... 1,360(1)
State Street Bank and Trust Company......................... 983,500(2)
225 Franklin Street
Boston, Massachusetts 02110
(as Trustee of the Savings Incentive Plan)
</TABLE>
- --------
(1) Shares allocated to individual accounts under the ESOP component of the
Savings Incentive Plan. Such shares constitute less than 1% of the total
beneficial ownership of the ESOP Preferred Stock.
(2) Constitutes 100% of the outstanding shares of ESOP Preferred Stock.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors to file initial reports of their ownership of
the Company's equity securities and reports of changes in such ownership with
the Securities and Exchange Commission (the "SEC") and the New York Stock
Exchange. Executive officers and directors are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on a review of the copies of such forms and written representations
from the Company's executive officers and directors, the Company believes that
for the period from October 1, 1992 through September 30, 1993, all of its
executive officers and directors were in compliance with the disclosure
requirements of Section 16(a), except that one transaction involving a gift
was inadvertently reported 15 days late by Henry P. Becton, Jr., a director of
the Company.
BOARD OF DIRECTORS
MEETINGS; CERTAIN COMMITTEES
The Board of Directors, which held seven meetings during the fiscal year
ended September 30, 1993, has seven standing committees, including the Audit
Committee, the Corporate Responsibility Committee, the Compensation and
Benefits Committee and the Committee on Directors, which serves as a
nominating committee. All directors attended more than 75 percent of the
aggregate of the total number of meetings of the Board and the committees on
which each director served, except for Wesley J. Howe, who did not do so due
to poor health.
The Audit Committee reviews and discusses the plan and results of the annual
audit with the Company's independent and internal auditors and approves non-
audit services provided by the independent auditors. This Committee also
reviews the Company's internal auditing, control and accounting systems. In
addition, this Committee makes recommendations to the Board concerning the
selection of independent auditors. The members of this Committee, which met
three times during the year, are Henry P. Becton, Jr., Chairman, Harry N.
Beaty, Gerald M. Edelman, William B. Macomber, Frank A. Olson and Raymond S.
Troubh.
3
<PAGE>
The Corporate Responsibility Committee reviews the Company's policies and
procedures affecting its role as a responsible corporate citizen, including
those relating to issues such as equal employment opportunity and community
relations, to health, safety and environmental matters, and to proper business
practices. The members of this Committee, which met once during the year, are
Gerald M. Edelman, Chairman, Harry N. Beaty, Edmund B. Fitzgerald, Raymond V.
Gilmartin, William B. Macomber and Gloria M. Shatto.
The Compensation and Benefits Committee fixes the compensation of corporate
officers and approves any employment or consulting contracts with corporate
officers who are not also directors. This Committee also reviews and makes
recommendations to the Board concerning proposed contracts with directors. In
addition, it administers the Company's stock option plans and the Stock Award
Plan. This Committee also oversees the administration of employee benefits and
benefit plans for the Company. The members of this Committee, which met four
times during the year, are Thomas A. Holmes, Chairman, Edmund B. Fitzgerald,
Richard W. Hanselman, Frank A. Olson and Raymond S. Troubh.
The Committee on Directors recommends candidates for election as directors to
the Board. It also reviews and makes recommendations concerning the
composition, organization and function of the Board and its committees, as well
as on the performance and compensation of directors. The members of this
Committee, which met twice during the year, are Richard W. Hanselman, Chairman,
Henry P. Becton, Jr., Raymond V. Gilmartin, Thomas A. Holmes, Wesley J. Howe
and William B. Macomber.
Any shareholder may recommend nominees for director to the Committee on
Directors by writing to the Secretary of the Company. Submissions should
include the full name and address and a statement of the qualifications of the
proposed nominee.
DIRECTORS' FEES
Each director who is not employed by the Company receives an annual retainer
of $40,000 for Board service plus attendance fees of $1,000 for special
meetings of the Board and $650 for committee meetings. An annual retainer of
$2,000 is also paid to committee chairmen. Directors may defer all or part of
their annual retainers until they retire from the Board or their principal
occupations. In addition, Gerald M. Edelman was engaged by the Company during
the fiscal year as a consultant in the fields of cell biology and solid tissue
diagnostics. The Company paid Dr. Edelman a fee of $50,000 for his consulting
services.
After resignation or retirement from the Board, a qualifying director is
eligible to serve as a consultant for a term equal to his or her service on the
Board at an annual fee equal to the retainer paid to active non-employee
directors. To qualify, a director must serve on the Board for five years, and,
if employed by the Company, must either continue as an employee and a director
until age 60, unless termination of employment is by reason of disability, or
be reelected a director by the shareholders after termination of employment.
4
<PAGE>
PROPOSAL 1. ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, the terms of which
expire alternately over a three-year period. The Board proposes the election of
three directors to serve for three years until the 1997 Annual Meeting and
until their successors have been elected and have qualified. The candidates,
Harry N. Beaty, Raymond V. Gilmartin and Frank A. Olson, are incumbent
directors who were elected to their present terms by the shareholders.
NOMINEES FOR DIRECTOR--TERM TO EXPIRE 1997
(ART) Harry N. Beaty, M.D., 61, has been a director since 1985.
He is a Professor of Medicine and Dean of the
Northwestern University Medical School. Dr. Beaty is a
specialist in internal medicine and a subspecialist in
infectious diseases. He is a director of HealthTrust,
Inc.
(ART) Raymond V. Gilmartin, 52, has been a director since 1984,
Chairman of the Board since November 1992, Chief
Executive Officer since 1989 and President since 1987.
Mr. Gilmartin is a director of Capital Holding Corp. and
Public Service Enterprise Group Inc.
(ART) Frank A. Olson, 61, has been a director since 1985. He is
Chairman of the Board and Chief Executive Officer of The
Hertz Corporation, a transportation company. Mr. Olson is
a director of Cooper Industries, Inc., Commonwealth
Edison Co., The Hertz Corporation and UAL Corporation.
5
<PAGE>
CONTINUING DIRECTORS
The directors listed below were elected by the shareholders to terms expiring
in 1995 and 1996, respectively, and will continue to serve.
TERM TO EXPIRE 1995
(ART) Henry P. Becton, Jr., 50, has been a director since 1987.
He is President and General Manager of WGBH Educational
Foundation. WGBH is a producer and broadcaster of public
television and radio programs. It also produces books and
other educational materials. Mr. Becton is a director of
various Scudder mutual funds.
(ART) Gerald M. Edelman, M.D., Ph.D., 64, has been a director
since 1982. He is a Member of the Scripps Research
Institute, Chairman of its Department of Neurobiology,
and Director of The Neurosciences Institute. His research
is concerned with the developmental biology of the brain.
Dr. Edelman is a director of General American Investors
Co., Inc.
(ART) Edmund B. Fitzgerald, 67, has been a director since 1990.
He is an Adjunct Professor at the Owen Graduate School of
Management at Vanderbilt University. Previously, he was
Chairman of the Board and Chief Executive Officer of
Northern Telecom Ltd., a manufacturer of digital
telecommunications equipment, from 1985 to 1990 and
President from 1982 to 1985. He is a director of Northern
Telecom Ltd., Ashland Oil, Inc. and GTI Corp.
(ART) Richard W. Hanselman, 66, has been a director since 1981.
He is a corporate director. Mr. Hanselman was Chairman of
the Board, President and Chief Executive Officer of
Genesco, Inc., a diversified manufacturer of footwear and
apparel, prior to 1986. Mr. Hanselman is a director of
Arvin Industries, Inc., Bradford Funds, Inc., Foundation
Health Corp., Gryphon Holdings Inc., HealthTrust, Inc.
and IMCO Recycling, Inc.
6
<PAGE>
TERM TO EXPIRE 1996
(ART) Thomas A. Holmes, 70, has been a director since 1986.
Prior to his retirement in 1988, Mr. Holmes was Chairman
of the Board, President and Chief Executive Officer of
Ingersoll-Rand Company, a manufacturer of industrial
machinery and related products. He is a director of Arvin
Industries, Inc., W.R. Grace & Co., Newmont Gold Co. and
Newmont Mining Corp.
(ART) Gloria M. Shatto, 62, has been a director since 1986. She
is President of Berry College. She is a director of
Georgia Power Co., K Mart Corp., The Southern Company and
Texas Instruments Inc.
(ART) Raymond S. Troubh, 67, has been a director since 1977. He
is a financial consultant and Senior Advisor to Salomon
Brothers, Inc. Mr. Troubh is a director of ADT Ltd.,
American Maize-Products Co., Applied Power Inc., Benson
Eyecare Corp., Foundation Health Corp., General American
Investors Co., Inc., Manville Corp., Olsten Corp.,
Riverwood International Corp., Time Warner, Inc. and
Wheeling-Pittsburgh Corp.
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION AND BENEFITS COMMITTEE
ON EXECUTIVE COMPENSATION
The compensation of the Company's executive officers is determined by the
Compensation and Benefits Committee of the Board of Directors. The Committee
has five members, each of whom is a non-employee director independent of
management. No member of the Committee has any insider or interlocking
relationship with the Company, as these terms are defined in applicable rules
and regulations of the SEC.
COMPENSATION PHILOSOPHY
The Company's executive compensation philosophy is to align the interests of
executive management with shareholder interests through compensation programs
linked to growth in shareholder value, principally measured by stock price
performance. The Committee determines a total compensation structure for each
executive officer, including the Chief Executive Officer, Mr. Gilmartin,
7
<PAGE>
focused primarily upon base salary, annual incentive bonus and stock options.
Base salary levels and annual incentive bonus targets are set to approximate
median levels expected for companies of comparable size and business activity.
Stock option grant levels and terms are established to provide opportunity for
compensation levels at the higher end of the range for comparable positions in
the marketplace, if management is successful in achieving long-term growth in
shareholder value. As a consequence, compensation packages for the Company's
executive officers are more heavily weighted toward performance-based
compensation (stock options plus annual incentive bonuses) than the norm.
Compensation decisions are supported by analysis of published surveys and
periodic special studies. Primary emphasis is placed upon prevailing practice
by medical products manufacturing and technology companies, taking account of
differentials in company size; considerable weight is also given to the general
practice in U.S. industry among companies of comparable size.
PRINCIPAL COMPENSATION ELEMENTS
The principal elements of executive compensation at the Company are base
salary, annual incentive bonus, and stock options.
BASE SALARY levels are reviewed annually, and adjusted as appropriate to
reflect market position and individual performance. Base salaries for Mr.
Gilmartin and the other executive officers are set to approximate median levels
for executives with similar roles and responsibilities in companies of
comparable size, industry and complexity.
ANNUAL INCENTIVE BONUSES are awarded annually under the Company's Executive
Bonus Plan. Bonus targets are set to approximate median levels for executives
with similar roles and responsibilities in comparable companies. Annual bonus
awards for each of the Company's executive officers are approved by the
Committee. The Executive Bonus Plan sets forth specific formulas and factors to
be used in assessing each executive officer's financial and strategic
performance during the fiscal year for purposes of determining his annual award
under the Executive Bonus Plan. These factors stress annual performance in
achieving earnings levels that meet or exceed annual budgets, and concrete
accomplishments in improving the Company's competitive position.
Bonus awards for Messrs. Gilmartin, Galiardo and Reynolds are based
principally (75%) upon the Company's reported earnings per share compared to
annual growth targets established in concurrence with the Board. Additional
weight (25%) is given to each individual's specific accomplishments during the
year toward achieving the Company's long-term strategic objectives. Bonus
awards for Messrs. Castellini and Miller are based principally (50%) upon the
operating income generated by their respective business Sectors compared to
targets incorporated in the annual budget approved by the Board. Additional
weight (25%) is given to the Company's overall earnings per share performance
and to strategic accomplishments (25%). In all cases, there are minimum
thresholds of overall Company (and, where applicable, Sector) financial
performance that must be achieved before any bonus is paid for a particular
fiscal year.
STOCK OPTIONS are awarded each year by the Committee to executive officers in
accordance with the Company's 1990 Stock Option Plan, as applied to the
executive officers through the SENIOR EXECUTIVE OPTION POLICY adopted by the
Committee in May 1990. THE SENIOR EXECUTIVE OPTION POLICY established an
indexed stock option program intended to compensate executive officers both for
absolute growth in shareholder value and for relative Company Common Stock
price performance compared to the performance of the "Standard and Poor's 500
Composite Stock Price Index" (the "S&P 500 Index").
8
<PAGE>
The Committee believes this program for annual option grants to the executive
officers provides a strong incentive to achieve a pattern of sustainable
performance which increases shareholder value and to surpass the average return
available to investors as represented by the S&P 500 Index. As a part of this
program, the executive officers are no longer eligible for grants under the
Company's Stock Award Plan, and have not received any grants under that Plan
since 1990.
This stock option program provides for the annual grant through 1994 to each
of the executive officers of a specified minimum number of nonqualified options
with exercise prices which are to be indexed to the change from May 21, 1990 in
the S&P 500 Index. On that date, the mean of the high and low of the Company's
Common Stock price (the "fair market value") was $31.565 and the S&P 500 Index
closed at 358.00. To the extent that changes in the per share price of the
Company's Common Stock from that date outperform the S&P 500 Index, the
exercise price of future option grants would be set at a discount from the
Common Stock's fair market value on the date of grant. Conversely, to the
extent the Company's Common Stock does not perform as well as the S&P 500
Index, such future grants would have an exercise price greater than the fair
market value of the Company's Common Stock on the date of each grant.
Each annual grant is exercisable for a period of ten years from the date of
grant. The maximum potential value of each grant will be realized by achieving
sustained favorable Company performance throughout this period and by deferring
exercise until the latter portion of the ten-year exercise period.
The following table summarizes the relative performance of the S&P 500 Index
and the Company's per-share price since the inception of this policy in May
1990, and the impact upon stock option grant price levels for the 1991, 1992
and 1993 grants. On May 24, 1993, the executive officers were granted options
at an exercise price of $39.50 per share, which was above the $37.25 per share
fair market value on that date. This premium over the current market price
creates an additional incentive to achieve stock price growth in the future.
<TABLE>
<CAPTION>
(5/21) (5/21) (5/19) (5/24)
1990 1991 1992 1993
------- ------- ------- ------
<S> <C> <C> <C> <C>
S&P 500 Index.................................. 358.00 375.35 416.37 448.00
Company Per-Share Market Value................. $31.565 $38.78 $35.845 $37.25
Senior Executive Option Policy
Grant Price.................................. $31.565 $33.095 $36.71 $39.50
Discount/(Premium)............................. -0- $ 5.685 $(0.865) $(2.25)
</TABLE>
1993 COMPENSATION ACTIONS: MR. GILMARTIN
Mr. Gilmartin participates in the same executive compensation programs
provided to the other executive officers. His compensation targets and mix are
even more heavily weighted towards performance-based compensation, specifically
annual incentive bonus and indexed stock options, to emphasize the link between
changes in shareholder value and his compensation as Chief Executive Officer.
During the past year Mr. Gilmartin was elected by the Board to the additional
post of Chairman of the Board, upon the retirement of Wesley J. Howe. He
retained his other positions of Chief Executive Officer and President. The
Committee has adjusted Mr. Gilmartin's base salary and target bonus under the
Executive Bonus Plan to a level it considers to be at the median of the market
compensation for individuals serving as Chairman and Chief Executive Officer in
companies of comparable size, industry and complexity.
Mr. Gilmartin received an award of 60,000 stock options in May 1993 in
accordance with the Senior Executive Option Policy. The Company believes that
these options represent the most valuable
9
<PAGE>
component of his compensation, and they are the exclusive vehicle now used to
award long-term compensation to Mr. Gilmartin. By relying solely upon stock
option grants indexed to the performance of the S&P 500, the Committee believes
it is providing Mr. Gilmartin significant incentive to take actions to achieve
sustained, long-term increases in shareholder value that are superior to the
average performance of the market.
The Committee authorized an annual incentive bonus award of $420,000 for Mr.
Gilmartin for fiscal 1993, which represents a full target award. In the
Committee's judgment, the Company's earnings per share performance was
consistent with budget expectations, and overall strategic accomplishments were
in accordance with the Company's business plan.
1993 COMPENSATION ACTIONS: OTHER EXECUTIVE OFFICERS
Indexed stock options under the Senior Executive Option Policy are the most
significant element of compensation for the Company's executive officers.
During fiscal 1993, each of the executive officers received an additional grant
consistent with the terms of this program. This is the exclusive vehicle used
to award long-term compensation to this group.
Over the past few years each of the executive officers has received salary
adjustments to bring his base salary level in line with median market practice
for executives with similar responsibilities in companies of comparable size,
industry and complexity. The Committee believes this level has been
substantially achieved with the salary increases (average increase 5%) that
were approved and took effect for the executive officers during the fiscal
year.
The Committee authorized annual incentive bonus awards for the executive
officers that ranged from zero to 110% of target. In one case, financial
performance versus budget was below the threshold level required. The other
awards, all of which exceeded target, reflected financial performance
consistent with the applicable budget and significant strategic
accomplishments.
The tables and graphs following this report set forth information on the
compensation for the Company's five executive officers (the "named
executives").
COMPENSATION AND BENEFITS COMMITTEE
THOMAS A. HOLMES, CHAIRMAN
EDMUND B. FITZGERALD RICHARD W. HANSELMAN
FRANK A. OLSON RAYMOND S. TROUBH
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COMPENSATION OF NAMED EXECUTIVES
GENERAL
The following table shows, for the fiscal years ended September 30, 1991,
1992 and 1993, compensation provided by the Company to each of the named
executives in all capacities in which they served.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
---------------------
ANNUAL COMPENSATION AWARDS
-------------------------------------------- ---------------------
OTHER RESTRICTED
NAME AND FISCAL ANNUAL STOCK OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY(A) BONUS(A) COMPENSATION(B)(C) AWARDS(D) SARS(D)(E) COMPENSATION(B)(F)
- ------------------ ------ --------- -------- ------------------ ---------- ---------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Raymond V. Gilmartin 1993 $629,167 $420,000 0 0 60,000 $29,388
President and Chief 1992 575,000 250,000 -- 0 60,000 --
Executive Officer 1991 515,000 240,000 -- 0 60,000 --
Clateo Castellini 1993 312,500 165,000 0 0 36,000 21,086
Sector President-- 1992 285,000 100,000 -- 0 36,000 --
Medical 1991 255,000 95,000 -- 0 36,000 --
John W. Galiardo 1993 271,083 115,000 0 0 30,000 18,738
Vice President and 1992 255,333 93,000 -- 0 30,000 --
General Counsel 1991 235,667 83,000 -- 0 30,000 --
Walter M. Miller 1993 302,500 0 0 0 36,000 6,891
Sector President-- 1992 270,833 90,000 -- 0 36,000 --
Diagnostic 1991 240,000 84,000 -- 0 36,000 --
Robert A. Reynolds 1993 245,000 105,000 0 0 30,000 16,171
Vice President-- 1992 226,667 85,000 -- 0 30,000 --
Finance and Controller 1991 206,667 75,000 -- 0 30,000 --
</TABLE>
- --------
(A) Amounts shown reflect salary and bonuses earned by the named executives
for the applicable fiscal year. Bonuses are paid in the fiscal year
following the fiscal year for which they are earned, unless deferred at
the election of the executive.
(B) Information for fiscal years ending prior to December 15, 1992 has been
omitted in accordance with the rules and regulations of the SEC.
(C) None of the named executives received perquisites and other personal
benefits exceeding the lesser of $50,000 or 10% of each named executive's
annual salary and bonus.
(D) The named executives have not been eligible for further awards under the
Company's Stock Award Plan since the adoption of the Senior Executive
Option Policy in May 1990. The following table contains information
relating to the outstanding holdings of restricted stock of the named
executives, which all relate to undistributed portions of awards granted
under the Stock Award Plan in 1990 and preceding years.
<TABLE>
<CAPTION>
CURRENT MARKET
NUMBER OF VALUE OF
RESTRICTED RESTRICTED
NAME SHARES HELD SHARES HELD
---- ----------- --------------
<S> <C> <C>
Raymond V. Gilmartin............ 19,502 $733,763
Clateo Castellini............... 11,458 431,107
John W. Galiardo................ 10,602 398,900
Walter M. Miller................ 8,264 310,933
Robert A. Reynolds.............. 17,842 671,305
</TABLE>
Under the terms of the Stock Award Plan, most of these holdings (stated as a
percentage of each named executive's total holdings) may not be distributed
until retirement or termination of employment: 15,602 (80%) for Mr.
Gilmartin; 9,978 (87%) for Mr. Castellini; 9,252 (87%) for Mr. Galiardo;
6,704 (81%) for Mr. Miller; and 16,612 (93%) for Mr. Reynolds.
Values are determined by multiplying the number of undistributed shares by
$37.625, the September 30, 1993 closing price for the Company's Common
Stock. No discount has been taken to reflect (1) the continuing restrictions
on distribution and transferability, or (2) the fact that undistributed
shares are not dividend-bearing.
11
<PAGE>
(E) All option grants shown are awarded in accordance with the Senior
Executive Option Policy described above. As a result, each option grant
reflects a discount (or premium) to current market value, depending upon
the Company's cumulative share price growth compared to the S&P 500 Index,
as follows:
1993 ($2.25) per share premium
1992 ($0.865) per share premium
1991 $5.685 per share discount
(F) Amounts shown represent the sum of (1) the Company's matching
contributions to the Company's Savings Incentive Plan, a qualified defined
contribution plan available to U.S. employees at all levels, and (2) the
dollar value of split-dollar life insurance policies provided for each of
the named executives.
During the fiscal year the Company made contributions to the Savings
Incentive Plan of $7,075 for Mr. Gilmartin, $6,624 for Mr. Castellini,
$7,019 for Mr. Galiardo, $6,891 for Mr. Miller, and $7,258 for Mr. Reynolds.
These amounts represent Company matching contributions at a 50% rate of the
first 6% of base pay contributed to the Plan by each of the named
executives, in accordance with applicable Plan rules and subject to limits
imposed by the Internal Revenue Code upon maximum contributions to such tax-
qualified plans.
The Company has made a split-dollar life insurance policy available to the
named executives in lieu of full participation in the Company's group life
insurance program. The death benefit payable to the beneficiary of an
insured named executive is two times that executive's base salary. Under
this split-dollar arrangement, the premiums are paid by the Company in a
fixed time period during the initial years in which the policies are in
effect. If assumptions about mortality, dividends and other factors are
realized, the Company will recover all of its payments for premiums from the
cash value of the policy at the later of a designated period or retirement
of the named executive. Full ownership of the policy will be transferred to
the named executive at that time. The premiums paid on behalf of each named
executive during fiscal 1993 have been prorated to reflect the current value
of term life insurance coverage for the fiscal year plus the deferred
reimbursement to the Company of the premium payments. The compensatory
portion of the premium payments for each named executive during the year was
$22,313 for Mr. Gilmartin, $14,462 for Mr. Castellini, $11,719 for Mr.
Galiardo, $0 for Mr. Miller, and $8,913 for Mr. Reynolds.
STOCK OPTION GRANTS
The following table contains information relating to stock option grants and
tandem stock appreciation rights ("SARs") made in fiscal 1993 under the
Company's 1990 Stock Option Plan and the Senior Executive Option Policy
described above.
OPTION/SAR GRANTS IN 1993
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------
% OF TOTAL
OPTIONS/SARS GRANT
OPTIONS/ GRANTED TO DATE
SARS EMPLOYEES IN EXERCISE EXPIRATION PRESENT
NAME GRANT (A) FISCAL YEAR PRICE (B) DATE VALUE (C)
---- --------- ------------ --------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Raymond V. Gilmartin..... 60,000 5.7% $39.50 5/23/03 $757,200
Clateo Castellini........ 36,000 3.4% 39.50 5/23/03 454,320
John W. Galiardo......... 30,000 2.8% 39.50 5/23/03 378,600
Walter M. Miller......... 36,000 3.4% 39.50 5/23/03 454,320
Robert A. Reynolds....... 30,000 2.8% 39.50 5/23/03 378,600
--------- ------
TOTAL.................... 192,000 18.1% N.A. N.A. N.A.
All Optionees............ 1,054,764 100.0% 38.41 5/23/03 N.A.
</TABLE>
- --------
(A) All option grants to the named executives are for a ten-year term. They
are exercisable immediately, subject to applicable rules and regulations
of the SEC. These option grants are issued in tandem with limited SARs,
exercisable only in the event of a tender offer for the Company's Common
Stock or a change in control of the Company, as defined under the
Company's 1990 Stock Option Plan.
(B) Option grants to the named executives are in accordance with the terms of
the Senior Executive Option Policy described above. The exercise price of
$39.50 represents a premium of $2.25 over the fair market value of Company
Common Stock on May 24, 1993 (the date of the grant).
During the fiscal year the Company awarded 862,764 option grants to other
participants in its stock option programs as follows: 136,220 on May 24,
1993 at an exercise price of $37.25 and 726,544 on January 25, 1993 at an
exercise price of $38.625. The weighted average exercise price of these
grants is $38.41.
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<PAGE>
(C) This estimate of value has been developed solely for purposes of
comparative disclosure in accordance with the rules and regulations of the
SEC, and does not necessarily reflect the Company's view of the
appropriate value or methodology for purposes of financial reporting. The
estimated value has been determined by application of the Black-Scholes
option pricing model, based upon the terms of the option grant and the
Company's stock price performance history as of the date of grant (May 24,
1993). The key assumptions set forth below used in the valuation are based
upon historical experience, and are not a forecast of future stock price
performance or volatility or of future dividend policy. No adjustments
have been made for forfeitures or nontransferability.
Dividend Yield: 1.66%
Volatility: 0.04148
Risk-free Rate of Return: 5.930%
Expected Exercise Period: 10 years
STOCK OPTION EXERCISES
The following table contains information relating to the exercise of stock
options by the named executives in fiscal 1993 as well as the number and value
of their unexercised options as of September 30, 1993.
AGGREGATED OPTION/SAR EXERCISES IN 1993 AND
FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
VALUE REALIZED NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES (MARKET VALUE OPTIONS AT FISCAL OPTIONS/SARS AT FISCAL
ACQUIRED LESS ANY YEAR-END YEAR-END
NAME ON EXERCISE EXERCISE PRICE) (ALL EXERCISABLE) (B) (ALL EXERCISABLE) (A)(B)
---- ----------- --------------- --------------------- ------------------------
<S> <C> <C> <C> <C>
Raymond V. Gilmartin.... 9,952 $288,671 421,800 $2,319,889
Clateo Castellini....... 2,000 52,785 184,000 900,716
John W. Galiardo........ 12,000 378,555 172,600 856,629
Walter M. Miller........ 6,000 86,557 154,738 501,951
Robert A. Reynolds...... 5,600 166,516 144,000 665,421
</TABLE>
- --------
(A) The value of unexercised options represents the difference between the
closing price of the Company's Common Stock on September 30, 1993
($37.625), and the exercise price of each unexercised option held by the
named executives with an exercise price of less than $37.625.
(B) All option grants to the named executives are for a ten-year term. They
are exercisable immediately, subject to applicable rules and regulations
of the SEC. These option grants are issued in tandem with limited SARs,
exercisable only in the event of a tender offer for the Company's Common
Stock or a change in control of the Company, as defined under the
Company's 1990 Stock Option Plan.
RETIREMENT PLAN
The Company's Retirement Plan (the "Retirement Plan") is a non-contributory
defined benefit plan. It provides for normal retirement at age 65 and permits
earlier retirement in certain cases. Benefits are based upon years of service
and compensation (including salary, commissions, bonuses and stock award
distributions ("Covered Compensation")) for the five consecutive calendar
years which produce the highest average compensation ("Maximum Average
Compensation"). The Retirement Plan is integrated with Social Security.
The Internal Revenue Code of 1986, as amended (the "Code") limits the
maximum annual benefit which may be paid to any individual from the Retirement
Plan's trust fund and the amount of compensation that may be recognized. Under
the Company's Retirement Benefit Restoration Plan (the "Restoration Plan"),
the Company will make supplemental, unfunded payments to offset any reductions
in benefits which may result from such limitations. The Company's obligations
to pay retirement benefits under the Restoration Plan and separate agreements
with certain key employees of the Company (including the named executives), as
well as deferred amounts under the Executive Bonus Plan, are secured by a
trust. The trust is currently secured by a letter of credit. The trustee is
required to draw on the letter of credit, up to specified limits, following a
change in control of the Company (as defined in the trust agreement).
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<PAGE>
The table below shows the estimated annual retirement benefits payable under
the Retirement Plan and the Restoration Plan at normal retirement date to all
eligible employees, including the named executives, in specified remuneration
and years of service classifications.
ESTIMATED ANNUAL RETIREMENT BENEFITS
<TABLE>
<CAPTION>
MAXIMUM YEARS OF CREDITED SERVICE
AVERAGE -------------------------------------------------------------
COMPENSATION 10 15 20 25 30 35 40
- ------------ -------- ------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 200,000 $ 28,916 $43,374 $ 57,832 $ 72,290 $ 86,748 $101,206 $115,664
300,000 43,916 65,874 87,832 109,790 131,748 153,706 175,664
400,000 58,916 88,374 117,832 147,290 176,748 206,206 235,664
500,000 73,916 110,874 147,832 184,790 221,748 258,706 295,664
600,000 88,916 133,374 177,832 222,290 266,748 311,206 355,664
700,000 103,916 155,874 207,832 259,790 311,748 363,706 415,664
800,000 118,916 178,374 237,832 297,290 356,748 416,206 475,664
900,000 133,916 200,874 267,832 334,790 401,748 468,706 535,664
1,000,000 148,916 223,374 297,832 372,290 446,748 521,206 595,664
1,100,000 163,916 245,874 327,832 409,790 491,748 573,706 655,664
1,200,000 178,916 268,374 357,832 447,290 536,748 626,206 715,664
1,300,000 193,916 290,874 387,832 484,790 581,748 678,706 775,664
1,400,000 208,916 313,374 417,832 522,290 626,748 731,206 835,664
</TABLE>
Amounts shown are calculated on a straight life annuity basis, and are not
subject to any further deduction for Social Security benefits or other offsets.
Employees may elect to receive the actuarial value of their retirement benefits
in a lump sum in lieu of a lifetime pension.
Under the Retirement Plan, years of credited service as of December 31, 1993
and Covered Compensation for the calendar year ended December 31, 1993 are 17
years and $1,101,200 for Mr. Gilmartin, 15 years and $546,761 for Mr.
Castellini, 16 years and $438,480 for Mr. Galiardo, 13 years and $356,568 for
Mr. Miller and 38 years and $397,064 for Mr. Reynolds.
In addition, employment agreements with the named executives (more fully
discussed below under "Contractual Obligations") provide for a supplemental
pension computed by assuming additional years of credited service for purposes
of calculating this benefit under the Retirement Plan in the event of
termination of employment under certain stated conditions. This calculation
would result in 11 additional years for Mr. Gilmartin, 15 additional years for
Mr. Castellini, 15 additional years for Mr. Galiardo, and 12 additional years
for Mr. Miller. These supplemental pension amounts would be offset by any
pensions payable from prior employers.
CONTRACTUAL OBLIGATIONS
The named executives have employment agreements with the Company which
provide for continuation of their base salaries and fringe benefits for two
years after termination by the Company other than for cause or by the employee
for good reason not within three years following a change in control of the
Company. The terms "cause", "good reason" and "change in control" are defined
in the agreements. In the event of termination other than for cause or for good
reason within three years following a change in control, each named executive
would receive a payment equal to two times his highest aggregate annual
compensation (salary, bonus and stock award distributions) in any of the three
calendar years preceding the calendar year in which termination occurs, and his
fringe benefits, reduced to the extent provided by any subsequent employer,
would be continued for life. Had Messrs. Castellini, Galiardo, Gilmartin,
Miller and Reynolds been terminated on September 30, 1993 following a change in
control, they would have been entitled to cash payments of $870,131, $818,265,
$1,985,066, $852,785 and $734,309, respectively.
14
<PAGE>
In the event of termination other than for cause or for good reason within
three years following a change in control, the named executive would be
entitled to all of the pension benefits which he would have earned had he
remained an employee until age 65. If any termination payments to a named
executive pursuant to his agreement should be subject to the excise tax imposed
by Section 4999 of the Code (the "Excise Tax"), the Company would reimburse him
in an amount such that he would retain the same amount, net of all taxes, that
he would have retained had the Excise Tax not been in effect.
PERFORMANCE COMPARISON
The following graph presents a comparison of cumulative total return to
shareholders for the five- year period ended September 30, 1993, for the
Company, the S&P 500 Index, and the S&P Medical Products and Supplies Stock
Price Index. This is the comparison period required by applicable rules and
regulations of the SEC. Cumulative total return to shareholders is measured by
dividing total dividends (assuming dividend reinvestment) plus per share price
change for the period by the share price at the beginning of the measurement
period. The Company's cumulative shareholder return is based on an investment
of $100 on September 30, 1988 and is compared to the cumulative total return of
the S&P 500 Index and the S&P Medical Products and Supplies Stock Price Index
over the same period with a like amount invested.
Companies measured in the S&P Medical Products and Supplies Stock Price
Index, in addition to the Company, are Allergan, Inc., C.R. Bard, Inc., Bausch
& Lomb, Inc., Baxter International Inc., Biomet, Inc., Medtronic, Inc. and St.
Jude Medical, Inc.
Performance Graph Data
<TABLE>
<CAPTION>
S&P
Measurement Period Becton S&P Medical Products &
Fiscal Year Covered Dickinson 500 Index Supplies Index
- ------------------- ---------- --------- ------------------
<S> <C> <C> <C>
Measurement Pt-
FYE 9/30/88 $100.00 $100.00 $100.00
12/31/88 $ 91.27 $103.09 $ 97.88
3/31/89 $ 89.07 $110.40 $103.50
6/30/89 $101.64 $120.14 $113.70
FYE 9/30/89 $101.86 $133.01 $124.82
12/31/89 $110.57 $135.75 $134.25
3/31/90 $108.60 $131.67 $126.29
6/30/90 $126.36 $139.95 $142.71
FYE 9/30/90 $118.96 $120.71 $133.71
12/31/90 $135.32 $131.54 $157.53
3/31/91 $142.65 $150.64 $196.64
6/30/91 $136.12 $150.30 $189.68
FYE 9/30/91 $124.98 $158.34 $209.76
12/31/91 $126.45 $171.61 $257.57
3/31/92 $130.70 $167.28 $217.70
6/30/92 $138.67 $170.46 $216.58
FYE 9/30/92 $140.39 $175.83 $204.16
12/31/92 $147.55 $184.69 $220.71
3/31/93 $137.14 $192.75 $192.47
6/30/93 $151.43 $193.69 $177.67
FYE 9/30/93 $143.07 $198.17 $154.73
</TABLE>
15
<PAGE>
PROPOSAL 2. SELECTION OF INDEPENDENT AUDITORS
The Board of Directors, pursuant to the recommendation of the Audit
Committee, has selected Ernst & Young to audit the accounts of the Company and
its subsidiaries for the fiscal year ending September 30, 1994. A
representative of Ernst & Young will attend the Annual Meeting to respond to
appropriate questions and will have the opportunity to make a statement.
The Board of Directors recommends a vote FOR approval of the selection of
Ernst & Young. If approval is withheld, the Board will reconsider its
selection.
PROPOSAL 3. APPROVAL OF 1994 RESTRICTED STOCK PLAN
FOR NON-EMPLOYEE DIRECTORS
In December 1993, the Board of Directors adopted the 1994 Restricted Stock
Plan for Non-Employee Directors (the "Plan"), subject to shareholder approval.
The Board believes the Plan will further the growth, development and financial
success of the Company by enabling the Company to attract and retain non-
employee directors of outstanding ability and by linking a portion of their
compensation to the enhancement of the Company's stock value.
A brief description of the material provisions of the Plan is as follows:
1. Issuable Shares. There will be reserved 75,000 shares of the Company's
Common Stock for issuance pursuant to the Plan, subject to adjustment for
stock dividends, stock splits or other issuances of stock without
consideration.
2. Participation. Plan participation is limited to members of the Board
who are not employees of the Company or any of its subsidiaries.
3. Acquisitions of Restricted Stock. The quarterly retainer payable each
April 30th to non-employee directors will be paid in shares of restricted
Common Stock in lieu of cash. In addition, participants in the Plan may
elect to have one or more of their remaining quarterly retainer payments
paid in shares of restricted stock rather than in cash. Participants will
also have a one-time opportunity to acquire shares of restricted stock with
their previously deferred director's fees.
4. Restrictions. Restricted shares cannot be sold, assigned or pledged
until the restrictions on the shares lapse. During the restricted period,
the participant will have all of the other rights of a shareholder with
respect to restricted shares acquired under the Plan, including voting
rights and the rights to receive dividends. The restrictions on restricted
shares will lapse upon the applicable "Vesting Date" (as defined below) or
earlier, upon the occurrence of any of the following: (1) termination of a
participant's service on the Board due to death, disability or retirement
in accordance with the policy on retirement of non-employee directors; (ii)
removal from the Board following a "change in control" (as defined in the
Plan); (iii) resignation from the Board due to a conflict of interest; (iv)
financial hardship; (v) failure to be renominated for Board service other
than due to the participant's refusal or failure to stand for such
renomination; or (vi) failure to be re-elected after being duly nominated.
The "Vesting Date" shall be the date the participant's then-current term of
service on the Board expires, or such later date as may be selected by the
participant in accordance with the terms of the Plan.
5. Forfeiture. All of a participant's restricted shares will be forfeited
to the Company if the participant's service on the Board terminates for a
reason other than those set forth in item 4 above.
6. Administration. The Plan will be administered by the Compensation and
Benefits Committee of the Board or such other committee as may be
designated by the Board.
Since the shares to be issued under the Plan will be issued in lieu of
certain of the retainer and previously deferred director fees that would
otherwise be payable by the Company to its non-employee directors, the adoption
of the Plan will not result in additional benefit payments by the Company. If
the Plan had been in effect during the fiscal year ended September 30, 1993,
the Company's non-employee
16
<PAGE>
directors would have received an aggregate of 3,168 restricted shares under the
Plan in lieu of the April 30 quarterly retainer payments. In addition, the
Company's non-employee directors would have been eligible to elect to receive
an aggregate of 8,756 restricted shares and 15,592 restricted shares under the
Plan in lieu of their remaining quarterly retainer fees and previously deferred
directors' fees, respectively.
THE FOREGOING SUMMARY OF THE PLAN IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO THE PROVISIONS OF THE PLAN, A COPY OF WHICH IS ATTACHED AS EXHIBIT A TO THIS
PROXY STATEMENT.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 3.
PROPOSAL 4. SHAREHOLDER'S PROPOSAL
DISCLOSURE OF POLITICAL CONTRIBUTIONS
Mrs. Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Avenue N.W.,
Suite 215, Washington D.C. 20037, owner of 100 shares of Common Stock, has
informed the Company that she plans to introduce the following resolution at
the meeting:
"RESOLVED: That the shareholders recommend that the Board direct
management that within five days after approval by the shareholders of this
proposal, the management shall publish in newspapers of general circulation
in the cities of New York, Washington, D.C., Detroit, Chicago, San
Francisco, Los Angeles, Dallas, Houston and Miami, and in the Wall Street
Journal and U.S.A. Today, a detailed statement of each contribution made by
the Company, either directly or indirectly, within the immediately
preceding fiscal year, in respect of a political campaign, political party,
referendum or citizens' initiative, or attempts to influence legislation,
specifying the date and amount of each such contribution, and the person or
organization to whom the contribution was made. Subsequent to this initial
disclosure, the management shall cause like data to be included in each
succeeding report to shareholders. And if no such disbursements were made,
to have that fact publicized in the same manner."
The shareholder's statement in support of this resolution is as follows:
"REASONS: This proposal, if adopted, would require the management to
advise the shareholders how many corporate dollars are being spent for
political purposes and to specify what political causes the management
seeks to promote with those funds. It is therefore no more than a
requirement that the shareholders be given a more detailed accounting of
these special purpose expenditures than they now receive. These political
contributions are made with dollars that belong to the shareholders as a
group and they are entitled to know how they are being spent.
"Last year the owners of 2,387,297 shares, representing approximately
8.3% of shares voting, voted FOR this proposal.
If you AGREE, please mark your proxy FOR this resolution."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSAL 4.
Under applicable law, the Company makes no corporate contributions to Federal
candidates and only insignificant contributions to state candidates. The
Company and its operating units do, however, participate in business-oriented
political and civic activities, and make their positions known on legislation
that is significant to their businesses. The Company believes that these are
important efforts, which should not be hindered by special disclosure rules
that do not apply to others and that would impose an unnecessary expense upon
the Company.
SHAREHOLDER PROPOSALS FOR 1995 ANNUAL MEETING
Shareholder proposals for the 1995 Annual Meeting must be received at the
principal executive offices of the Company, 1 Becton Drive, Franklin Lakes, New
Jersey 07417-1880, not later than September 1, 1994 for inclusion in the proxy
statement and form of proxy.
* * * *
17
<PAGE>
EXHIBIT A
BECTON, DICKINSON AND COMPANY
1994 RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
SECTION 1. PURPOSE
The purpose of this 1994 Restricted Stock Plan for Non-Employee Directors
(the "Plan") is to further the growth, development and financial success of
Becton, Dickinson and Company (the "Company") by enabling the Company to
attract and retain non-employee directors of outstanding ability and by linking
a portion of their compensation to the enhancement of the Company's stock
value.
SECTION 2. DEFINITIONS
Capitalized terms used in this Plan and not defined above shall have the
meanings set forth in this Section 2.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Change in Control" shall mean and be deemed to have occurred if (i)
any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially
the same proportions, becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing twenty-five percent (25%) or more of the combined
voting power of the Company's then-outstanding securities; or (ii) during
any period of two consecutive years individuals who at the beginning of
such period constitute the Board and any new director whose election by the
Board or nomination for election by the Company's stockholders was approved
by a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for
any reason to constitute a majority thereof; or (iii) substantially all the
assets of the Company are disposed of by the Company pursuant to a merger,
consolidation, partial or complete liquidation, a sale of assets (including
stock of a Subsidiary) or otherwise, but not including a reincorporation or
similar transaction resulting in a change only in the form of ownership of
such assets.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Committee" shall mean the Compensation and Benefits Committee of the
Board or such other committee as may be designated by the Board.
(e) "Deferred Compensation" shall mean the amounts credited to the
account of an Eligible Director pursuant to any Deferred Compensation
Agreement.
(f) "Deferred Compensation Agreement" shall mean any written agreement by
and between an Eligible Director and the Company pursuant to which an
Eligible Director may defer receipt of Director's Fees and other
compensation for service as a member of the Board or any committee thereof.
(g) "Director" shall mean a member of the Board.
(h) "Director's Fees" shall mean the Board retainer fees payable to a
Director and shall exclude Committee Chairman fees, any attendance fees for
committee or special meetings and any other Director compensation.
(i) "Eligible Director" shall mean a Director who is not also an
"employee" of the Company (or its Subsidiaries) within the meaning of
ERISA.
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(j) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
(k) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(l) "Fair Market Value" shall mean on the applicable date the mean of the
highest and lowest selling prices of the Stock as reported on the Composite
Tape for securities traded on the New York Stock Exchange or, if no selling
prices are reported on such date, the date immediately prior thereto on
which such selling prices are reported.
(m) "Immediate and Severe Financial Hardship" shall mean an immediate and
severe financial hardship resulting from a sudden and unexpected illness or
accident of the Eligible Director or the Eligible Director's spouse or
dependents, or from a loss of an Eligible Director's property due to
casualty or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Eligible Director.
The foregoing shall be interpreted narrowly and encompass circumstances
determined to be an immediate and severe financial hardship to the average
person.
(n) "Payment Dates" shall mean the last days of January, April, July and
October of each calendar year on which Director's Fees earned during the
immediately preceding three (3) month period are payable.
(o) "Restricted Shares" shall mean shares of Stock acquired by Eligible
Directors pursuant to the Plan which are subject to the restrictions set
forth in Section 9.
(p) "Stock" shall mean the Common Stock, par value $1.00 per share, of
the Company.
(q) "Subsidiary" shall mean any subsidiary corporation of the Company as
defined in Section 424 of the Code.
(r) "Term of Service" shall mean the period commencing on the date an
Eligible Director is elected and qualified to serve on the Board and ending
on the date of the Annual Meeting of Shareholders of the Company for the
year in which his term is due to expire.
(s) "Vesting Date" shall have the meaning set forth in Section 10.
SECTION 3. ELIGIBILITY FOR PARTICIPATION IN THE PLAN
Participation in the Plan is limited to Eligible Directors, all of whom will
be participants in the Plan.
SECTION 4. SHARES OF STOCK SUBJECT TO THE PLAN
Subject to adjustment pursuant to Section 15, an aggregate of 75,000 shares
of Stock shall be reserved for issuance pursuant to the Plan. Shares delivered
under the Plan may be authorized and unissued shares or issued shares held by
the Company in its treasury.
SECTION 5. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee. Subject to the express
provisions of the Plan, the Committee shall have authority to interpret the
Plan, to prescribe, amend and rescind rules and regulations relating to it and
to make all other determinations necessary or advisable for the administration
of the Plan. Any controversy or claim arising out of or related to the Plan
shall be determined unilaterally by and at the sole discretion of the Committee
and shall be final and binding on the Company and on the Eligible Directors.
SECTION 6. MANDATORY ACQUISITIONS OF RESTRICTED SHARES
In lieu of receiving the Director's Fees otherwise payable on each April
Payment Date in cash, each Eligible Director shall acquire on such Payment Date
a number of Restricted Shares equal to the amount of such Director's Fees
divided by the Fair Market Value of the Stock on such April Payment Date.
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SECTION 7. VOLUNTARY ACQUISITIONS OF RESTRICTED SHARES
(a) Each Eligible Director may elect with respect to the Directors's Fees
otherwise payable to the Eligible Director on any July, October and January
Payment Date, to acquire on such Payment Date a number of Restricted Shares
equal to the amount of such Director's Fees divided by the Fair Market
Value of the Stock on such Payment Date.
(b) Each Eligible Director may make a single irrevocable election prior
to January 1, 1994 to have a stated percentage (increments of ten percent
(10%)) of the Eligible Director's Deferred Compensation used to acquire on
July 1, 1994 a number of Restricted Shares equal to the amount of the
Deferred Compensation elected to be converted into Restricted Shares
divided by the Fair Market Value of the Stock on July 1, 1994.
(c) Any elections to acquire Restricted Shares pursuant to this Section
7, and any modifications of any elections made pursuant to Section 7(a),
(i) shall be in writing in the form prescribed by the Secretary of the
Company, and (ii) must be delivered to the Secretary of the Company at
least six months prior to the effective date of the transaction to which
each such election or modification relates.
SECTION 8. ISSUANCE, POSSESSION AND DELIVERY OF RESTRICTED SHARES
(a) Each acquisition of Restricted Shares under the Plan shall be
evidenced by the issuance of a Stock certificate registered on the transfer
ledgers of the Company in the name of the Eligible Director who acquired
the Restricted Shares effective as of the date such Restricted Shares are
acquired by the Eligible Director pursuant to the Plan. Each such
certificate shall bear an appropriate legend referring to the restrictions
applicable to the Restricted Shares.
(b) Possession of any certificates representing Restricted Shares shall
be retained by the Company for the benefit of each Eligible Director until
the restrictions thereon have lapsed and been removed in accordance with
Section 11. Thereupon, the Company shall promptly deliver the certificates
for such shares to the Eligible Director.
(c) Notwithstanding any other provision of the Plan, the issuance or
delivery of any such shares of Stock may be postponed for such period as
may be required to comply with any applicable requirements of any national
securities exchange or any requirements under any other law or regulation
applicable to the issuance or delivery of such shares. The Company shall
not be obligated to issue or deliver any such shares if the issuance or
delivery thereof shall constitute a violation of any provision of any law
or of any regulation of any governmental authority or any national
securities exchange.
SECTION 9. RESTRICTIONS ON RESTRICTED SHARES
Unless and until the provisions of the Plan relating to removal of
restrictions have been satisfied, the Restricted Shares may not be sold,
assigned, pledged, encumbered, hypothecated or transferred other than pursuant
to a "qualified domestic relations order" within the meaning of ERISA.
SECTION 10. VESTING DATE
(a) The Vesting Date for all Restricted Shares to be acquired by an
Eligible Director during any Term of Service on the Board shall be the
later of: (i) the date on which such Term of Service expires, or (ii) the
calendar date selected by the Eligible Director in accordance with Section
10(b).
(b) On or before December 31, 1993, and thereafter within thirty (30)
days following the commencement of each new Term of Service on the Board,
each Eligible Director may select a single Vesting Date for all Restricted
Shares to be acquired by the Eligible Director during the Eligible
Director's then-current Term of Service.
(c) All elections pursuant to this Section 10 shall be irrevocable for
the applicable Term of Service on the Board and shall be in writing in the
form prescribed by the Secretary of the Company.
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SECTION 11. REMOVAL OF RESTRICTIONS
The restrictions on the Restricted Shares set forth in Section 9 shall be
removed and lapse upon the applicable Vesting Date, or, if earlier, upon the
occurrence of any of the following:
(a) the death of the Eligible Director;
(b) the disability of the Eligible Director requiring discontinuance of
service on the Board;
(c) the retirement of the Eligible Director from service as a Director in
accordance with the policy on retirement of non-employee Directors then in
effect;
(d) removal of the Eligible Director from the Board following a Change in
Control;
(e) resignation of the Eligible Director from the Board after furnishing
an opinion of counsel, reasonably satisfactory to a majority of the
Committee (other than the Eligible Director), to the effect that continued
membership on the Board will result in the Eligible Director having a
conflict of interest or suffering some other significant legal liability;
(f) a determination by a majority of the Committee (other than the
Eligible Director) that the Eligible Director has an Immediate and Severe
Financial Hardship which cannot be met through any other means, limited to
the number of Restricted Shares necessary to meet that hardship;
(g) the failure of the Eligible Director to be renominated for Board
service other than due to the Eligible Director's refusal or failure to
stand for such renomination; or
(h) the failure of the Eligible Director to be re-elected after being
duly nominated.
The foregoing notwithstanding, Restricted Shares acquired pursuant to Section
6 shall remain subject to the restrictions set forth in Section 9 for at least
six months following the date of such acquisition.
SECTION 12. RIGHTS AS A SHAREHOLDER
Subject to the restrictions set forth in the Plan, an Eligible Director shall
be entitled to all of the rights of a shareholder with respect to the
Restricted Shares from the date such shares are acquired pursuant to the Plan,
including voting rights and the rights to receive dividends and other
distributions. All shares of Stock or other securities paid on Restricted
Shares shall be held by the Company and shall be subject to the same
restrictions as the Restricted Shares to which they relate.
SECTION 13. FORFEITURE
An Eligible Director's Restricted Shares shall be forfeited to the Company
upon the Eligible Director's termination of service on the Board for any reason
other than those set forth in Section 11.
SECTION 14. FRACTIONAL SHARES
The Company shall promptly pay to an Eligible Director the cash equivalent of
any fractional shares which would otherwise be acquired by the Eligible
Director under the terms of the Plan.
SECTION 15. ADJUSTMENTS
There shall be proportionate adjustments of the aggregate number of shares of
Stock reserved for issuance under the Plan, in the event of an increase in the
number of issued shares of Stock by reason of any stock dividend, stock split-
up or other issuance of shares without consideration.
No exercise of conversion rights with respect to the shares of the Company's
Series B ESOP Convertible Preferred Stock shall call for any adjustment under
this Section 15.
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SECTION 16. GENERAL PROVISIONS
(a) It is intended that the Plan and any transaction involving a person
subject to Section 16 of the Exchange Act meet all of the requirements of
Rule 16b-3, promulgated by the Securities and Exchange Commission, as such
rule is currently in effect or as hereafter modified or amended. If any
provision of the Plan or any transaction would disqualify the Plan or such
transaction under, or would not comply with, Rule 16b-3, such provision or
transaction shall be construed or deemed amended to conform to Rule 16b-3
or otherwise shall be deemed to be null and void, in each case to the
extent permitted by law and deemed advisable by the Committee.
(b) Nothing in the Plan shall confer upon any Eligible Director any right
to serve as a member of the Board for any period of time or to continue at
the present or any other rate of compensation.
SECTION 17. AMENDMENT AND TERMINATION
(a) The Board may amend or terminate the Plan at any time without notice;
provided however, that the Board may not, without prior approval by the
shareholders, (i) materially increase the maximum number of shares of Stock
which may be issued under the Plan (except as contemplated by the
provisions of Section 15), (ii) materially increase the benefits accruing
to participants under the Plan, (iii) materially modify the requirements as
to eligibility for participation in the Plan, or (iv) accelerate the
removal and lapse of the restrictions set forth in Section 9 on Restricted
Shares acquired by an Eligible Director prior to the date of such
amendment.
(b) The provisions of the Plan which govern eligibility to participate
and the amount, price and timing of the mandatory acquisitions of
Restricted Shares pursuant to Section 6 shall not be amended more than once
every six months, other than to comply with changes in the Code, ERISA or
the rules thereunder.
(c) No termination or amendment of the Plan may adversely affect any
Eligible Director's rights with respect to Restricted Shares which were
acquired by such Eligible Director prior to such action.
SECTION 18. EFFECTIVE DATE AND SHAREHOLDERS' APPROVAL
The Plan shall become effective upon approval by the affirmative votes of the
holders of a majority of the shares present, or represented, and entitled to
vote thereon at the February 8, 1994 Annual Meeting of Shareholders of the
Company or any adjournment or postponement thereof.
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GRAPHIC MATERIAL CROSS-REFERENCE PAGE
PHOTOS OF THE DIRECTORS AND NOMINEES FOR DIRECTORS APPEAR TO THE LEFT
OF EACH RESPECTIVE NAME ON PAGES 5, 6 AND 7.
A PERFORMANCE GRAPH SHOWING A COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL
RETURN AMONG BECTON, DICKINSON AND COMPANY, S&P 500 INDEX AND S&P MEDICAL
PRODUCTS & SUPPLIES INDEX APPEARS ON PAGE 15. (THE NUMBERS USED IN GRAPH
APPEAR ON PAGE 15.)
<PAGE>
PROXY/VOTING INSTRUCTION CARD
BECTON, DICKINSON AND COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
ANNUAL MEETING ON FEBRUARY 8, 1994
The undersigned hereby appoints Raymond V. Gilmartin, John W. Galiardo and
Raymond P. Ohlmuller, and any of them, with full power of substitution, proxies
to attend the annual meeting of the shareholders of the Company to be held at
2:30 P.M. on Tuesday, February 8, 1994, at the Marriott Hotel, Garden State
Parkway at Interstate 80, Saddle Brook, New Jersey, and any adjournment
thereof, and to vote all shares of the Common Stock of the Company which the
undersigned is entitled to vote upon each of the matters referred to in this
proxy and, in their discretion, upon such other matters as may properly come
before the meeting.
This card constitutes voting instructions to the Trustee for any shares of
Common Stock and Series B ESOP Convertible Preferred Stock allocated to the
undersigned under the Company's Savings Incentive Plan.
Election of Directors to Terms of Three Years:
Nominees:
Harry N. Beaty, M.D., Raymond V. Gilmartin, Frank A. Olson
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE
BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE
IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. PLEASE SIGN AND
RETURN THIS CARD USING THE ENCLOSED ENVELOPE.
CONTINUED, AND
TO BE SIGNED,
ON REVERSE SIDE
<PAGE>
/X/ PLEASE MARK YOUR 1508
VOTES AS IN THIS
EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF DIRECTORS,
FOR PROPOSALS 2 AND 3 AND AGAINST PROPOSAL 4.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
- ---------------------------------------------------------------------
1. Election of FOR WITHHELD
Directors. (see reverse) / / / /
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------
2. Approval of Independent auditors. FOR AGAINST ABSTAIN
/ / / / / /
3. Approval of 1994 Restricted Stock / / / / / /
Plan for Non-Employee Directors.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSAL 4.
- -------------------------------------------------------------------------------
4. Disclosure of political FOR AGAINST ABSTAIN
contributions. / / / / / /
- -------------------------------------------------------------------------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
- -----------------------------------------------
- -----------------------------------------------
SIGNATURE(S) DATE
