Notes to Consolidated Financial Statements

The Company has an Employee Stock Ownership Plan (“ESOP”) as part of its voluntary defined contribution plan (Savings Incentive Plan) covering eligible employees in the United States. The ESOP was established to satisfy all or part of the Company’s obligation to match 50% of employees’ contributions, up to a maximum of 3% of each participant’s salary. To accomplish this, in 1990, the ESOP borrowed $60,000 in a private debt offering and used the proceeds to purchase from the Company an issue of ESOP convertible preferred stock (the “ESOP Preferred Stock”). The ESOP Preferred Stock paid an annual dividend of $3.835 per share, a portion of which was used by the ESOP, together with the Company’s contributions, to service the ESOP debt. Since the ESOP debt was guaranteed by the Company, it had been reflected on the Consolidated Balance Sheets as debt with a related amount shown in the Shareholders’ Equity as Unearned ESOP compensation. In July 2004, the Company repaid the ESOP debt in full. In December 2004, the Trustee of the ESOP converted all of the outstanding shares of ESOP Preferred Stock into BD common stock. This was done in response to the November 2004 dividend declaration, which reflected a 20% increase in the common dividend versus the preceding quarter and increased the difference between the common dividend and the fixed dividend payable on the ESOP Preferred Stock (on an equivalent share basis). The share conversion occurred at the rate of 6.4 BD common shares for each share of ESOP Preferred Stock. In April 2005, the shares in the ESOP were allocated to plan participants. As a result, the Company meets its matching obligation by contributing cash to the ESOP, which is used by the Trustee of the ESOP to purchase BD common stock at prevailing market prices.

     The amount of ESOP expense recognized is equal to the cost of shares allocated to plan participants. Prior to July 2004, the amount of ESOP expense recognized was equal to the cost of the ESOP Preferred Stock allocated to plan participants and the ESOP interest expense for the year, reduced by the amount of dividends paid on the ESOP Preferred Stock that were utilized by the plan to service the debt.

     Selected financial data pertaining to the ESOP/Savings Incentive Plan follows:

	2005			2004			2003
Total expense of the    Savings Incentive Plan	$	6,905		$	2,252		$	2,626
Compensation expense    (included in total expense above)	$	6,905		$	2,137		$	2,168
Dividends on ESOP Preferred Stock    used for debt service	$	—		$	1,592		$	2,344
Number of shares allocated at    September 30 ESOP Preferred Stock		—			503,011			500,807

     The Company guarantees employees’ contributions to the fixed income fund of the Savings Incentive Plan, which consists of diversified money market instruments. The amount guaranteed was $136,460 at September 30, 2005.