UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.  )

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Teleflex Incorporated

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155 South Limerick Road, Limerick, Pennsylvania 19468

 

 

Notice of Annual Meeting of Stockholders

To Be Held on April 30, 2010

 

 

March 26, 2010 

 

TO THE STOCKHOLDERS OF TELEFLEX INCORPORATED:

 

The Annual Meeting of Stockholders of Teleflex Incorporated (the “Annual Meeting”) will be held on Friday, April 30, 2010 at 11:00 a.m., local time, at the Dolce Valley Forge Hotel, 301 West Dekalb Pike, King of Prussia, Pennsylvania 19406, for the following purposes:

 

1. To elect three directors of the Company to serve for a term of three years, until their successors have been elected and qualified;

 

2. To vote upon a proposal to ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the 2010 fiscal year; and

 

3. To transact such other business as may properly come before the meeting.

 

The Board of Directors has fixed Monday, March 8, 2010, as the record date for the meeting. This means that owners of the Company’s common stock at the close of business on that date are entitled to receive notice of and to vote at the Annual Meeting.

 

STOCKHOLDERS ARE REQUESTED TO DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE. NO POSTAGE IS NECESSARY IF MAILED IN THE UNITED STATES OR CANADA. YOU MAY ALSO VOTE BY TELEPHONE BY CALLING TOLL FREE 1-800-PROXIES (776-9437), OR VIA THE INTERNET AT WWW.VOTEPROXY.COM.

 

By Order of the Board of Directors,

 

LAURENCE G. MILLER, Secretary

 

 

PLEASE VOTE — YOUR VOTE IS IMPORTANT

 

TABLE OF CONTENTS

 

TELEFLEX INCORPORATED
155 South Limerick Road
Limerick, Pennsylvania 19468

 

 

PROXY STATEMENT

 

 

This proxy statement is furnished to stockholders in connection with the solicitation of proxies by the Board of Directors for use at the Company’s Annual Meeting of Stockholders to be held on Friday, April 30, 2010, 11:00 a.m. local time, at the Dolce Valley Forge Hotel, 301 West Dekalb Pike, King of Prussia, Pennsylvania 19406. The proxies may also be voted at any adjournment or postponement of the Annual Meeting. Only stockholders of record at the close of business on March 8, 2010, the record date for the meeting, are entitled to vote. Each owner of record on the record date is entitled to one vote for each share of common stock held. On the record date, the Company had 39,866,423 shares of common stock outstanding.

 

This proxy statement and the enclosed form of proxy are being mailed to stockholders on or about March 26, 2010. A copy of the Company’s 2009 Annual Report is provided with this proxy statement.

 

The Company will pay the cost of solicitation of proxies. In addition to this mailing, proxies may be solicited, without extra compensation, by our officers and employees, by mail, telephone, facsimile, electronic mail and other methods of communication. The Company reimburses banks, brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses in forwarding solicitation materials to the beneficial owners of the Company’s common stock.

 

Important Notice Regarding the Availability of Proxy Materials
for the Stockholder Meeting to be Held on April 30, 2010

 

This proxy statement, the accompanying Notice of Annual Meeting, proxy card and our 2009 Annual Report are available at http://www.teleflex.com/ProxyMaterials.

 

 

It is your way of legally designating another person to vote for you. That other person is called a “proxy.” If you designate another person as your proxy in writing, the written document is called a “proxy” or “proxy card.”

 

 

It is a document required by the Securities and Exchange Commission (the “SEC”) that contains information about the matters that stockholders will vote upon at the Annual Meeting. The proxy statement also includes other information required by SEC regulations.

 

 

A quorum is the minimum number of stockholders who must be present or voting by proxy in order to conduct business at the meeting. A majority of the outstanding shares, whether present in person or represented by proxy, will constitute a quorum at the Annual Meeting. Shares represented by proxies marked to “abstain” from voting for a proposal or to “withhold” voting for one or more nominees and broker non-votes are counted for purposes of determining the presence of a quorum.

 

 

A broker “non-vote” occurs when a nominee, such as a broker or bank, holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner.

 

 

To be elected at the meeting, a director nominee must receive the affirmative vote of a majority of the votes cast. A majority of the votes cast means that the number of votes cast in favor of a director nominee must exceed the number of votes cast against that director nominee. Abstentions and broker non-votes will have no effect on the vote. In the event that a nominee currently serving as a director fails to receive the vote required for election, that director nominee is required to promptly tender his or her resignation under the director resignation policy adopted as part of our Corporate Governance Principles. The Board, upon the recommendation of the Governance Committee, must then decide whether to accept the resignation or whether other action should be taken.

 

The affirmative vote of a majority of the votes cast is necessary to ratify the appointment of PricewaterhouseCoopers LLP and to approve any other proposal. Abstentions and broker non-votes will not be included in the vote count and will have no effect on the vote.

 

 

You may vote through any of the following methods:

 

 

The shares represented by a proxy will be voted in accordance with the instructions you provide in the proxy card or that you submit via telephone or the internet, unless the proxy is revoked before it is exercised. Any proxy card which is signed and returned without any markings indicating how you

wish to vote will be counted as a vote FOR the election of the director nominees described in this proxy statement and FOR the ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2010.

 

If your shares are held by a broker, bank or other holder of record, please refer to the instructions it provides for voting your shares. If you want to vote those shares in person at the Annual Meeting, you must bring a signed proxy from the broker, bank or other holder of record giving you the right to vote the shares.

 

 

You may revoke your proxy at any time before the proxy is exercised by submitting a notice of revocation or submitting an executed proxy card bearing a later date to the Secretary of Teleflex at our principal executive offices, at 155 South Limerick Road, Limerick, Pennsylvania 19468. You also may revoke your proxy by attending the Annual Meeting in person and voting by ballot. Attendance at the Annual Meeting will not by itself revoke a previously granted proxy.

 

Our Board of Directors (the “Board”) currently consists of eleven members divided into three classes, with one class being elected each year for a three-year term. At the Annual Meeting, three directors will be elected for terms expiring at our Annual Meeting of Stockholders in 2013 and until their successors are elected and qualified. The Board, upon the recommendation of the Governance Committee, has nominated Patricia C. Barron, Jeffrey A. Graves and James W. Zug for election to the Board for three-year terms. Each nominee is a continuing director who previously was elected by our stockholders.

 

Our goal is to assemble a Board that operates cohesively and works with management in a constructive way so as to deliver long term shareholder value. In addition, the Board believes it operates best when its membership reflects a diverse range of experiences and areas of expertise. To this end, the Board seeks to identify in each candidate areas of knowledge or experience that would expand or complement the Board’s existing expertise in overseeing a company such as ours. Our Corporate Governance Guidelines provide that directors are expected to possess the highest character and integrity and to have business, professional, academic, government or other experience which is relevant to our business and operations. However, there is no set list of qualities or areas of expertise used by the Board in its analysis because the inquiry assesses the attributes each particular candidate could bring to the Board in light of the then-current make-up of the Board. We believe our current directors possess valuable experience in a variety of areas necessary to guide Teleflex in the best interests of the stockholders. Information regarding each of our nominees and continuing directors, including his or her experience, qualifications, attributes and skills that led the Board to conclude that the individual should serve on the Board, is set forth below.

 

Nominees for election to the Board of Directors — Terms expiring in 2013

 

 

 

The persons named in the enclosed proxy intend to vote properly executed proxies for the election of Ms. Barron and Messrs. Graves and Zug. We do not anticipate that any nominee will be unable or unwilling to stand for election, but if that happens, the proxies may be voted for one or more substitute nominees designated by the Board, or the Board may decide to reduce the number of directors.

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE
“FOR” THE ELECTION OF ALL NOMINEES.

The following individuals currently serve as directors in the two other classes. Their terms will end at the Annual Meetings in 2011 and 2012, respectively.

 

Terms expiring in 2011

 

 

Terms expiring in 2012

 

 

 

Our Corporate Governance Principles, including guidelines for the determination of director independence, the operations, structure and meetings of the Board, the committees of the Board and other matters relating to our corporate governance, are available on the Investors page of our website, www.teleflex.com. Also available on the Investors page are other corporate governance documents, including the Code of Ethics, the Code of Ethics for Chief Executive Officer and Senior Financial Officers, the Charter of the Audit Committee, the Charter of the Governance Committee and the Charter of the Compensation Committee. You may also request these documents in print form by contacting us at Teleflex Incorporated, 155 South Limerick Road, Limerick, Pennsylvania 19468, Attention: Secretary. Any amendments to, or waivers of, the codes of ethics will be disclosed on our website promptly following the date of such amendment or waiver.

 

The Board has affirmatively determined that George Babich, Jr., Patricia C. Barron, William R. Cook, Jeffrey A. Graves, Stephen K. Klasko, Sigismundus W.W. Lubsen, Stuart A. Randle, Benson F. Smith, Harold L. Yoh III and James W. Zug are independent within the meaning of the rules of the New York Stock Exchange (the “NYSE”). All of the independent directors meet the categorical standards set forth in the Corporate Governance Principles described below, which were adopted by the Board to assist it in making determinations of independence. The Board has further determined that the members of the Audit Committee, the Compensation Committee and the Governance Committee are independent within the meaning of NYSE rules, and that the members of the Audit Committee meet the additional independence requirements of the NYSE applicable to Audit Committee members.

 

To assist the Board in making determinations of independence, the Board has adopted the following categorical standards. The Board may determine that a director is not independent notwithstanding that none of the following categorical disqualifications apply. However, if any of the following categorical disqualifications apply, a director may not be considered independent.

 

 

In 2006, the Board established the position of Lead Director. The Lead Director is an independent director of the Board whose duties and responsibilities include:

 

The independent directors of the Board have the authority to make decisions concerning the Lead Director, including the power to appoint and remove the Lead Director and the authority to modify the Lead Director’s duties and responsibilities. The Lead Director is appointed annually by the independent directors of the Board. Mr. Cook, who was initially elected to the position in 2006, continues to serve as our Lead Director.

 

The positions of Chairman and Chief Executive Officer are combined at Teleflex. We believe that our Chief Executive Officer is best situated to serve as Chairman because he is the director most familiar with our business and most capable of effectively identifying strategic priorities and leading the discussion and execution of strategy. Moreover, our Chief Executive Officer is able to effectively communicate Board strategy to the other members of management and efficiently implement Board directives.

 

In order to provide independent oversight and input, all of the other directors on our Board are independent. Our Chief Executive Officer is not a member of any committee of the Board, and the independent directors frequently meet in executive sessions outside the presence of management and under the leadership of our Lead Director, as discussed in more detail below under “Executive Sessions of Non-Management Directors.” The role and responsibilities afforded the Lead Director further enhance the Board’s ability to evaluate management performance and otherwise fulfill its oversight responsibilities. The chief executive officer consults with the Lead Director on the proposed

agendas for Board and committee meetings in order to make sure that key issues and concerns of the Board are addressed.

 

Directors who are not executive officers or otherwise employed by us or any of our subsidiaries, who we refer to as the “non-management directors,” meet regularly in accordance with a schedule adopted at the beginning of each year and on such additional occasions as a non-management director may request. Such meetings are held in executive session, without the presence of any directors who are executive officers. The Lead Director presides over such meetings.

 

Stockholders or other interested persons wishing to communicate with members of the Board should send such communications to Teleflex Incorporated, 155 South Limerick Road, Limerick, Pennsylvania 19468, Attention: Secretary. These communications will be forwarded to specified individual directors, or, if applicable, to all the members of the Board as deemed appropriate. Stockholders or other interested persons may also communicate directly and confidentially with the Lead Director, the non-management directors as a group or the Chairman or other members of the Audit Committee through the Teleflex Ethics Hotline at 1-866-490-3413 or, via the Internet, at www.teleflexethicsline.com.

 

The Board held seven meetings in 2009. Each of the directors attended at least seventy-five percent of the total number of Board meetings held in 2009. The Board does not have a formal policy concerning attendance at its Annual Meeting of Stockholders, but encourages all directors to attend. All of the Board members attended the 2009 Annual Meeting of Stockholders.

 

The Board has established a Governance Committee, a Compensation Committee and an Audit Committee.

 

Governance Committee

 

The Governance Committee is responsible for identifying qualified individuals for Board membership and recommending individuals for nomination to the Board and its committees. In addition, the Governance Committee reviews and makes recommendations to the Board as to the size and composition of the Board and Board committees and eligibility criteria for Board and Board committee membership. The Governance Committee also is responsible for developing and recommending corporate governance principles to the Board and overseeing the evaluation of the Board and management.

 

The Governance Committee considers candidates for Board membership. Our Corporate Governance Principles provide that directors are expected to possess the highest character and integrity, and to have business, professional, academic, government or other experience which is relevant to our business and operations. In addition, directors must be able to devote substantial time to our affairs. The charter of the Governance Committee provides that in evaluating nominees, the Governance Committee should consider the attributes set forth above. Under our Corporate Governance Principles, a director must retire from the Board at the expiration of his or her term following attainment of age 70, except in special circumstances that must be described in a resolution adopted by the Board requesting such director to defer retirement.

 

The Governance Committee will consider recommendations for director candidates from stockholders. Stockholders can recommend candidates for nomination by delivering or mailing written recommendations to Teleflex Incorporated, 155 South Limerick Road, Limerick, Pennsylvania 19468, Attention: Secretary. In order to enable consideration of the candidate in connection with our 2011

Annual Meeting, a stockholder must submit the following information by no later than January 29, 2011:

 

In considering any candidate proposed by a stockholder, the Governance Committee will reach a conclusion based on the criteria described above. The Governance Committee may seek additional information regarding the candidate. After full consideration, the stockholder proponent will be notified of the decision of the Governance Committee. The Governance Committee will consider all potential candidates in the same manner regardless of the source of the recommendation.

 

The current members of the Governance Committee are Ms. Barron and Messrs. Cook, Klasko and Lubsen. Ms. Barron currently serves as the chair of the Governance Committee. The Governance Committee held four meetings in 2009. Each of the members of the Governance Committee attended at least seventy-five percent of the total number of Governance Committee meetings held in 2009.

 

Compensation Committee

 

The duties and responsibilities of the Compensation Committee include, among others, the following:

 

The current members of the Compensation Committee are Messrs. Graves, Randle, Smith and Yoh. Mr. Smith currently serves as the chair of the Compensation Committee. The Compensation Committee held five meetings in 2009. Each of the members of the Compensation Committee attended at least seventy-five percent of the total number of Compensation Committee meetings held in 2009.

 

Audit Committee

 

The Audit Committee has responsibility to assist the Board in its oversight of the following matters, among others:

 

The Audit Committee has sole authority to appoint, retain, compensate, evaluate and terminate the independent registered public accounting firm, and reviews and approves in advance all audit and lawfully permitted non-audit services performed by the independent registered public accounting firm. In addition, the Audit Committee periodically meets separately with management, our independent auditors and our own internal auditors. The Audit Committee also periodically discusses with management our policies with respect to risk assessment and risk management.

 

Stockholders may contact our Audit Committee to report complaints about our accounting, internal accounting controls or auditing matters by writing to the following address: Teleflex Incorporated, 155 South Limerick Road, Limerick, Pennsylvania 19468, Attention: Audit Committee. Stockholders can report their concerns to the Audit Committee anonymously or confidentially.

 

The current members of the Audit Committee are Messrs. Cook, Babich and Zug. Mr. Zug currently serves as the chair of the Audit Committee. The Audit Committee held eight meetings in 2009. Each of the members of the Audit Committee attended at least seventy-five percent of the total number of Audit Committee meetings held in 2009. The Board has determined that each of the Audit Committee members is an “audit committee financial expert” as that term is defined in SEC regulations.

 

The Board, acting principally through the Audit Committee, is actively involved in the oversight and management of risks that could affect us. It fulfills this function largely through its oversight of our annual company-wide risk assessment process, which is designed to identify our key strategic, operational, compliance and financial risks, as well as to identify steps to mitigate and manage each risk. The risk assessment process is conducted by our Business Ethics and Compliance Committee, or “BECC,” which is comprised of several members of Teleflex senior management. The BECC directs our compliance officers to survey and conduct interviews of several of our key business leaders, functional heads and other managers to identify and discuss the key risks of Teleflex, including the potential magnitude and likelihood of each risk. As part of this process, the senior executive responsible for managing the risk, the potential impact of the risk and management’s initiatives to manage the risk are identified and discussed. After receiving a report of the risk assessment results from the compliance officers, the BECC reviews and discusses the results with the Audit Committee. Thereafter, the Audit Committee provides the full Board with an overview of the risk assessment process, the key risks identified and measures being taken to address those risks. Due to the dynamic nature of risk, the overall status of our enterprise risks are updated periodically during the course of

each year and reviewed with the Audit Committee. We believe this process facilitates the Board’s ability to fulfill its oversight responsibilities of our risks.

 

As noted above, the Compensation Committee is charged with overseeing the review and assessment of our compensation policies and practices. We use a number of approaches to mitigate excessive risk taking in designing our compensation programs, including significant weighting towards long-term incentive compensation, emphasizing qualitative goals in addition to quantitative metrics and equity ownership guidelines. We believe the risks arising from our compensation policies and practices for our employees are not reasonably likely to have a material adverse effect on our company.

 

Directors who are also employees of ours receive no additional compensation for their service as directors. Non-management directors receive an annual cash retainer of $25,000, which is payable in equal monthly installments. In addition, non-management directors are paid the following equity based compensation under our stock compensation plans:

 

 

The non-management directors also receive a fee for each Board meeting attended of $2,000 for meetings attended in person and $1,000 for participation by telephone. Members of our Audit, Compensation and Governance Committees also receive a fee of $1,000 for each committee meeting attended, whether in person or by telephone. In addition, the Lead Director receives an annual restricted stock award having a market value of $20,000 on the grant date. The chairpersons of our Audit, Compensation and Governance Committees receive an additional annual fee of $12,500, $7,500 and $7,500, respectively.

 

We provide the non-management directors with $100,000 of life insurance and $100,000 of accidental death or dismemberment coverage during their service on the Board. We do not provide any pension benefits to the non-management directors.

 

The table below summarizes the compensation paid to non-management directors during the fiscal year ended December 31, 2009.

 

 

 

 

In February 2008, our Board established stock ownership guidelines for our directors to further align the interests of our directors with those of our stockholders. The ownership guidelines require our directors to own shares of our common stock, shares of restricted stock and shares underlying stock options with an aggregate value equal to two times the annual compensation paid to our directors. Directors have until the later of February 2013 or five years from the date they are first elected to the Board to meet the required ownership level. As of December 31, 2009, each director had either satisfied these ownership guidelines or had time remaining to do so.

 

The Audit Committee oversees and reviews with the full Board any issues with respect to the Company’s financial statements, our internal control over financial reporting, the structure of our legal and regulatory compliance, the performance and independence of our independent registered public accounting firm and the performance of our internal audit function. Management has primary responsibility for preparing our consolidated financial statements and for our financial reporting process. Management also has the responsibility to assess the effectiveness of our internal control over financial reporting. Our independent registered public accounting firm, PricewaterhouseCoopers LLP, is responsible for expressing an opinion on (i) whether our financial statements present fairly, in all material respects, our financial position and results of operations in accordance with generally accepted accounting principles and (ii) the effectiveness of our internal control over financial reporting.

 

The Audit Committee maintains oversight of our internal audit function by reviewing the appointment and replacement of our director of internal auditing and periodically meets with the director of internal auditing to receive and review reports of the work of our internal audit department. The Audit Committee meets with management on a regular basis to discuss any significant matters, internal audit recommendations, policy or procedural changes, and risks or exposures, if any, that may have a material effect on our financial statements.

 

The Audit Committee has:

 

 

Based on the review and discussions referred to above, the Audit Committee recommended to our Board, and the Board has approved, the inclusion of the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2009, for filing with the SEC.

 

AUDIT COMMITTEE

 

 

 

In this Compensation Discussion and Analysis, we address the compensation paid or awarded to our executive officers listed in the Summary Compensation Table that follows this discussion. We refer to these executive officers as our “named executive officers.”

 

Compensation Objectives

 

Our executive compensation program is designed principally to promote the achievement of specific annual and long-term goals by our executive management team and to align our executives’ interests with those of our stockholders. In this regard, the components of the compensation program for our executives, including the named executive officers, are intended to meet the following objectives:

 

We have fashioned the components of our 2009 executive compensation program to meet these objectives as follows:

 

 

Role of Compensation Committee and Executive Officers

 

The Compensation Committee of our Board of Directors is responsible for the oversight of our executive compensation program. The Compensation Committee makes all decisions concerning compensation awarded to our executive officers, other than Jeffrey P. Black, our Chairman, Chief Executive Officer and President. Determinations concerning Mr. Black’s compensation are made by the independent members of our Board of Directors upon the recommendation of the Compensation Committee.

 

Mr. Black, with the assistance of our human resources department, provides statistical data to the Compensation Committee to assist it in determining appropriate compensation levels for our executives. Mr. Black also provides the Compensation Committee with recommendations as to components of the compensation of our executives. Mr. Black does not make recommendations as to his own compensation. While the Compensation Committee utilizes this information, and values Mr. Black’s observations with regard to other executive officers, the ultimate decisions regarding executive compensation are made by the Compensation Committee.

Periodically, our human resources department seeks input, including statistical information and survey data, from an outside compensation consultant with respect to executive compensation decisions. Since 2003, our human resources department has periodically engaged Mercer (US) Inc., which we refer to below as “Mercer,” to provide these services. In addition, the Compensation Committee may separately engage a compensation consultant to assist it in making determinations with respect to executive compensation matters. In 2009, the Compensation Committee engaged Towers, Perrin, Forster & Crosby, Inc., which we refer to below as “Towers Perrin,” to provide it with market data in connection with our entry into a new employment agreement with Mr. Black. See “Ongoing and Post-Employment Arrangements — Employment Agreement for Jeffrey P. Black” below, for further information. In addition, our Compensation Committee engaged Frederic W. Cook & Co., Inc., which we refer to as “FW Cook,” to assist the Compensation Committee with respect to a review of our executive compensation methodology and determinations for 2010. See “Determination of Compensation — Changes in Compensation Methodology for 2010” below for a further discussion of the engagement of FW Cook.

 

Determination of Compensation

 

Introduction

 

During 2009, as a result of the economic downturn, we determined not to undertake the comparative analysis we typically conducted in previous years. This analysis has been based on survey data provided by Mercer and, as a secondary point of evaluation to validate compensation decisions, compensation data from a peer group of companies. However, the data typically used would not have provided information about current trends under rapidly changing economic conditions. Because of our uncertainty as to the effect that economic conditions were having on practices of the companies subject to the analysis, and our own uncertainty as to the effect of economic conditions on our business, we decided not to reference the comparative data we typically use to set compensation. Instead, we determined to maintain salary, target short-term incentive compensation and target equity compensation at levels generally equivalent to 2008 levels. See “Determination of Compensation — Compensation Methodology” for a discussion of the methodology used to establish 2008 compensation levels.

 

In addition, over the past several years we have engaged in a number of acquisitions and dispositions that have shifted the focus of our operations towards our Medical Segment. In 2009, we further refined our portfolio of businesses through the disposition of businesses within our Commercial and Aerospace segments. As a result, our Medical Segment now represents over 77% of our revenues from continuing operations and over 90% of our segment operating profit. This development led our Compensation Committee to conduct a thorough review of our compensation program to determine what changes would be appropriate to address, among other things, the shift in our operations towards the healthcare industry. In this regard, the Compensation Committee determined that it would be appropriate to retain its own independent compensation consultant to provide recommendations regarding compensation methodology and determinations in 2010. See “Determination of Compensation — Changes in Compensation Methodology for 2010” for further information.

 

Compensation Methodology

 

We generally review the compensation of our executive officers on an annual basis to ensure that they are compensated at levels consistent with our executive compensation methodology, as discussed in more detail below. However, as discussed above, in 2009 we decided to maintain salary, target short-term incentive and long-term incentive compensation for our executive officers at 2008 levels without reference to a comparative review. The discussion in the following two paragraphs provides a general overview of our customary use of a comparative analysis with respect to executive compensation determinations in 2008, which ultimately formed the basis for our 2009 compensation structure.

In making our compensation determinations in 2008 and prior years, we periodically referenced reports provided by Mercer that included compensation data derived from several published compensation surveys. These surveys provided information regarding compensation paid by manufacturing companies to executives in functionally comparable positions to our executives. The survey data was size adjusted by Mercer using a regression analysis where available; otherwise, we limited the sample to companies having annual revenues ranging from approximately 0.5 to 2 times our annual revenues. Mercer provided samplings with respect to functionally comparable executives from 100 to 400 companies, depending on the comparable executive position. We refer to these companies as the “general market companies.” In 2008 and prior years, we generally sought to position executive salaries to approximate the median of the salaries paid to comparable executives by the general market companies, while positioning total direct compensation, which includes salaries and the target amount of annual bonus and long-term compensation, to approximate the 65th percentile of total direct compensation paid by the general market companies. We also sought to position total cash compensation, which includes salary and target amount of annual bonus, to approximate the 65th percentile of the market. In addition, we have considered Mercer’s advice that compensation that is within 15 percent above or below the amount payable is within the competitive range we are seeking.

 

Nevertheless, we have set compensation below or above these levels as we deem appropriate. Factors that have affected our determination included the executive’s role within the organization, individual performance and comparable data relating to a peer group of publicly traded manufacturing companies selected by our Compensation Committee, which we refer to as the “peer group companies.” In 2008 and prior years, we used the peer group companies as a secondary point of evaluation to validate compensation decisions, and in certain instances we adjusted compensation in response to peer group data. The peer group companies in 2008 included the following:

 

 

Changes in Compensation Methodology for 2010

 

As noted above, the Compensation Committee retained FW Cook to assist it with regard to compensation methodology and determinations for 2010. Based on, among other things, data and recommendations provided by FW Cook, the Compensation Committee decided to institute several changes regarding our compensation methodology for 2010, which are described below.

 

In response to the fact that we are now principally a provider of medical products, the Compensation Committee determined it would be appropriate to change the composition of our peer group to include only companies in the medical industry. The companies in the new peer group are the following:

 

 

In addition, the Compensation Committee modified its survey sources to include not only a general industry survey or surveys, but also a survey that would capture a greater proportion of companies engaged in businesses within the medical industry. The Compensation Committee also determined to elevate the significance of the peer group data by giving it the same weight as the

survey data in connection with the comparative analysis, rather than using the peer group only as a secondary point of evaluation.

 

Finally, although the Compensation Committee has always retained, and sometimes exercised, the ability to set compensation levels above or below targeted percentiles of compensation paid by the general market companies, as described above, it nevertheless determined that the positioning standards previously used were too rigid. In considering a change in approach, the Compensation Committee noted that our size, principally in terms of our revenues and market capitalization, but also in terms of our operating income, operating margin and net income, ranged between approximately the median to the 75th percentile of the peer group companies. Therefore, the Compensation Committee determined that our compensation should be deemed competitive if it is between the 50th and 75th percentile of the companies referenced in the comparative data. This range will provide more flexibility to the Compensation Committee in structuring executive compensation. However, this range is intended to serve as a guideline in setting and adjusting our compensation programs, and actual amounts of compensation that we pay to our executives may be more or less than the target range in any given year.

 

Determinations with respect to 2010 Compensation will be addressed in the proxy statement for the 2011 annual meeting of stockholders.

 

Salaries

 

Base salary ranges for our executives are determined based on each executive’s position and responsibility and are typically considered annually as part of our performance review process. In addition, salary reviews may occur at other times due to events such as a promotion or other change in job responsibility.

 

As discussed above, in light of the recent global economic downturn, for 2009 we decided to maintain compensation for our executive officers at 2008 levels. Therefore, none of our executive officers received salary increases in 2009.

 

Annual Executive Incentive Compensation

 

Annual Incentive Award Components

 

We provide annual cash incentive opportunities to subject a meaningful amount of an executive’s total cash compensation to the achievement of business performance objectives. Under our annual incentive plan, 80 percent of the target award opportunity is based on corporate or business segment financial performance measures, while the remaining 20 percent of the target award opportunity is based on individual performance. We have weighted the annual incentive awards largely to the financial performance measures because we believe that emphasizing corporate or business unit financial performance encourages a unified commitment by our executives to performance that we believe directly affects stockholder value.

 

2009 Award Components

 

In 2009, the criteria under our annual incentive program for our named executive officers who do not have responsibility for a specific business segment, namely Messrs. Black, Gordon and Miller, were as follows:

 

 

 

We use EPS as a performance measure because we believe that a fundamental objective of an executive officer is to significantly increase stockholder value, and for a large, well established manufacturing enterprise like ours, EPS is a key metric affecting share price and, thus, stockholder value. We excluded restructuring and other special charges from our EPS target because such charges are not contained within our principal earnings guidance and adjusted results reported to investors. We excluded the effect of divestitures and significant acquisitions because they are extraordinary events that do not reflect the day-to-day management of our business and are generally not a part of our annual planning process. We had no significant acquisitions in 2009. However, we had one divestiture in each of our Aerospace and Commercial segments in 2009. We use cash flow from continuing operations as a performance measure because we believe it is an important indicator of our ability to service indebtedness, make capital expenditures and provide flexibility with regard to the pursuit of other operating initiatives. We excluded the effect of divestitures and significant acquisitions from this measure for the reasons stated above with respect to the EPS measure. We include individual performance as a performance measure in order to focus our executives on achievement of individual performance and company non-financial performance, which may include compliance and regulatory initiatives. Performance under this measure is determined based upon satisfaction of individual performance objectives that are established at the beginning of the preceding fiscal year. Evaluation of the satisfaction of these objectives is conducted under our annual performance review process.

 

For Messrs. Waaser and Northfield, who have direct responsibility with respect to our Medical segment, the criteria under our 2009 annual incentive program were as follows:

 

 

We believe that PBFI is a reliable overall measure of the performance of a business segment. Therefore, we believe that a significant portion of the financial performance-based component for an executive who is responsible for a business segment should be based on this measure. We excluded the impact of restructuring and other special charges, businesses divested during the year and significant acquisitions from this measure for the reasons stated above. Our Medical Segment had no divestitures or significant acquisitions in 2009. We excluded the impact of foreign currency fluctuations from PBFI because it is a factor that is generally outside of the control of our executives with responsibility for individual business segments. We included revenue growth without giving effect to

acquisitions, divestitures or foreign currency fluctuations because we wanted to emphasize the importance of sales growth with respect to our core operations. We use asset velocity index as a performance measure because we believe that an important factor in our performance is the effective utilization of our cash resources and other working capital items. Executives with responsibility for individual business segments are most directly involved in managing these assets; therefore, we applied this performance measure to them. We included individual performance as a performance criteria for Messrs. Waaser and Northfield, and increased the weighting of this factor from 10 percent in 2008 to 20 percent because we believed it was important to encourage achievement of individual performance and Medical Segment non-financial performance. Performance under this measure is determined based on satisfaction of individual performance objectives established for these executives at the beginning of the preceding fiscal year. As with Messrs. Black, Gordon and Miller, evaluation of the satisfaction of the objectives established for Messrs. Waaser and Northfield is conducted under our annual performance review process.

 

For 2009, an executive’s incentive award payout related to EPS could range from 50 percent of the target award, if threshold levels of performance equivalent to approximately 96 percent of the EPS target were achieved, to 200 percent of the target award, if the maximum performance level equivalent to approximately 115 percent of the EPS target was achieved or exceeded. With respect to the cash flow measure, an executive’s opportunity ranged from 50 percent of the target award, if threshold levels of performance equivalent to approximately 95 percent of the cash flow target were achieved, to 200 percent of the target award, if the maximum performance level equivalent to approximately 112 percent of the cash flow target was achieved or exceeded. The award payout for PBFI could range from 50 percent of the target award, if threshold levels of performance equal to 95 percent of the PBFI target were achieved, to 200 percent of the target award if the maximum performance level of 115 percent of the PBFI target were achieved or exceeded. Award payouts related to revenue growth could range from 50 percent of the target award, if threshold levels of performance equal to 97 percent of the revenue growth target were achieved, to 200 percent of the target award, if the maximum performance level of 115 percent of the revenue growth target were achieved or exceeded. With respect to the AVI measure, an executive’s opportunity ranged from 100 percent of the target award if the target levels were achieved to 200 percent if certain maximum performance targets were achieved or exceeded. In addition, depending on the extent to which the executive satisfies the objectives, he may receive no payment or a payment of up to 200 percent of the individual performance component of the target award opportunity.

 

2009 Executive Incentive Compensation Targets and Awards

 

The target award payable to a named executive officer for 2009 if the target financial performance-based objective or objectives were achieved and 100 percent of the individual performance component award opportunity was paid is equal to a percentage of the executive’s salary, as shown on the following table:

 

The following table provides information for each named executive officer regarding applicable performance measures, targets and actual payments with respect to 2009 based on the degree of achievement with respect to each performance measure:

 

 

For 2009, the individual performance objectives established for Mr. Black included achievement of our financial and growth targets, development and execution of our strategic plan, achievement of certain critical objectives, which included objectives related to the FDA compliance efforts of our Medical Segment and integration efforts related to our acquisition of Arrow International, investor relations and communications efforts related to our portfolio transition and support for our Board of Directors. The individual performance objectives established for each of our other named executive officers included various matters related to their specific functions, including matters relating to the development and implementation of our overall strategy and, with respect to our Medical Segment executives, efforts related to our regulatory compliance initiatives.

 

The actual award payments in respect of the financial performance measures are reflected in the “Non-Equity Incentive Compensation” column of the Summary Compensation Table, while amounts paid to our named executive officers in respect of the individual performance measure are reflected in the “Bonus” column of the Summary Compensation Table.

 

Supplemental Bonus Awards

 

In reviewing the awards paid out under our annual incentive program, our Compensation Committee determined that it would be inequitable if we failed to provide an award to our executive officers and other managerial personnel who had direct responsibility for our Medical Segment, in recognition of the contribution of that segment to our overall results, particularly in light of the difficult economic environment that confronted the segment in 2009. In addition, the Compensation Committee believed it would be appropriate to recognize the Medical Segment for the significant synergies achieved in 2009 in connection with our acquisition of Arrow International and the considerable efforts of our Medical Segment management team with respect to our FDA compliance program. Moreover, the Compensation Committee believed the award would serve to enhance our ability to retain Medical Segment managers, including Messrs. Waaser and Northfield. Therefore, our Compensation

Committee approved a supplemental cash bonus pool for our Medical Segment managers, including Messrs. Waaser and Northfield. The Compensation Committee determined that the bonus pool, representing approximately 18% of the amount that would have been paid with respect to the Medical Segment financial measures under the annual incentive program had target levels of performance been met, provided meaningful recognition of our Medical Segment managers’ contributions to our 2009 financial results, while remaining well below the award that would have been payable had target levels of performance been achieved. The awards paid to Messrs. Waaser and Northfield are reflected in the “Bonus” column of the Summary Compensation table.

 

Equity Incentive Compensation

 

Our equity incentive compensation program is designed to promote achievement of corporate goals, encourage the growth of stockholder value and enable participation in our long-term growth and profitability. The equity incentive compensation opportunity established for each of our named executive officers was designed to be equivalent to 150 percent to 300 percent of a named executive officer’s salary because those percentages fell within the competitive range of the 65th percentile of the market, and also reflected contributions of each position to the organization’s objectives, individual performance and other factors. We refer to this percentage of salary as the “equity incentive percentage.” The 2009 equity incentive percentage for each named executive officer and the dollar amount of the executive’s equity compensation opportunity was as follows:

 

 

 

 

Our equity incentive compensation for 2009 included stock options and restricted stock awards. We designed these components and the weighting of our equity compensation to align the interests of our named executive officers to our stockholders by providing an incentive to our executives for the favorable impact on the value of our common stock.

 

In 2009, we allocated 65 percent of the equity incentive award to stock options because we believed that stock price appreciation should be the principal determinant of the economic return received by our executives from equity compensation, and absent such appreciation, stock options would have no value. The remaining 35 percent of the equity award was allocated to restricted stock awards, which we granted to provide a retention incentive for our executives and an incentive to increase shareholder value.

 

We routinely evaluate and consider the type of awards granted under our equity incentive program and may, in the future, decide that other types of awards provide appropriate incentives to promote our then current goals and objectives.

 

Stock Option Awards

 

In accordance with the equity award allocation described above, we granted stock options to our named executive officers in 2009 based upon 65 percent of the total equity incentive compensation opportunity. Using a Black Scholes methodology, we valued the stock options at $11.83 per underlying share.

As a result of these computations, the named executive officers received stock options for the respective numbers of underlying shares set forth below in the Grants of Plan-Based Awards table under the column heading, “All Other Option Awards: Number of Securities Underlying Options.” The dollar amount for option awards shown in the Summary Compensation Table generally reflects the aggregate grant date fair value of the award determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, “Compensation— Stock Compensation,” which we refer to below as “ASC Topic 718.” See note 2 to the Summary Compensation Table for further information.

 

Stock options awarded under the equity incentive compensation program are granted in the first quarter of each year and have an exercise price equal to the closing price of our common stock on the date of grant. Our options generally vest in equal annual increments on the first three anniversaries of the date of grant. We believe that these vesting terms, together with the restricted stock component of our equity incentive program, provide our executives with a meaningful incentive for continued employment. For additional information regarding stock option terms, see the footnotes accompanying the Grants of Plan-Based Awards table.

 

Restricted Stock Awards

 

In 2009, we granted restricted stock awards to our named executive officers based upon 35 percent of the total equity incentive compensation opportunity. Using a Black Scholes methodology, we valued the restricted stock at $49.33 per underlying share.

 

As a result of these computations, the named executive officers received restricted stock awards for the respective numbers of underlying shares set forth below in the Grants of Plan-Based Awards table under the column heading, “All Other Stock Awards: Number of Shares of Stock or Units.” The dollar amount for restricted stock awards shown in the Summary Compensation Table generally reflects the aggregate grant date fair value of the award determined in accordance with ASC Topic 718. See note 2 to the Summary Compensation Table for further information.

 

Restricted stock awards under the equity incentive program are granted in the first quarter of each year and vest in their entirety on the third anniversary of the date of grant. As noted above, we believe that these vesting terms, together with the stock option component of our equity incentive program, provide our executives with meaningful incentive for continued employment. For additional information regarding restricted stock award terms, see the footnotes accompanying the Grants of Plan-Based Awards table.

 

2007-2009 Long-Term Cash Incentive Award Opportunity

 

Prior to 2008, we provided our executives with an opportunity to receive a cash award based on total shareholder return over a three year measurement period as compared to the peer group companies. “Total shareholder return” is the appreciation in value of a share of stock of a company from the first trading day to the last trading day of the specified performance period, assuming reinvestment of dividends. Payment is based on a sliding scale so that the amount of the payment generally increases to the extent that our total shareholder return exceeds the total shareholder return of the peer group companies. Specifically, if our total shareholder return exceeds the return of five of the 11 peer group companies, the threshold payment equal to 72 percent of the target award would be paid. If our total shareholder return exceeds one-half of the peer group companies, 100 percent of the target amount would be paid. The maximum payout, equal to 200 percent of the target amount, would be paid if our total shareholder return exceeds that of at least ten of the peer group companies. These award levels were subject to adjustment in the event that merger or acquisition activity changes the number of peer group companies.

 

The three year performance period for the cash incentive opportunity awarded in 2007 was completed in 2009. For that period, our total shareholder return did not meet the minimum threshold

for payment. As the cash incentive award program was replaced in 2008 with restricted stock awards, there are no further cash incentive awards outstanding for our executives.

 

Personal Benefits

 

We provide our named executive officers with personal benefits that we believe are appropriate as part of a competitive compensation package that we believe better enables us to attract and retain highly skilled executives. We periodically review the levels of perquisites and other personal benefits provided to our named executive officers. The personal benefits currently provided to our named executive officers include a company car, life insurance coverage and, with respect to Mr. Black, personal use of our corporate aircraft. Additional information regarding these benefits is provided in the Summary Compensation Table and the accompanying footnotes.

 

Employment of Richard A. Meier

 

In January 2010, we appointed Richard A. Meier our Executive Vice President and Chief Financial Officer. In connection with his appointment, Mr. Meier is receiving an annual salary of $500,000. His target award opportunity under our annual incentive program is equal to 80 percent of his salary, and his equity incentive percentage under our equity compensation program is equal to 200 percent of his salary. The Compensation Committee also granted Mr. Meier a special equity award of stock options to purchase 33,833 shares of our common stock, which will vest in three equal annual installments, and 3,511 shares of restricted stock, which will vest in their entirety on the third anniversary of the grant date. The Compensation Committee approved these grants following the negotiation and approval of compensatory terms relating to Mr. Meier’s appointment. While we referenced industry data in structuring Mr. Meier’s compensation, the final terms of his compensation were arrived at through negotiation.

 

We have several plans and agreements addressing compensation for our named executive officers that accrue value as the executive continues to work for us, provide special benefits upon certain types of termination events and provide retirement benefits. These plans and agreements were designed to be a part of a competitive compensation package that would encourage our executives to remain employed by us. Not all plans apply to each named executive officer, and the participants are indicated in the discussion below.

 

Employment Agreement for Jeffrey P. Black

 

As previously disclosed, in March 2009 we entered into a new employment agreement with Mr. Black under which he continues to serve as our President and Chief Executive Officer. The agreement has a three-year term ending in March 2012. Mr. Black’s agreement provides that he will receive an annual base salary of at least $900,000, and will be eligible to participate in the annual incentive, long-term incentive and equity compensation programs that we provide for our senior executives, as well as to participate in our retirement and welfare benefit plans and programs. The agreement also provides that Mr. Black will be reimbursed by us for premiums on $1 million of life insurance coverage. In addition, Mr. Black will be entitled to personal use of company aircraft for up to fifty hours per year, subject to an annual limit of $100,000 in incremental cost to us to provide this benefit.

 

The agreement provides Mr. Black with the right to receive continuation of his base salary, an additional amount equal to 100% of his base salary, health insurance and other benefits for a three-year period if we terminate his employment without cause or if Mr. Black terminates his employment for good reason (as defined in the agreement), other than in connection with a change of control (as defined in the agreement). Mr. Black’s agreement also entitles him to receive certain payments upon a termination of his employment in connection with a change of control. For a further discussion of the

payments that may be made to Mr. Black upon termination of his employment, see “Potential Payments Upon Termination or Change in Control.”

 

In connection with the negotiation of the new agreement, our Compensation Committee considered Mr. Black’s experience, his performance since he became our Chief Executive Officer, his prior compensation, our financial performance and, with assistance from Towers Perrin, market data with respect to CEO compensation. In addition, the Compensation Committee retained outside legal counsel to assist it in its consideration and negotiation of the terms of the new employment agreement. Upon conclusion of its review, the Compensation Committee recommended that we enter into a new employment agreement with Mr. Black on terms substantially similar to those in his 2006 employment agreement in all material respects, subject to the following changes:

 

 

After review of materials provided by Towers Perrin, and discussions with Towers Perrin and outside legal counsel, the Compensation Committee determined that these changes were appropriate in light of current general market practices with respect to employment and severance arrangements.

 

Based upon the recommendation of the Compensation Committee, the Board approved our entry into a new employment agreement with Mr. Black on the terms described above.

 

Executive Severance Arrangements

 

In addition to our employment agreement with Mr. Black, we have entered into agreements with each of our other named executive officers that provide payments and other benefits to them if, outside of the context of a change in control, we terminate their employment without cause or they terminate employment for “good reason.” The severance compensation consists of continued payment of the executive’s base salary for a minimum of 18 months and, in some circumstances, the payment of a pro rated amount of the annual incentive award the executive would have been entitled to for the year in which his employment was terminated. In addition, the executive is entitled to receive continued health insurance for up to 18 months after termination. See “Potential Payments Upon Termination or Change in Control” for additional information.

 

Change in Control Arrangements

 

We have change in control arrangements with each of our named executive officers. The terms of Mr. Black’s change in control arrangement are set forth in Mr. Black’s employment agreement, and the terms of our change in control arrangements with each of our other named executive officers are set forth in a change of control agreement that we have entered into with each of the executives. Our agreement with each executive provides for payments and other benefits to the executive if we terminate the executive’s employment for any reason other than disability or cause or if the executive terminates employment for “good reason” within two years following a change in control. The change in control provisions in Mr. Black’s employment agreement differ from the change in control provisions for the other named executive officers with respect to the amount of the payments upon the relevant termination following the change in control. For a more detailed discussion of these arrangements, see “Potential Payments Upon Termination or Change in Control,” below. If an executive, other than

Mr. Black or Mr. Meier, becomes liable for payment of any excise tax under Section 4999 of the Internal Revenue Code with respect to any payment received in connection with a change in control, we will make an additional payment to the executive. This payment is designed so that, after payment of all excise taxes and any other taxes payable in respect of the additional payment, the executive will retain the same amount as if no excise tax had been imposed. See “Tax Considerations” below for further information regarding the additional payment. Effective in 2009, we determined to no longer include the additional payment provisions in change of control agreements with persons who become executive officers.

 

We entered into the change in control arrangements so that our executives can focus their attention and energies on our business during periods of uncertainty that may occur due to a potential change in control. In addition, we want our executives to support a corporate transaction involving a change in control that is in the best interests of our stockholders, even though the transaction may have an effect on the executive’s continued employment with us. We believe these arrangements provide a key incentive for our executives to remain with us.

 

We provide certain retirement benefits to our executive officers that also are offered to our general employee population. In addition, we maintain certain supplemental plans for our executives that are intended to promote tax efficiency and replace the benefit opportunities lost due to regulatory limits on broad-based tax-qualified plans. Through 2008, these benefits primarily were provided through a combination of defined benefit and defined contribution arrangements. The defined benefits principally were provided for under the Teleflex Incorporated Retirement Income Plan, or TRIP, which was a tax qualified defined benefit plan designed to provide benefits to all salaried employees following retirement based upon a formula relating to years of service and annual compensation. In addition, we maintained a Supplemental Executive Retirement Plan, or SERP, which was a non-qualified defined benefit plan designed to provide benefits for executives to the extent that their compensation cannot be taken into account under the TRIP because the compensation exceeds limits imposed under the Internal Revenue Code. See the Pension Benefits table and accompanying narrative, and “Potential Payments Upon Termination or Change in Control” for additional information.

 

Effective December 31, 2008, we “froze” future benefit accruals under the TRIP and the SERP. In lieu of the benefits offered under the TRIP, we amended our 401(k) Plan to provide for an enhanced company matching contribution, effective as of January 1, 2009. Under this new approach, participants are eligible to receive a 100% matching contribution with respect to the first 5 percent of eligible compensation contributed by the participant. In addition, the SERP was replaced with a non-qualified defined contribution arrangement under our Deferred Compensation Plan. Under this arrangement, non-elective company contributions are made to each participant’s account under the Deferred Compensation Plan in an amount equal to 5% of the participant’s annual cash compensation, less the maximum matching contribution the participant was eligible to receive under our 401(k) Plan. In addition, participants have an opportunity to receive a matching contribution of up to 3% of their annual cash compensation with respect to amounts deferred by the participant into the Deferred Compensation Plan. In connection with the new deferred compensation arrangement, we contributed an amount equal to the present value of each active participant’s account in the SERP at December 31, 2008 into an account maintained for the active participants under our Deferred Compensation Plan and terminated the SERP. We took these measures to eliminate uncertainty in planning for and funding defined benefit obligations, to provide a more cost-effective way of providing competitive retirement benefits to employees, and to provide a benefit that can be retained by a participant to the extent it is accrued at the time the employee ceases to be employed by Teleflex. Each of the Company’s named executive officers currently participates in the 401(k) Plan and the new defined contribution arrangement under our Deferred Compensation Plan. See the Nonqualified Deferred Compensation table and accompanying narrative for further information.

 

We maintain a Deferred Compensation Plan, which is a non-qualified plan under which executives may defer certain amounts of their annual and long-term incentive compensation. Salary deferral elections are made annually by eligible executives in respect of salary amounts to be earned in the following year. Participants may direct the investment of deferred amount into a fixed interest fund or one or more notional funds. All of the named executive officers are eligible to participate in the Deferred Compensation Plan. In connection with the shift from a defined benefit to a defined contribution approach with respect to our retirement benefits discussed above, we amended our Deferred Compensation Plan, effective January 1, 2009, to include provisions related to company contributions added to the plan in lieu of future benefit accruals under the SERP. See the “Non-qualified Deferred Compensation — 2009” table for additional information.

 

Section 162(m) of the Internal Revenue Code limits to $1 million the deductibility for federal income tax purposes of annual compensation paid by a publicly held company to its chief executive officer and other executives named in the Summary Compensation Table, unless certain conditions are met. To the extent feasible, we structure executive compensation to preserve deductibility for federal income tax purposes. In this regard, our stock compensation plans are designed to preserve, to the extent otherwise available, the deductibility of income realized upon the exercise of stock options. Moreover, our Executive Incentive Plan is designed to facilitate the deductibility of the non-discretionary portion of annual bonus awards and the previously granted long-term cash incentive awards that meet the conditions for “qualified performance-based compensation” under Section 162(m). Nevertheless, we retain the discretion to authorize compensation that may not be deductible. The compensation paid to Mr. Black in 2009 exceeded the deductible limit by approximately $320,161. In addition, it is possible that some portion of compensation paid to our executives in future years will be non-deductible, particularly if a change-in-control occurs.

 

As noted above, under our change in control arrangements, we will make an additional payment to our executives, other than Mr. Black and Mr. Meier, if payments to them resulting from a change in control are subject to the excise tax imposed by Section 4999 of the Internal Revenue Code. It is possible that a change in control could result in our making additional payments to our executives. As noted above, we will not provide for these payments in change of control agreements with persons who become executive officers in the future.

 

In February 2008, our Board established stock ownership guidelines for our named executive officers and other executives to further align the interests of management with those of our stockholders and to further encourage long-term performance and growth. The ownership guidelines are expressed in terms of the value of the common stock, restricted stock and stock options, including shares in our 401(k) plan, held by the executive as a multiple of that executive’s base salary, which are as follows:

 

 

Executives who are subject to the ownership guidelines have until the later of February 2013 or five years after the date of their appointment or promotion as an executive officer to meet the required ownership level. As of December 31, 2009, each of our named executive officers had either satisfied these ownership guidelines or had time remaining to do so.

 

The Compensation Committee of the Company has reviewed and discussed with management the Compensation Discussion and Analysis required by SEC regulations and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

 

BENSON F. SMITH, CHAIRMAN

 

 

The following table sets forth compensation information with respect to the Company’s Chief Executive Officer, Chief Financial Officer and each of the three other most highly compensated executive officers during 2009, determined in accordance with SEC regulations, for the fiscal years ended December 31, 2009, 2008 and 2007. These individuals are referred to in this Proxy Statement as the “named executive officers.”

 

 

 

 

 

						Deferred
		401(k)				Compensation				Life Insurance
Name		Contributions				Contributions				Premiums				Tax Gross-Ups				Perquisites(a)
Mr. Black		$	12,250			$	151,910			$	13,184			$	4,924			$	90,614
Mr. Gordon		$	12,250			$	61,929			$	1,403				–			$	22,617
Mr. Waaser		$	12,250			$	34,635			$	1,002				–			$	13,579
Mr. Miller		$	12,250			$	37,188			$	1,403				–			$	26,250
Mr. Northfield		$	12,250			$	27,205			$	1,002				–			$	33,482

 

 

 

 

In March 2009, we entered into an employment agreement with Mr. Black, which provides for his employment as our President and Chief Executive Officer through March 2012. Mr. Black’s agreement provides that he will receive an annual base salary of at least $900,000, and will be eligible to participate in the annual incentive, long-term incentive and equity compensation programs that we provide for our senior executives, as well as to participate in our retirement and welfare benefit plans and programs. The agreement also provides that Mr. Black will be reimbursed by us for premiums on $1 million of life insurance coverage. In addition, Mr. Black will be entitled to personal use of company aircraft for up to fifty hours per year, subject to an annual limit of $100,000 in incremental cost to us to provide this benefit.

 

Mr. Black’s employment agreement provides for certain payments and benefits to be made available to him in the event his employment is terminated under certain circumstances, which are described below under “Potential Payments Upon Termination or Change in Control.”

 

The following table sets forth information regarding our grants of plan based awards to the named executive officers during the fiscal year ended December 31, 2009:

 

 

 

 

The following table sets forth information with respect to the outstanding stock options and unvested restricted stock held by each named executive officer on December 31, 2009:

 

 

 

The following table sets forth information regarding the number of shares acquired on the exercise of stock options by, and the vesting of restricted stock held by, the named executive officers during the fiscal year ended December 31, 2009.

 

 

 

 

We have sponsored the Teleflex Incorporated Retirement Income Plan (“TRIP”), a qualified defined benefit pension plan. Effective January 1, 2006, the TRIP was closed to new employees, and, effective January 1, 2009, no further benefits could be accrued under the TRIP.

 

Under the TRIP, a participant accumulated units of annual pension benefit for each year of service. With respect to the years of service applicable to the named executive officers, a participant’s unit was equal to 1.375% of his or her prior year’s annual plan compensation not in excess of social security covered compensation, plus 2.0% of such compensation in excess of the social security covered compensation. The annual plan compensation taken into account under this formula included base salary and annual incentive award payments.

 

Participants in the TRIP generally vested in their plan benefits after completing five years of qualifying service or, if earlier, upon reaching normal retirement age, which, for purposes of the TRIP, is age 65. In addition to the normal retirement benefit, the TRIP provides reduced benefits upon early retirement, which may occur after a participant has reached age 60 and has completed 10 years of qualifying service. The TRIP also provides limited benefits upon termination due to disability.

 

All of our named executive officers, other than Mr. Waaser, participate in the TRIP. Mr. Waaser has not participated in the TRIP because his employment commenced after the date on which the TRIP was closed to new participants. The table below shows, as of December 31, 2009, the number of years of service credited under the TRIP to each named executive officer that has participated in those plans and the present value of accumulated benefits payable to each such named executive officer under such plans.

 

 

 

 

We maintain a Deferred Compensation Plan, under which executives, including the named executive officers, may defer up to 100% of their cash compensation (salary, annual incentive awards and, if applicable, long-term cash incentive awards). Participants also may defer awards of restricted stock or restricted stock units. Salary and restricted stock deferral elections are made by eligible executives in December of each year in respect of salary to be earned and restricted stock awards to be granted in the following year. With respect to deferral elections for annual incentive and long-term cash incentive awards, the election must be made no later than six months prior to the end of the performance period applicable to such award. Participants in our Deferred Compensation Plan may direct the investment of deferred amounts into a fixed interest fund or one or more notional funds, and the value of the participants’ investments will increase or decrease based on the performance of the underlying securities.

 

The following table shows the funds available under the Deferred Compensation Plan and their annual rate of return for the calendar year ended December 31, 2009. Account balances in the Teleflex stock fund must remain in that fund and cannot be transferred to any other investment option. Additionally, distributions of balances invested in the Teleflex stock fund are made in the form of shares of Teleflex stock; distributions from other funds are payable in cash.

 

 

A participant may elect to receive payment of deferred amounts, either in a lump-sum or in annual installments over five or ten years, commencing upon separation from service, on a fixed date following separation from service or on an alternative date selected by the participant. Changes in the time or form of payment may be made in compliance with advance notice requirements under the plan, provided that the commencement of the revised payment schedule must be deferred by at least five years from the original date.

 

In 2009, we replaced the defined benefit arrangement offered under our former non-qualified defined benefit supplemental retirement plan, or SERP, with a non-qualified defined contribution arrangement under our Deferred Compensation Plan. Under this arrangement, non-elective company contributions are made to each participant’s account under the Deferred Compensation Plan in an amount equal to 5% of the participant’s annual cash compensation, less the maximum matching contribution the participant was eligible to receive under our 401(k) Plan. A participant will become vested in the additional contribution once the participant has completed five years of service or, if earlier, upon reaching age 65, death or total disability. In addition, participants have an opportunity to receive a matching contribution of up to 3% of their annual cash compensation with respect to amounts deferred by the participant into the Deferred Compensation Plan. As part of the transition to this new defined contribution arrangement, for 2009 only, we provided a matching contribution equal to 3% of the amount of the annual incentive award paid to a participant as long as the participant elected to defer at least 3% of his or her base salary for 2009. This approach was taken for the transition year to address the fact that the opportunity for matching contributions with respect to annual incentive awards did not exist at the time participants had the opportunity to elect to defer annual incentive awards earned in 2008 and payable in 2009. A participant will become vested in the matching contributions once the participant has completed two years of service or, if earlier, upon reaching age 65, death or total disability.

As previously disclosed, in connection with the transition to the defined contribution arrangement provided under the Deferred Compensation Plan, we contributed an amount equal to the present value of each active participant’s account in the SERP at December 31, 2008. This amount is reflected in the “Nonqualified Deferred Compensation – 2009” table under the “Aggregate Balance at Last Fiscal Year End” column. A participant will become vested in the SERP amount after the participant has been credited with five years of continuous service, determined in accordance with the TRIP or, if earlier, upon reaching age 65. See “Pension Benefits – 2009” above for information regarding years of credited service under the TRIP. We do not provide any additional contributions with respect to these amounts.

 

The following table sets forth information for the fiscal year ended December 31, 2009 regarding contributions, earnings and balances under our deferred compensation plans for each named executive officer: