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.  )

Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
o     Preliminary Proxy Statement
o     Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ     Definitive Proxy Statement
o     Definitive Additional Materials
o     Soliciting Material Pursuant to §240.14a-12

 
Teleflex Incorporated

 (Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

þ		No fee required.
o		Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

	(1)		Title of each class of securities to which transaction applies:
	(2)		Aggregate number of securities to which transaction applies:
	(3)		Per unit or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
	(4)		Proposed maximum aggregate value of transaction:
	(5)		Total fee paid:

o		Fee paid previously with preliminary materials.
o		Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

	(1)		Amount Previously Paid:
	(2)		Form, Schedule or Registration Statement No.:
	(3)		Filing Party:
	(4)		Date Filed:

155 South Limerick Road, Limerick, Pennsylvania 19468

 

 

Notice of Annual Meeting of Stockholders

To Be Held on May 1, 2009

 

 

March 27, 2009 

 

TO THE STOCKHOLDERS OF TELEFLEX INCORPORATED:

 

The Annual Meeting of Stockholders of Teleflex Incorporated (the “Annual Meeting”) will be held on Friday, May 1, 2009 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 four 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 2009 fiscal year; and

 

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

 

The Board of Directors has fixed Monday, March 9, 2009, 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, May 1, 2009, 11:00 a.m. local time, at the Dolce Valley Forge Hotel at 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 9, 2009, the “Record Date,” 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 39,746,764 shares of common stock outstanding.

 

This proxy statement and the enclosed form of proxy are being mailed to stockholders on or about March 27, 2009. A copy of the Company’s 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 May 1, 2009

 

This proxy statement, the accompanying Notice of Annual Meeting and our 2008 Annual Report are available at http://www.teleflex.com/2009ProxyMaterials.

 

 

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.

 

 

A plurality of the votes cast at the meeting is required to elect directors; that is, the four nominees receiving the highest number of votes for the class whose term expires at the 2012 Annual Meeting will be elected.

 

The affirmative vote of a majority of outstanding shares present, in person or by proxy, and entitled to vote is necessary to ratify the appointment of PricewaterhouseCoopers LLP and to approve any other proposal.

 

Abstentions will be included in the vote count and have the same effect as voting “against” a proposal. 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 nominees for election as directors

described in this proxy statement and FOR the ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2009.

 

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 may also revoke your proxy by attending the Annual Meeting in person and giving notice of your intention to vote at the Annual Meeting. 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, four directors will be elected for terms expiring at our Annual Meeting of Stockholders in 2012 and until their successors are elected and qualified. The Board, upon the recommendation of the Governance Committee, has nominated Jeffrey P. Black, Sigismundus W.W. Lubsen, Stuart A. Randle and Harold L. Yoh III for election to the Board for three-year terms.

 

Messrs. Black, Lubsen and Yoh are continuing directors who previously were elected by our stockholders. Mr. Randle is a new nominee who will fill the vacancy in this class created as a result of Judith von Seldeneck’s resignation from the Board. Mrs. von Seldeneck, who served as a director of the Company since 2003, resigned from the Board in December of 2008 in order to devote additional time to her position as Chairman and Chief Executive Officer of Diversified Search Ray & Berndtson. The Board is grateful to Mrs. von Seldeneck for her contributions to our company.

 

The persons named in the enclosed proxy intend to vote properly executed proxies for the election of Messrs. Black, Lubsen, Randle and Yoh. 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.

 

Information with respect to the nominees and continuing directors is set forth below.

 

Nominees for election to the Board of Directors — Terms expiring in 2012

 

 

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 2010 and 2011, respectively.

 

 

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: Corporate Communications. 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 March 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 currently serves as the Lead Director.

 

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 six meetings in 2008. Each of the directors attended at least seventy-five percent of the total number of Board meetings held in 2008. 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 2008 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.

 

During 2008, we retained a third-party search firm to assist in identifying and evaluating potential director candidates. This third-party search firm identified and assisted in evaluating Stuart A. Randle as a candidate for the Board.

 

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 2010 Annual Meeting, a stockholder must submit the following information by November 27, 2009:

 

 

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 Mrs. Barron and Messrs. Cook, Lubsen and Klasko. Mrs. Barron currently serves as the chair of the Governance Committee. The

Governance Committee held six meetings in 2008. Each of the members of the Governance Committee attended at least seventy-five percent of the total number of Governance Committee meetings held in 2008.

 

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, Smith and Yoh. Mr. Smith currently serves as the chair of the Compensation Committee. The Compensation Committee held seven meetings in 2008. Each of the members of the Compensation Committee attended at least seventy-five percent of the total number of Compensation Committee meetings held in 2008.

 

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

registered public accounting firm 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 six meetings in 2008. Each of the members of the Audit Committee attended at least seventy-five percent of the total number of Audit Committee meetings held in 2008. 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.

 

Directors who are also employees of ours or any of our subsidiaries 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 currently 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, 2008.

 

 

 

 

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, 2008, each director had either satisfied these ownership guidelines or had time remaining to do so.

 

The Audit Committee of the Board of Directors is comprised of three non-management directors, each of whom has been determined by the Board to be independent under the rules of the NYSE and the SEC. The Audit Committee’s responsibilities are set forth in its amended and restated charter, which was adopted by the Board on March 7, 2005.

 

Generally, the Audit Committee oversees and reviews with the full Board any issues with respect to the Company’s financial statements, 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) the conformity of our annual consolidated financial statements to generally accepted accounting principles and whether those financial statements present fairly, in all material respects, our financial position and results of operations 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 also taken the following actions:

 

 

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, 2008, 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 2008 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 and our compensation consultant, Mercer (US) Inc., which we refer to below as “Mercer,” 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. In addition, the Compensation Committee

may separately engage a compensation consultant to assist it in making determinations with respect to executive compensation matters.

 

Determination of Compensation

 

Introduction

 

In 2007, we executed a number of acquisitions and divestitures designed to provide greater consistency of performance, improved profitability and sustainable growth. The most significant of these transactions was our acquisition of Arrow International, a leading global provider of catheter-based access and therapeutic products for critical and cardiac care, and the divestiture of our automotive and industrial businesses. Together, these transactions changed the nature of our businesses from a diversified industrial company to a company principally engaged in the medical technology business. As a result, in 2008, our Compensation Committee engaged in a review of our compensation program for executive officers and determined that certain adjustments to our compensation practices were appropriate to reflect these changes in our business. The following discussion summarizes the compensation determinations made with respect to compensation of our named executive officers in 2008.

 

2008 Compensation Determinations

 

In making our compensation determinations, we periodically reference reports provided by Mercer that include compensation data Mercer derives from several published compensation surveys. These surveys provide information regarding compensation paid by manufacturing companies to executives in functionally comparable positions to our executives. The survey data is 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. In making our compensation decisions for 2008, we utilized a Mercer report that referenced data from a survey completed in 2005. 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 light of the fact that we wish to emphasize a performance orientation in our compensation program, we position base salaries to be at a lower level relative to the general market companies than total direct compensation, which includes the target amounts of annual bonus and equity incentive compensation in addition to base salary. Specifically, we generally seek 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 to approximate the 65th percentile of total direct compensation paid by the general market companies. We also seek to position total cash compensation, which includes salary and target amount of annual bonus, to approximate the 65th percentile of the market. In determining executive compensation in 2008, we considered, among other things, Mercer’s advice that compensation that is within 15 percent above or below the amount payable is within the competitive range we are seeking. We refer to this range as the “competitive range.”

 

While the market data is one reference in our pay determinations, we may set compensation below or above these levels as we deem appropriate. Factors that affected our determination in 2008 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.”

 

We used the peer group companies as a secondary point of evaluation to validate compensation decisions, and in certain instances we have adjusted compensation in response to peer group data. Moreover, as explained in more detail below, the cash incentive opportunities awarded to our executives in prior years under our long-term incentive compensation program were based on our “total shareholder return” as compared to the total shareholder return of the peer group companies.

Our Compensation Committee established and selected the initial companies comprising the peer group companies in 2003, which consisted of diversified industrial companies of roughly comparable size to ours, which we believed were considered by analysts to be competitors for investor capital during that period. In 2008, the Compensation Committee conducted a review of the peer group companies using data provided by Mercer to determine whether any modifications to the group would be necessary or appropriate in light of the significant changes in our operations that occurred in 2007. Upon conclusion of this review, the Compensation Committee determined that the peer group companies should be adjusted to reflect an increased emphasis on the medical industry. The revised peer group companies selected by the Compensation Committee consisted of the following:

 

 

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. As noted above, we generally seek to position salaries for our named executive officers within a competitive range of the median of salaries for positions of comparable responsibility reported by the general market companies. In addition, salary reviews may occur at other times due to events such as a promotion or other change in job responsibility.

 

For 2008, salary increases for each of our named executive officers did not exceed seven percent. In addition, in connection with a decision to discontinue the practice of reimbursing executives for club membership fees and dues, our Board approved a one-time salary adjustment for certain of our named executive officers to compensate them for the elimination of this benefit. The salaries paid to our named executive officers in 2008 were within the competitive range described above.

 

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. In this regard, we design our total cash compensation, which is the sum of an executive’s salary and target amount of annual bonus, to fall within a competitive range of the 65th percentile of total cash compensation for comparable executives in the general market companies, in contrast to the median reference point used in connection with salaries. Nevertheless, the actual amounts of annual bonus paid out to our executives is based on achievement of applicable corporate, business segment or individual performance goals and can vary considerably from the target amount.

 

Under our annual incentive plan, 80 or 90 percent of the target award opportunity, depending on the executive, is based on corporate or business segment financial performance measures, while the remaining 10 or 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.

2008 Award Components

 

In 2008, 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 and are generally disregarded in assessing whether stockholder value has been generated. We excluded the effect of divestitures and significant acquisitions because they reflect extraordinary events that do not affect the day-to-day management of our business and are generally not a part of our annual planning process. We use cash flow from continuing operations as a performance measure because we believe it is an important indicator of our ability to service our 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 for the reasons stated above with respect to the EPS measure. We excluded the impact of foreign currency fluctuations from cash flow because it is a factor that is generally outside of our control. We include individual performance as a performance measure in order to provide our executives with an award opportunity based upon their performance during the preceding fiscal year, including their satisfaction of individual performance objectives that are established at the beginning of the preceding fiscal year.

 

For Mr. Waaser, who has responsibility with respect to our Medical segment, the criteria under our 2008 annual incentive program were as follows:

 

 

For Mr. Northfield, who had responsibility for our Commercial segment until September 2008, seventy-five percent of his annual incentive award opportunity for 2008 was based upon performance of our Commercial segment under the following criteria:

 

 

 

In September of 2008, Mr. Northfield accepted a position with our Medical segment as Executive Vice President, Global Medical Operations. In connection with this change in position, it was determined that twenty-five percent of Mr. Northfield’s award opportunity would be based upon performance of our Medical segment under the criteria described above for Mr. Waaser.

 

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, significant acquisitions and foreign currency fluctuations from this measure for the reasons stated above. 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. In 2008, we added revenue growth without giving effect to acquisitions or divestitures because we wanted to emphasize the importance of sales growth with respect to our core operations. We included individual performance as a performance criteria for Messrs. Waaser and Northfield because we believed it was important to emphasize certain individual performance objectives established for these executives at the beginning of the preceding fiscal year.

 

For 2008, 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 94 percent of the EPS target were achieved, to 200 percent of the target award, if the maximum performance level equivalent to approximately 112 percent of the EPS target was achieved or exceeded. With respect to the cash flow and AVI measures, 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. Award payouts related to Mr. Waaser’s revenue target measure could range from 50 percent to 200 percent of the target award, with a payment of 100 percent of the target award if the revenue target is met. 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.

 

2008 Executive Incentive Compensation Targets and Awards

 

The target award payable to a named executive officer for 2008 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 2008 based on the degree of achievement with respect to each performance measure:

 

 

 

 

For 2008, the individual performance objectives established for Mr. Black included achievement of our financial and growth targets, development and execution of our strategic plan, continued development of senior management succession plans, achievement of certain critical objectives, which included objectives related to the FDA compliance efforts of our Medical Segment and the continuing integration efforts related to our acquisition of Arrow International, continuing efforts with respect to investor relations and communications related to our portfolio transition and continuing to provide 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.

 

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, which 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 February 2009, our Compensation Committee approved a cash bonus award of $63,695 to Mr. Gordon. Mr. Gordon’s award was designed as a discretionary award intended to supplement the long-term incentive award payable to him in respect of the 2006-2008 performance period, which is discussed under “2006-2008 Long-Term Cash Incentive Award Opportunity.” The award opportunity under that plan was based on a percentage of an employee’s salary at the time the award opportunity

was established. However, Mr. Gordon assumed significantly greater responsibilities for more than 60% of the performance period as a result of his promotion to the position of Chief Financial Officer in March 2007, and the Committee believed the award was appropriate to recognize his significant contributions over that period.

 

In addition, in February 2009, our Compensation Committee approved a cash bonus award of $95,000 to Mr. Northfield. This award was designed as a discretionary award intended to recognize the significant contributions made by Mr. Northfield in connection with strategic planning relating to the Commercial Segment. In addition, although Mr. Northfield assumed his responsibilities with regard in the Medical Segment in the later part of the year, the Committee noted his significant contributions to that segment, specifically in connection with his oversight of personnel matters and improvements in inventory management.

 

The bonus award payments described above 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. We seek to fashion equity incentive compensation so that it falls within a competitive range of the 65th percentile of equity compensation for comparable executives of the general market companies. 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 2008 equity incentive percentage for each named executive officer and the dollar amount of the executive’s equity compensation opportunity is as follows:

 

 

Our equity incentive compensation for 2008 included stock options and restricted stock awards issued under our 2000 Stock Compensation Plan. 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 performance of our common stock.

 

In 2008, we allocated 65 percent of the equity incentive award to stock options because we believed that absolute return should be the principal determinant of the economic return received by our executives from equity compensation. The stock options vest in equal annual installments over a three-year period. The remaining 35 percent of the equity award was allocated to restricted stock awards that vest in their entirety on the third anniversary of the grant date. The restricted stock awards replaced the long-term cash incentive award opportunity offered to our executives in prior years, which was payable based upon the extent to which our total shareholder return during a three year performance period exceeded the total shareholder return achieved by the peer group companies. In light of the significant changes in our business that occurred in 2007, we concluded that using total shareholder return relative to the peer group as the basis of a portion of our long-term incentive program was no longer effective, particularly because the peer group utilized in 2007 and prior years does not reflect the current nature of our business. Moreover, uncertain economic conditions and the need for stability in the management of our business suggested that stronger incentives for long-term

executive commitment to our business and to increasing shareholder value were necessary. Therefore, our Board of Directors, upon the recommendation of our Compensation Committee, approved the replacement of the cash award component with restricted stock. We will continue to 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 rationale described above, we granted stock options to our named executive officers in 2008 based upon 65 percent of the total equity incentive compensation opportunity. Using a Black Scholes methodology, we valued the stock options at $14.18 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 dollar amount recognized for financial statement purposes in accordance with Statement of Financial Account Standards 123R. Therefore, it includes amounts with respect to only a portion of the options granted in 2008, while also including amounts from earlier option grants. 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 average of the high and low sales prices of our common stock on the date of grant rounded to the nearest $0.25 increment. 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 new restricted stock component of our equity incentive program, provide our executives with 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 2008, we granted restricted stock awards to our named executive officers based upon 35 percent of the total equity incentive compensation opportunity. Using a grant date fair value calculated in accordance with Statement of Financial Account Standards 123R, we valued the restricted stock at $56.89 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 dollar amount recognized for financial statement purposes in accordance with Statement of Financial Account Standards 123R. Therefore, it includes amounts with respect to only a portion of the restricted stock granted in 2008, while also including amounts from earlier option grants. 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.

Special Equity Award for Vince Northfield

 

In 2008, our Compensation Committee granted Mr. Northfield a special equity award of 5,000 shares of restricted stock, which will vest in its entirety on the second anniversary of the grant date. The Compensation Committee approved these grants in connection with Mr. Northfield’s appointment as Executive Vice President for Global Operations, Teleflex Medical. The equity award is addressed in the “All Other Stock Awards: Number of Shares of Stock or Units” column of the Grants of Plan Based Awards Table and in the accompanying footnotes.

 

2006-2008 Long-Term Cash Incentive Award Opportunity

 

As discussed above, in 2008, our Board decided to replace the long-term cash incentive award opportunity with restricted stock awards. Under the long-term cash incentive award program, our executives were provided 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 peer group companies, the threshold payment equal to 72 percent of the target award will be paid. If our total shareholder return exceeds one-half of the peer group companies, 100 percent of the target amount will be paid. The maximum payout, equal to 200 percent of the target amount, will be paid if our total shareholder return exceeds that of at least ten of the peer group companies. These award levels are subject to adjustment in the event that merger or acquisition activity changes the number of peer group companies.

 

The long-term cash incentive awards described above were granted to our executives on an annual basis during the period from 2004 to 2007. The peer group companies against which our performance was to be measured for each of these awards was the peer group companies in effect from 2003 through 2007, which consisted of the following:

 

 

The three year performance period for the cash incentive opportunity awarded in 2006 was completed in 2008. For that period, our total shareholder return exceeded the return of five of the peer group companies and, therefore, resulted in a payment of 72 percent of the target award to each of our named executive officers, other than Mr. Waaser. Mr. Waaser did not become an employee until November of 2006 and, therefore, was not eligible to participate in the long-term incentive award for the 2006-2008 measurement period. The actual award payments are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.

 

Personal Benefits

 

We provide our named executive officers with personal benefits that we believe are appropriate as part of a competitive compensation package that 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.

 

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

 

We recently entered into a new employment agreement with Mr. Black under which he will continue to serve as our President and Chief Executive Officer. The new agreement provides for a three-year term and replaces the employment agreement we entered into with Mr. Black in May 2006, which was scheduled to expire in May 2009. The compensatory terms of the new agreement are described in the narrative following the Summary Compensation Table. The payments that may be made to Mr. Black upon termination of his employment are described below under “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, Forster & Crosby, Inc., which we refer to below as “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.

 

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 is 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 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. We entered into these 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.

 

Executive Severance Arrangements

 

In addition to the change in control provisions described above, we have also agreed to provide payments and other benefits to our named executive officers if, outside of the context of a change in control, we terminate their employment without cause or they terminate employment for “good reason.” See “Potential Payments Upon Termination or Change in Control” for additional information.

 

We provide certain retirement benefits to our executive officers that are also offered to our general employee population. In addition, we maintain certain supplemental plans for our executives that are intended to promote tax efficiency and replacement of benefit opportunities lost due to regulatory limits in the broad-based tax-qualified plans. Until recently, these benefits were primarily provided though a combination of defined benefit and defined contribution arrangements. The defined benefits were principally 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.

 

In 2008, we engaged in a review of our defined benefit and defined contribution programs, and approved certain strategic changes to our executive and broad-based programs. In connection with these changes, effective December 31, 2008, our Board approved the discontinuation of future benefit accruals under the defined benefit retirement plans covering our employees, including our named executive officers, and the move to a primarily defined contribution plan retirement program. In deciding to shift our focus to a defined contribution approach, we considered several factors. First, defined contribution plans are a cost-effective way for us to provide competitive retirement benefits to employees. Legislation and regulatory requirements make it increasingly difficult for us to plan and budget for the unpredictable costs and potentially negative financial impact of defined benefit plan funding rules. In addition, the movement to a defined contribution approach provides employees with a portable benefit that employees can more easily understand and value. Finally, we considered the fact that a significant number of our operating divisions had already moved to an entirely defined

contribution approach. As such, the movement to a defined contribution program allowed us to provide for greater consistency with respect to the benefits offered to our employees.

 

As part of this strategic move towards a defined contribution retirement program, 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 have amended our 401(k) Plan to provide for an enhanced company matching contribution, effective as of January 1, 2009. Under this new approach, participants will be eligible to receive a 100% matching contribution with respect to the first 5 percent of eligible compensation contributed by the participant. The SERP has been replaced with a non-qualified defined contribution arrangement under our Deferred Compensation Plan, which we refer to as the “New SERP.” Under the New SERP, non-elective company contributions will be made to each participant’s account under the Deferred Compensation Plan in an amount equal to 5% of such participant’s annual cash compensation, less any matching contributions that the participants are eligible to receive under our 401(k) Plan. In addition, participants will 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. Each of the Company’s named executive officers currently participates in the 401(k) Plan and the New SERP.

 

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 the defined contribution arrangement under the New SERP. See the “Non-qualified Deferred Compensation — 2008” 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 2008 exceeded the deductible limit by approximately $1,828,438. 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, 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. Nevertheless, we believe that our payments relating to the excise tax are appropriate to preserve the incentive for executives to maintain their employment with us.

 

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 five years of the later of February 2013 or the date of appointment or promotion as an executive officer to meet the required ownership level. As of December 31, 2008, 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, for the fiscal year ended December 31, 2008, 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, determined in accordance with SEC regulations, for the fiscal years ended December 31, 2008, 2007 and 2006. These individuals are referred to in this Proxy Statement as the “named executive officers.”

 

 

 

 

Name		401(k) Contributions				Life Insurance Premiums				Tax Gross-Ups				Perquisites(a)
Mr. Black			$7,748				$13,399				$4,910				$92,426
Mr. Gordon			$7,749				$1,553				–				$24,508
Mr. Waaser			$11,000				$1,110				–				$18,763
Mr. Miller			$7,416				$1,553				–				$28,880
Mr. Northfield			$4,806				$1,110				–				$39,497

 

 

 

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, 2008:

 

 

 

 

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, 2008:

 

 

 

The following table sets forth information regarding the vesting of the named executive officers’ restricted stock during the fiscal year ended December 31, 2008. None of the named executive officers exercised stock options in 2008.

 

 

 

 

We have sponsored the Teleflex Incorporated Retirement Income Plan (“TRIP”), a qualified defined benefit pension plan, as well as the Supplemental Executive Retirement Plan (“SERP”), which was a non-qualified defined benefit pension plan providing benefits that would otherwise be denied to participants by reason of Internal Revenue Code limitations on compensation that can be taken into account in qualified plans. Effective January 1, 2006, the TRIP and SERP were closed to new employees. Effective January 1, 2009, no further benefits could be accrued under the TRIP or the SERP. In addition, effective January 1, 2009, the SERP was terminated with respect to active employees. The discussion below addresses operation of the TRIP and the SERP through December 31, 2008.

 

Under the TRIP and the SERP, 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 is 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 includes base salary and annual incentive award payments. The amount of compensation that could be taken into account in the TRIP is subject to limits imposed by the Internal Revenue Code ($230,000 in 2008), and the maximum annual benefits payable under the plan are also subject to Internal Revenue Code limits ($185,000 in 2008). The SERP took into account only base salary in excess of the Internal Revenue Code limit.

 

Participants in the TRIP generally vest in their plan benefits after they complete 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, participated in the TRIP and the SERP. Mr. Waaser has not participated in these plans because his employment commenced after the

date on which the TRIP was closed to new participants. The table below shows, as of December 31, 2008, the number of years of service credited under the TRIP and the SERP 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. In connection with the freeze of the SERP, the present value of each active participant’s account in the SERP at December 31, 2008 was contributed to our Deferred Compensation Plan, as described below under “Nonqualified Deferred Compensation – 2008.”

 

 

 

 

We maintain a Deferred Compensation Plan. In connection with the termination of the SERP, effective on January 1, 2009, we amended and restated the Deferred Compensation Plan. Except as noted below, the following discussion relates to the Deferred Compensation Plan as in effect in 2008.

 

Under the Deferred Compensation Plan, executives, including named executive officers, could defer up to 50% of their salary, 75% of their annual incentive award and 75% of their long-term cash incentive award. Salary deferral elections are made by eligible executives in December of each year in respect of salary amounts to be earned 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 amount 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, 2008. 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.