Company Name: Becton, Dickinson and Co.
Public Availability Date: November 14, 2006

Document Sections:

INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
APPENDIX
STAFF REPLY LETTER

[INQUIRY LETTER]
September 29, 2006

U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, N.E.
Washington, D.C. 20549

Dear Sir or Madam:

On behalf of Becton, Dickinson and Company, a New Jersey corporation ("BD" and, together with its subsidiaries, the "Company"), and in accordance with Rule 14a-8(j) under the Securities Exchange Act of 1934, as amended, we are filing this letter with respect to a certain shareholder proposal and supporting statement submitted by Peter Bell (the "Proponent"), on June 13, 2006 (the "Proposal") for inclusion in the proxy materials BD intends to distribute in connection with its 2007 Annual Meeting of Stockholders (the "2007 Proxy Materials"). We hereby request confirmation that the staff of the Office of Chief Counsel (the "Staff") will not recommend any enforcement action if, in reliance on certain provisions of Rule 14a-8, BD omits the Proposal from its 2007 Proxy Materials. BD expects to file its definitive proxy materials with the Securities and Exchange Commission (the "Commission") on or about December 20, 2006. Accordingly, pursuant to Rule 14a-8(j), this letter is being filed with the Commission no later than 80 days before BD files its definitive 2007 Proxy Materials.

Pursuant to Rule 14a-8(j) and Staff Legal Bulletin No. 14C, we are enclosing herewith: (1) six copies of each of this letter, the supporting opinion of counsel as to the Proposal's violation of New Jersey law, the supporting opinion of counsel as to the Proposal's violation of non-U.S. law and the Proposal; and (2) a letter from the Company to the Proponent notifying the Proponent of the Proposal's procedural deficiencies and the Proponent's response. We are also enclosing six copies of the supporting opinion of counsel as to the Proposal's violation of federal law. A copy of this submission is being sent simultaneously to the Proponent as notification of the Company's intention to omit the Proposal from its 2007 Proxy Materials. This letter constitutes the Company's statement of the reasons it deems the omission of the Proposal to be proper. We have been advised by the Company as to the factual matters set forth herein.

The Proposal, if adopted, would require BD's Board of Directors "to prevent the investment of any of the companys [sic] funds in shares in any of their pension schemes, which are shares in companies wholly or partly engaged in the manufacture of cigarettes." The Proposal further requires that, "[t]he Board of Directors shall give effect to this proposal by instructing local management to convey to their pension administrators not to purchase shares in such companies and to dispose of any already held." ¹

Statements of Reasons to Exclude

The Company believes that the Proposal may properly be excluded from its proxy statement under Rule 14a-8(i)(1) and Rule 14a-8(i)(2) for the reasons discussed below.

Rule 14a-8(i)(2)

Under Rule 14a-8(i)(2), a proposal may be properly omitted where, if implemented, it would "cause the company to violate any state, federal or foreign law to which it is subject."

If implemented, the Company believes that the Proposal would cause the Company to violate federal law under the Employee Retirement Income Security Act of 1974 ("ERISA"). We have included a supporting opinion of outside counsel to the Company in Appendix A detailing the violations of ERISA that implementation of the Proposal would entail. Furthermore, implementation of the Proposal would cause the Company to violate laws in other jurisdictions in which it maintains various pension plans, ² including the United Kingdom, under laws in those jurisdictions similar to ERISA, as explained further in the attached supporting opinion of outside counsel to the trustees for the Company's United Kingdom pension plans in Appendix B. ³

Currently, the Company maintains several tax-qualified defined benefit pension plans covering substantially all of its employees in the United States and certain non-U.S. locations. Defined benefit pension plan assets on a consolidated global basis totaled approximately $934 million as of September 30, 2005, the most recent measurement date for global assets, including $672 million in U.S. plans and $92 million in plans in the United Kingdom.

As of June 30, 2006, U.S. defined benefit pension plan assets were approximately $811 million and defined contribution plan assets were approximately $1,095 million. ⁴ Of these total U.S. qualified plan assets of nearly $2 billion, approximately $5 million-or 0.25%-was invested through various funds in companies that manufacture cigarettes.

The Company, through its Investment Committee, which is comprised of members of management, serves as the fiduciary for substantially all qualified plan assets in the U.S. In jurisdictions outside of the U.S., fiduciaries for pension plans are generally groups of trustees unaffiliated with management.

ERISA requires pension plan fiduciaries to exercise their duties "for the exclusive purpose of ... providing benefits to participants and their beneficiaries." 29 U.S.C. §1104(a)(1)(A). The Department of Labor has interpreted the fiduciary standards of Section 403 and 404 of ERISA to preclude investment activities pursued for non-economic ends. In an advisory opinion relating to the selection of a socially-responsible fund as a pension plan investment, the Department of Labor stated that:

the Department has construed the requirements that a fiduciary act solely in the interest of, and for the exclusive purpose of providing benefits to participants and beneficiaries, as prohibiting a fiduciary from subordinating the interests of participants and beneficiaries in their retirement income to unrelated objectives.... [A] fiduciary must ordinarily consider only factors relating to the interests of plan participants and beneficiaries in their retirement income. A decision to make an investment ... may not be influenced by non-economic factors unless the investment ultimately chosen for the plan, when judged solely on the basis of its economic value, would be equal to or superior to alternative available investments.

DOL Adv. Op. 98-04A (May 28, 1998) (footnote omitted) (emphasis added).

In a no-action letter addressing a shareholder proposal similar to the Proponent's, the Staff expressed a view similar to the Department of Labor's, stating that shareholder proposals requiring the divestment of pension funds for social policy reasons are inconsistent with ERISA fiduciary duties, and that such proposals are excludable under Rule 14a-8(c)(2) (the predecessor rule to Rule 14a-8(i)(2)). See American Telephone & Telegraph, SEC No-Action Letter, 1985 SEC No-Act. LEXIS 2838, at *1 (Dec. 16, 1985). In American Telephone & Telegraph, the SEC considered a proposal that would have required the company to divest pension fund assets from companies conducting business in South Africa which did not adhere to the Sullivan Principles, which required South African companies to refrain from discrimination in the workplace. Because the proposal would have "require[d] the [c]ompany as named fiduciary of the Pension Fund to take steps which would place the fiduciary in jeopardy of breaching its obligations under ERISA," the proposal was excludable under Rule 14a-8(c)(2). Id.

Divesting pension assets from companies involved in cigarette manufacturing would cause the Investment Committee and other fiduciaries for the Company's pension plans to violate their fiduciary duties under ERISA by placing social policy concerns above the plan participants' financial interests. Additionally, merely setting up the procedures to implement a divesture strategy would have a large negative financial impact on the pension plans, translating into decreased retirement security for Company employees. The process is especially costly and complicated because certain pension assets are invested in commingled funds, making carve-outs for companies involved in cigarette manufacturing virtually impossible. By way of illustration, the Company has estimated that adding a tobacco-screened fund to the Barclays Global Alpha Tilts fund (which includes investments in tobacco companies) alone would cost an additional $350,000 per year. In addition, suitable separately-managed accounts would need to be found to replace other commingled funds, at the cost of sacrificing the economies of scale that these commingled funds achieve.

Furthermore, the Company simply does not have the power to force the trustees of the United Kingdom pension plans to alter their investment strategies (short of taking drastic action by removing the trustees entirely). As the trustees' outside counsel states in her opinion letter, for the Company "to force the Trustees to act in accordance with the shareholder proposal ... would not be permissible given the legal and regulatory framework within which the Trustees operate." See Appendix B, at 3 (emphasis added). ⁵

Based on the foregoing, the Company believes that the Proposal may be properly excluded from its 2007 Proxy Materials under Rule 14a-8(i)(2), as implementing the Proposal would cause the Company to violate federal and foreign law.

Rule 14a-8(i)(1)

Under Rule 14a-8(i)(1), a proposal may be excluded if it "is not a proper subject for action by shareholders under the laws of the jurisdiction of the company's organization."

The Staff has explained that a mandatory proposal is improper under state law rules that authorize a company's Board of Directors to manage the business of a company because the proposal, if implemented, would compromise such authority. See, e.g., Johnson & Johnson, SEC No-Action Letter, 2004 SEC No- Act. LEXIS 20, at * ¹ (Jan. 13, 2004). The Company is incorporated in New Jersey and is governed by the New Jersey Business Corporation Act, which vests the Company's Board of Directors with the authority to manage the Company's business. See NJ Business Corporation Act §14A:6-1. The Proposal resolves that the Company's Board of Directors "prevent the investment of any of the company['s] [pension] funds" in companies that are involved in the manufacture of cigarettes and states that the Board of Directors "shall give effect to this proposal by instructing local management to convey to their pension administrators not to purchase shares in such companies and to dispose of any already held." See Proposal, Appendix D (emphasis added). The Proposal does not "request" or "recommend" that the Company cease investing its pension funds in particular businesses; the Proposal is a mandatory proposal, which, if implemented, would require the Company to divest its pension funds' holdings in any company involved in cigarette manufacturing and prohibit future investments in the same. If approved, the Proposal would compromise the authority of the Company's Board of Directors to manage the Company's business in contravention of New Jersey state law, as the Board of Directors would be required to instruct the managers of Company employee pension funds to take certain divestiture actions and place limitations on their investment strategies.

Furthermore, for both New Jersey companies and companies incorporated in states with laws similar to NJ Business Corporation Act §14A:6-1, the Staff has required shareholders to recast mandatory proposals as recommendations or requests in order to have the proposal included in a company's proxy statement. See, e.g., Johnson & Johnson, at *1 (Jan. 13, 2004) (permitting a New Jersey company to exclude a proposal mandating a cessation of charitable contributions unless recast as a recommendation or request); American Elec. Power Co., SEC No-Action Letter, 2002 SEC No-Act. LEXIS 67 (Jan. 16, 2002) (permitting a New York company to exclude a proposal mandating director term limits unless recast as a recommendation or request); Alaska Air Group, Inc., SEC No-Action Letter, 2000 SEC No-Act. LEXIS 479 (Mar. 26, 2000) (permitting a Delaware company to exclude a mandatory proposal that the company reinstate simple majority voting on all matters submitted to a shareholder vote unless recast as a recommendation or request); SL Indus., Inc., SEC No-Action Letter, 1999 SEC No-Act. LEXIS 715, at *1 (Aug. 30, 1999) (permitting a New Jersey company to exclude a proposal mandating that, whenever a cash offer is received to buy the company for 20% or more than its market value, the offer be presented to shareholders for acceptance or rejection unless recast as a recommendation or request). We have attached hereto as Appendix C a supporting opinion from BD's in-house counsel, who is admitted to the New Jersey State Bar, further articulating the Proposal's violation of New Jersey law.

The Company believes that the Proposal may be excluded from its 2007 Proxy Materials under Rule 14a-8(i)(1) because it is phrased as a mandate that improperly limits the authority granted by the state corporate law rules of New Jersey to the Board of Directors of BD to manage the business of the Company.

* * *

The Company respectfully requests confirmation that the Staff will not recommend any enforcement action if, in reliance on the foregoing, BD omits the Proposal from its 2007 Proxy Materials. If the Staff does not concur with the Company's position, we would appreciate an opportunity to confer with the Staff concerning these matters prior to the issuance of its Rule 14a-8 response.

Please call the undersigned at (212) 450-4131 if you should have any questions or need additional information or as soon as a Staff response is available. Please acknowledge receipt of this filing by date-stamping the enclosed additional copy of this letter and returning it to our messenger.

Respectfully yours,

/s/

Sarah Beshar

Attachment

cc w/ att: Peter Bell

Jeffrey S. Sherman, esq. (Becton, Dickinson and Company)
Dean J. Paranicas, esq. (Becton, Dickinson and Company)

-----FOOTNOTES-----

¹ The Proposal, together with subsequent correspondence between the Proponent and BD, is attached hereto as Appendix D.

² In addition to being impermissible under ERISA and the laws of the United Kingdom, the Company believes that the Proposal would violate the laws of Ireland, under laws and rationale not materially different from those relevant to the Company's pensioh plans in the United Kingdom.

³ In summary, pension investments in the United Kingdom are subject to laws similar to ERISA, in that investments must be made to maximize the financial benefits to the funds' beneficiaries. Investments made based on other considerations violate such laws unless the investment returns are prospectively anticipated to be equal to or greater than other potential investments. The supporting opinion in Appendix B is addressed to the trustees of the pension scheme for Becton Dickinson UK Limited (a subsidiary of BD).

⁴ In the U.S., in addition to the defined benefit plans, the Company maintains several qualified defined contribution plans (referred to as Section 401(k) Plans).

⁵ We are aware of the Staff's position in Aetna Life and Cas. Co. (Feb. 28, 1991), where the Staff did not concur with Aetna's position that it could exclude a proposal that requested that Aetna establish a review committee to report on the impact of smoking on, among other things, Aetna's investment policies. The Staff noted that Aetna's proposal, if adopted, would merely require the company to provide a report and not to change its investment policies relating to, or divest itself of, tobacco company equities. The Proposal, however, explicitly requires the Company to pursue a divesture strategy and alter its investment policies, as was the requirement in AT&T with regard to the Sullivan Principles. As such, the Proposal, if adopted, would directly lead to, among other violations, violations of ERISA and certain laws of the United Kingdom. See also note 2.

[INQUIRY LETTER]
TRANSCRIPTION

Corporate Secretary
BD
1 Becton Drive
Franklin Lakes
New Jersey 07417-1880

Mr. Peter Bell
106 Brookville
Drogheda
Co. Louth
Ireland
8 6 2006

Dear Mr. Secretary:

I attach a share holder proposal for the 2007 Annual Meeting. This for inclusion in BD proxy materials. I note the latest date is 21 August 2006 for submitting proposals.

Should there be anything in my proposal that would prevent it being put before the shareholders for vote, please let me know immediately and I will correct it. The main thrust of the proposal will of course remain.

I would appreciate an acknowledgement that you received the proposal.

Yours sincerely,

Peter Bell

Resolved: that the shareholders of Becton Dickinson assembled in annual meeting in person and by proxy, hereby instruct the Board of Directors to prevent the investment of any of the companys [SIC] funds in shares in any of their pension schemes, which are shares in companies wholly or partly engaged in the manufacture of cigarettes.

The Board of Directors shall give effect to this proposal by instructing local management to convey to their pension administrators not to purchase shares in such companies and to dispose of any already held.

Local management shall mean any person or persons managing a wholly owned subsidiary of the company, or managing a company in which Becton Dickinson holds the controlling interest.

Reasons: It is universally accepted that cigarette smoking is seriously damaging to peoples [SIC] health. It is therefore totally inconsistent and hypocritical that a company engaged in the manufacture of instruments and apparatus to prevent or cure illness or enhance people's health would be part of something which would have the opposite effect. (BD. Helping all people live healthy lives).

Peter Bell This graphic not available in DOS This graphic not available in DOS

[INQUIRY LETTER]
September 26, 2006

Dean J. Paranicas
Vice President, Corporate Secretary and Public Policy
Becton, Dickinson and Company
1 Becton Drive
Franklin Lakes, NJ 07417

Re: Sharcholder's Proposal Prohibiting Plan Investment in Cigarette Manufacturers

Dear Dean:

You have asked for our opinion as to the consequences under the Employee Retirement Income Security Act of 1974, as amended ("ERISA") of a proposed shareholder proposal that would require the Board of Directors of Becton, Dickinson and Company ("the Company") to prohibit the investment of certain qualified retirement plan funds in companies that are wholly or partly engaged in the manufacture of cigarettes (for ease of reference, these companies will be referred to as "cigarette manufacturers" even though they might only be partly engaged in the manufacture of cigarettes). ¹

Background

Under the terms of the Company's Savings Incentive Plan ("SIP") and Retirement Plan ("the Retirement Plan"), the Investment Committee is the named fiduciary responsible for selecting investment options and, with respect to the Retirement Plan, the actual investment of Plan assets. The SIP and Retirement Plan specifically provide that the fiduciary responsibility for making investment decisions resides exclusively with the Investment Committee. The proposed shareholder proposal would instruct the Company's Board of Directors to prevent the investment of any SIP or Retirement Plan assets in any companies that are wholly or partly engaged in the manufacture of cigarettes. The Company (through various subsidiaries and affiliates) maintains other ERISA-covered retirement plans covering employees at specific subsidiaries and affiliates. It is not clear whether the proposed shareholder proposal would apply to those other plans; nevertheless, the legal issues raised in this letter would apply equally to any similar restriction applicable to such plans.

Law and Analysis

Under ERISA, plan fiduciaries must discharge their duties solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits to participants and their beneficiaries and defraying reasonable expenses of administering the plan. ERISA §404(a)(1)(A). This is also known as the "exclusive benefit rule."

With respect to plan investments, ERISA sections 403 and 404 require plan fiduciaries to act prudently and diversify plan investments to minimize the risk of large losses, unless it is clearly prudent not to do so under the circumstances. As a technical matter, whether an investment decision made by a fiduciary is prudent is viewed from the perspective of the process undertaken at the time a decision is made (including the procedural process and the substantive review); it is not to be evaluated with the benefit of hindsight. See, e.g., American Communications Ass'n v. Retirement Plan for Employees of RCA Corp., 488 F. Supp. 479, 483 (1980, DC NY), affd without op., 646 F2d 559 (2d Cir. 1980) ("The standard to be applied is that of conduct, tested at the time of an investment decision, not that of performance judged from the vantage point of hindsight.").

These exclusive benefit and prudence standards apply to the selection and monitoring of plan investments and investment alternatives in a plan where participants have the right to direct investments of their accounts, such as the SIP, and to the decision of how to invest plan assets in a pension plan, such as the Retirement Plan. Fiduciaries cannot act in a way to serve their own interests or interests other than those that serve to benefit plan participants and beneficiaries.

In addition, under Department of Labor ("DOL") Regulation section 2550.404a-1, a fiduciary satisfies the prudence requirement of ERISA Section 404(a)(1)(B) if "(1) the fiduciary making an investment or engaging in an investment course of action has given appropriate consideration to those facts and circumstances that, given the scope of the fiduciary's investment duties, the fiduciary knows or should know are relevant, and (2) the fiduciary acts accordingly."

In 1988, the DOL analyzed this standard in light of certain proposals related to disinvestment in companies that conduct business in South Africa. In DOL Advisory Opinion 88-16A, the DOL indicated that making recommendations concerning socially-responsible investing would not violate ERISA sections 403 and 404. Specifically, the DOL stated "... it appears that the recommendations of the UAW regarding companies which conduct business in South Africa and which have not endorsed the so-called 'Sullivan Principles' are merely advisory in nature and, thus, will not inappropriately limit the investment alternatives available to the Plan's investment managers. Accordingly, it is the Department's opinion that such recommendations ... would not be inconsistent with the requirements of section 403(c) and 404(a)(1) of ERISA.". The DOL was careful to note, however, that blanket investment restrictions, without applying a more detailed prudence analysis, would violate ERISA. In this regard, the DOL stated "[a] decision to make an investment may not be influenced by non-economic factors unless the investment, when judged solely on the basis of its economic value to the plan, would be equal or superior to alternative investments available to the plan."

In 1994, the DOL followed this line of reasoning in issuing Interpretive Bulletin 94-1 ("94-1"), which applied the ERISA fiduciary rules to "economically targeted investments" ("ETIs"). ETIs are investments selected for an economic benefit they create aside from the investment return generated to the plan. The DOL construed the ERISA section 403 and 404 requirements discussed above to prohibit fiduciaries "from subordinating the interests of participant and beneficiaries in their retirement income to unrelated objectives." ² Instead, the DOL established a standard whereby a plan fiduciary could invest in an ETI only if the plan fiduciary could demonstrate that the chosen ETI investment option was at least as prudent, taking into account the likely risk and return, as other investments that the plan could make.

The proposed restriction on investment in stocks of cigarette manufacturers is not an ETI, but would seem to fall into the category of investment known as "socially-responsible" investments. A socially-responsible investment is one that the fund managers believe make a significant contribution to society through their products, services, and the way they do business. ³ In Advisory Opinion 98-04A (May 28, 1998), the DOL extended its long-held legal position on these matters to investment in socially-responsible investments by ERISA fiduciaries. ⁴

The DOL noted that ERISA Sections 403 and 404 do not preclude the choice of investments that result in benefits to society; however, the existence of such collateral benefits cannot be the decisive factor in making the investment selection, except in limited circumstances. Specifically, much like in Advisory Opinion 88-16A and Interpretive Bulletin 94-1, Advisory Opinion 98-04A noted that such socially-responsible investments would only avoid a violation of ERISA sections 403 and 404 if the fiduciary determines that the investment option with collateral societal benefits is expected to provide a return on investment commensurate to the other investment choices having similar degrees of risk.

DOL Advisory Opinion 98-04A specifically provides that, "[a] decision to make an investment, or to designate an investment alternative, may not be influenced by non-economic factors unless the investment ultimately chosen for the plan, when judged solely on the basis of its economic value, would be equal to or superior to alternative available investments." ⁵ The DOL further explained that fiduciaries must consider many things when selecting plan investments, including the role of the selected investment in the plan's investment portfolio, by taking into account diversification, liquidity, and risk/return characteristics of the investment choices.

Thus, the available guidance indicates that if the likely returns (after considering transaction and market impact costs), relative to risk, of a socially-responsible investment are less than those of otherwise available investments, then a fiduciary cannot consider social consequences in making the investment decision to favor the socially-responsible investment. We note that this analysis is not a simple analysis and most plan fiduciaries would have to rely on the opinions of investment experts to evaluate these factors.

Conclusions

The proposed shareholder proposal would require the Company's Board of Directors to impose a general prohibition on investment of ERISA plan assets in companies wholly or partly engaged in the manufacture of cigarettes. The proposal would apply not only to new ERISA plan investments but also to existing investments which would have to be sold. Because this restriction on investing in cigarette manufacturers would be a socially-responsible investment decision based solely on non-economic factors, following this directive would violate ERISA's fiduciary standards as explained above.

In addition to the foregoing discussion, there are certain other points for you to consider. First, as a practical matter, a blanket prohibition on investments in cigarette manufacturers would be nearly impossible in the SIP. The SIP currently maintains 10 investment funds (including a series of lifecycle funds). It is not possible to force these independently-managed funds to divest their holdings in cigarette manufacturers. Therefore, imposing an investment restriction that forces liquidation of these interests would force an arbitrary liquidation of some existing fund options and create significant limitations on the availability of new investment fund options for SIP.

Similarly, the Retirement Plan investment management is done through agreements with various investment managers. To force these managers to screen their investments to exclude investments in cigarette manufacturers would likely increase the cost of investment significantly (thereby reducing the overall rate of return) and may limit the number of managers who would be willing to provide investment managements services.

For example, you have indicated that the Retirement Plan is currently invested in certain Russell investment funds. As you indicated, there are no available alternatives at Russell that would preclude investment in cigarette manufacturers. Thus, a screening restriction would result in the total disruption of the Russell relationship. Therefore, the two Russell funds, which the Investment Committee considers the most appropriate investments in their asset classes, would have to be replaced with alternatives that are sub-optimal. You have estimated that the replacement of the Russell funds would necessitate the payment to Russell of significant amounts in additional consulting fees, in order for Russell to continue providing pension consulting services.

If you have any further questions with respect to the matters discussed above, please let us know.

Very truly yours,

McDermott Will & Emery LLP

By: /s/

Paul M. Hamburger

-----FOOTNOTES-----

¹ This letter only addresses the ERISA fiduciary requirements impacted by the proposed shareholder proposal and does not address other laws that may be relevant to analyzing the legal implications of the shareholder' proposal. In addition, as we discussed, the shareholder proposal is very unclear as to how to determine whether a company is engaged "wholly or partly" in the manufacture of cigarettes. As we discussed, this letter is limited to a discussion of the legal consequences under ERISA and not the other practical issues raised by the proposal. In addition, we note that this letter is written to Becton, Dickinson and Company acting in its capacity as employee benefit plan sponsor and not acting as a fiduciary of any of the employee benefit plans referred to herein.

² See DOL Interpretive Bulletin 94-1.

³ See DOL Advisory Opinion No. 98-04A (May 28, 1998).

⁴ The DOL has also issued opinion letters dealing with other investments based on various social purposes which came to similar conclusions. See, e.g., DOL Advisory Opinion Letter Nos. 88-16A and 85-36A.

⁵ See DOL Advisory Opinion No. 98-04A (May 28, 1998).

[INQUIRY LETTER]
Trustees of the Becton Dickinson Pension Scheme for UK

Employees

c/o Julie Arnold
Becton Dickinson UK Limited
21 Between Towns Road
Cowley
Oxford
OX4 3LY

Our ref JSF/GAR/BEC.047-0003
Your ref

Date 27 September 2006

Dear Julie

Becton Dickinson Pension Scheme for UK Employees (the "Scheme")

I understand that Becton Dickinson UK Limited as Principal Employer of the Scheme has made the Trustees of the Scheme ("the Trustees") aware of a shareholder proposal that requires the Board of Directors of Becton, Dickinson & Company (the Principal Employers ultimate holding company) to prohibit investments by certain retirement plan funds, including the Scheme, in companies that are wholly or partly engaged in the manufacture of cigarettes.

1 BACKGROUND

1.1 Under UK law the Scheme is an entirely separate legal entity from the Principal Employer and as a result the Principal Employer does not control the Scheme. The assets of the Scheme are held by the Trustees, under a trust arrangement.

1.2 Under Clause 5(b) of the Trust Deed and Rules of the Scheme dated 1 August 1983 ("the Trust Deed and Rules") the Trustees are solely responsible for the investment of the assets of the Scheme. This dovetails with Section 34(1) of the Pensions Act 1995, which states that Trustees have the same power to make an investment of any kind as if they were absolutely entitled to the assets of the Scheme. The Trustees are only required to consult with the Principal Employer as to the policy for the investment of the assets of the Scheme - this means that the Trustees do not need to obtain the agreement of the Principal Employer before investment decisions are taken. Therefore, the Trustees could choose to ignore entirely any submissions made by the Principal Employer during the consultation process.

1.3 In addition, under Section 36 of the Pensions Act 1995 before investing in any manner the Trustees must obtain and consider "proper advice" in writing. The advice must be from an investment adviser who is either regulated under the Financial Services and Market Act 2000, or is qualified by his ability in and practical experience of financial matters and has the appropriate knowledge and experience of the management of the investment of the assets of pension schemes.

2 LAW

2.1 The Trustees must exercise their investment powers in the best interests of both present and future members of the Scheme, treating the different classes of member impartially. Case law ¹ confirms that as the purpose of the Scheme is to provide financial benefit to its members, the best interests of the members is normally achieved by obtaining the best possible financial return.

2.2 When the Trustees are making investment decisions they must put to one side their own interests and views. The Trustees may be firmly opposed to investment in cigarette manufacturers, however if available investments of this type would be more beneficial to the members than other available investments, the Trustees must not refrain from making those investments.

2.3 The Trustees actions are also subject to a regulatory framework. The Pensions Regulator's guidance on this issue supports the guidance provided to date under case law and states, "It is also the trustees' duty to act in the best interests of the scheme beneficiaries. As far as investments are concerned this normally means their best financial interests ... you should put aside your personal views on the ethical aspects of particular investments and get the best financial return that is achievable at the desired level of security and risk. However, you can consider non-financial matters when comparing investments with the same potential return. So you can choose a particular investment which you find more attractive for ethical reasons, as long as the ethical investment is likely to perform as well as, or better than, the non-ethical investment."

2.4 Accordingly the paramount duty of the Trustees is to provide the greatest financial benefits for the present and future members. If the Trustees take a decision on social and ethical grounds alone they are likely to be criticised by the membership. If in fact the alternate investment taken on social or moral grounds is equally beneficial, for example has an equal financial performance to the investment in cigarette manufacturers then criticism of the decision would be hard to sustain. If however, the replacement investment in fact proved less beneficial then the Trustees would be open to criticism and an action against them for breach of trust.

2.5 The conclusions to be drawn are that investment responsibility lies with the Trustees (subject to consultation with the Principal Employer) and that social and ethical criteria alone without reference to the performance of the alternate investments is not appropriate for determining the investments of the Scheme.

3 CONCLUSION

3.1 As stated above, the investment power in respect of the assets under the Scheme is solely in the hands of the Trustees, subject to consultation with the Principal Employer (whose guidance does not need to be implemented). For the Principal Employer of the Scheme to force the Trustees to act in accordance with the shareholder proposal, which would be to stop investments in cigarettes manufacturers without reference to the financial performance of alternative investments, would not be permissible given the legal and regulatory framework within which the Trustees operate.

If you have any questions in respect of the above, please do not hesitate to contact me.

Yours sincerely

/s/

Georgina Rankin
Hammonds
Solicitors

-----FOOTNOTES-----

¹ Cowan and others v Scargill and others [1985] Ch 270 - [1984] 2 All ER 750 [1984] 2 WLR 501 - [1990] PLR 169 - [1984] ICR 646 - [1984] IRLR 260 - (1984) 81 LSG 2463 - (1984) 128 SJ Martin v The City of Edinburgh District Council [1989] PLR - [1988] SLT 329

[APPENDIX]
Appendix C

September 29, 2006

U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, N.E.
Washington, D.C. 20549

Dear Sir or Madam:

I understand that Becton, Dickinson and Company, a New Jersey corporation (the "Company" or "BD") received a shareholder proposal and supporting statement from Peter Bell (the "Proponent") on June 13, 2006 (the "Proposal") that the Proponent intends to have included in the Company's proxy material relating to its 2007 Annual Meeting.

I have reviewed the letter from Sarah Beshar of Davis Polk & Wardwell to the Securities and Exchange Commission, dated as of September 29, 2006 (the "DPW Letter"), the Proposal and such other documents as I have deemed necessary or appropriate as a basis for the opinion set forth herein.

This will advise you that, in my opinion, the Proposal is, under the laws of the State of New Jersey, not a proper subject for action by BD's shareholders and, therefore, it may be omitted from BD's 2007 proxy statement and form of proxy pursuant to Rule 14a-8(i)(1) under the Securities Exchange Act of 1934, as amended. I therefore concur in the analysis of New Jersey law set forth in the DPW Letter.

I understand that BD intends to file a copy of this opinion with the Securities and Exchange Commission pursuant to Rule 14a-8(j)(2)(iii) and I consent to such filing.

I am licensed to practice law and a member in good standing of the Bar of the State of New Jersey. I have reviewed the New Jersey Business Corporation Act (the "Act") and the Company's certificate of incorporation (the "Certificate"). Nothing in the Act or the Certificate suggests that any entityother than the Boardis responsible for the business and affairs of the Company. For purposes of this opinion, I do not purport to be an expert on the laws of any jurisdiction other than the laws of the State of New Jersey and applicable laws of the United States of America, and I express no opinion herein as to the effect of any other laws.

Very truly yours,

/s/

Dean J. Paranicas

[STAFF REPLY LETTER]
November 14, 2006

Response of the Office of Chief Counsel Division of Corporation Finance

Re: Becton, Dickinson and Company Incoming letter dated September 29, 2006

The proposal requires the board to prevent the investment of any company funds in companies wholly or partly engaged in the manufacture of cigarettes.

There appears to be some basis for your view that Becton, Dickinson may exclude the proposal under rule 14a-8(i)(1), as an improper subject for shareholder action under applicable state law. It appears that this defect could be cured, however, if the proposal was recast as a recommendation or request to the board of directors. Accordingly, unless the proponent provides Becton, Dickinson with a proposal revised in this manner, within seven calendar days after receiving this letter, we will not recommend enforcement action to the Commission if Becton, Dickinson omits the proposal from its proxy materials in reliance on rule 14a-8(i)(1).

We are unable to conclude that Becton, Dickinson has met its burden of establishing that the proposal would violate applicable federal law. Accordingly, we do not believe that Becton, Dickinson may omit the proposal from its proxy materials in reliance on rule 14a-8(i)(2).

Sincerely,

/s/

Ted Yu
Special Counsel