SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
TELEFLEX INCORPORATED
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price 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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] 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:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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[TELEFLEX INCORPORATED LOGO]
PLYMOUTH MEETING, PENNSYLVANIA 19462
--------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, APRIL 26, 2002
--------------------------------------------------------------------------------
March 25, 2002
TO THE STOCKHOLDERS OF TELEFLEX INCORPORATED:
The Annual Meeting of Stockholders of Teleflex Incorporated will be held on
Friday, April 26, 2002 at 10:00 a.m. at the JEFFERSON HOUSE RESTAURANT BALLROOM,
2519 DEKALB PIKE, NORRISTOWN, PENNSYLVANIA, for the following purposes:
1. To elect three directors of the Company to serve for a term of
three years and until their successors have been elected and qualified;
2. To ratify the appointment of PricewaterhouseCoopers LLP,
independent accountants, as the Company's auditors for the fiscal year
ending December 29, 2002; and
3. To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business, Friday, March 1, 2002,
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 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).
By Order of the Board of Directors,
STEVEN K. CHANCE, Secretary
PLEASE VOTE -- YOUR VOTE IS IMPORTANT
TABLE OF CONTENTS
Page
-----
PROXY STATEMENT............................................. 1
QUESTIONS AND ANSWERS....................................... 2
ELECTION OF DIRECTORS....................................... 3
NOMINEES FOR THE BOARD OF DIRECTORS......................... 3
ADDITIONAL INFORMATION ABOUT THE BOARD OF DIRECTORS......... 5
AUDIT COMMITTEE REPORT...................................... 6
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION..... 6
Compensation Committee Interlocks and Insider
Participation......................................... 8
FIVE-YEAR SHAREHOLDER RETURN COMPARISON..................... 9
EXECUTIVE COMPENSATION AND OTHER INFORMATION................ 9
Summary of Cash and Non-Cash Compensation Paid to
Certain Executive Officers............................ 9
Option Grants.......................................... 11
Option Exercises and Holdings.......................... 11
Pension Plans.......................................... 11
Employment Contracts and Termination, Severance and
Change-of-Control Arrangements......................... 12
Director Compensation.................................. 12
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT................................................ 12
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE..... 13
AUDIT FEES.................................................. 13
ALL OTHER FEES.............................................. 13
RATIFICATION OF APPOINTMENT OF AUDITORS..................... 14
OTHER MATTERS............................................... 14
PROXY STATEMENT
This proxy statement is furnished to stockholders by the Board of Directors
of the Company for solicitation of proxies for use at the Annual Meeting of
Stockholders on Friday, April 26, 2002. The proxies may also be voted at any
adjournment or postponement of the meeting. The expense of this solicitation
will be paid by the Company.
The Company's principal executive offices are located at 630 West
Germantown Pike, Suite 450, Plymouth Meeting, Pennsylvania 19462. This proxy
statement and the enclosed form of proxy were mailed to stockholders
approximately on March 25, 2002.
In addition to use of the mail, some directors, officers and regular
employees of the Company may solicit proxies personally by telephone, facsimile,
electronic mail, telegram or personal interview. The shares represented by each
proxy will be voted in accordance with the instructions in the proxy, unless the
proxy is revoked before the meeting. Any proxy may be revoked before it is
exercised by providing written notice to the Secretary of the Company or by
submitting a new proxy. If no voting instructions are given in the proxy, the
shares represented by the proxy will be voted for the election as directors of
the nominees listed on page 3 and for the ratification of the appointment of
PricewaterhouseCoopers LLP, independent accountants, as the Company's auditors
for the fiscal year ending December 29, 2002.
Only stockholders of record at the close of business on March 1, 2002 are
entitled to vote at the Annual Meeting or at adjournments or postponements of
the meeting. Each owner of record on the record date is entitled to one vote for
each share of common stock held. On March 1, 2002, the Company had outstanding
and entitled to vote 39,015,991 shares of common stock.
1
QUESTIONS AND ANSWERS
1. WHAT IS A "PROXY"?
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."
2. WHAT IS A "PROXY STATEMENT"?
It is a document required by the Securities and Exchange Commission which
explains to you why we are asking you to sign a proxy card.
3. WHAT IS A "QUORUM"?
A quorum is the minimum number of shareholders 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 ("abstentions") and broker non-votes are counted for purposes of
determining the presence of a quorum.
4. WHAT IS A "BROKER NON-VOTE"?
When brokers and banks which are holding shares on behalf of beneficial
owners do not receive voting instructions from the beneficial owners by the
tenth day before the Annual Meeting, such brokers and banks may vote those
shares only on matters deemed routine by the New York Stock Exchange, such as
the election of directors and ratification of the appointment of independent
accountants. On non-routine matters, such brokers and banks cannot vote, and
there is a so-called "broker non-vote" on that matter.
5. WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING?
Stockholders of record at the close of business on March 1, 2002 (the
"Record Date") are entitled to vote at the Annual Meeting. Each owner of record
on the Record Date is entitled to one vote for each share of common stock held.
6. WHAT IS THE "RECORD DATE"?
It is the date established by the Board of Directors, as required by law,
as the last date for eligibility to vote your shares at the upcoming Annual
Meeting. You must be a shareholder of record on that date to vote at the Annual
Meeting.
7. HOW MANY VOTES ARE REQUIRED TO ELECT DIRECTORS OR APPROVE ANY PROPOSALS?
A plurality of the votes cast at the meeting is required to elect
directors; that is, the three nominees receiving the highest number of votes
will be elected. The affirmative vote of a majority of outstanding shares
present, in person or by proxy, is necessary 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.
8. HOW DO I VOTE?
Please sign and date each proxy card which you receive and return it in the
prepaid envelope included with your proxy package. Any proxy card which is
returned without any markings indicating how you wish to vote will be counted as
a vote FOR the election of directors and ratification of PricewaterhouseCoopers
LLP as auditors for 2002. You may revoke your proxy at any time before the
meeting by (a) notifying Steven K. Chance, Secretary, (b) voting in person or by
telephone, or (c) returning a second, later-dated, proxy card.
2
ELECTION OF DIRECTORS
The Company's Bylaws provide that the Board of Directors shall be composed
of not fewer than six nor more than fifteen directors, as fixed by a majority of
the entire board from time to time. Effective as of the 2002 Annual Meeting, the
board has fixed at eight the number of directors which shall constitute the
entire board.
The Company's Bylaws also provide for the division of the Board of
Directors into three classes as equal in number as possible, with members of
each class having a term of office of three years. Accordingly, at the 2002
Annual Meeting of Stockholders, three directors will be elected for three-year
terms expiring at the Annual Meeting of Stockholders of the Company in 2005. The
board, on recommendation of the Nominating Committee, has nominated Messrs.
Black, Cook and Stratton for election for three-year terms.
It is intended that shares represented by properly executed proxies will be
voted for the election of Messrs. Black, Cook and Stratton for a term expiring
in 2005. If any nominee becomes unavailable to serve (which is not now
anticipated), the persons named in the proxy may vote it for another nominee
selected by the Board of Directors. All of the nominees and continuing directors
were elected by the stockholders of the Company.
NOMINEES FOR THE BOARD OF DIRECTORS
CLASS OF 2005
VOTING IS FOR THIS CLASS
Lennox K. Black, 71.................... Chairman and Chief Executive Officer of the Company;
Elected in 1971 (Chairman, 1982-present; Chief Executive Officer,
1971-1994; 2000-present); Director, The Pep Boys.
William R. Cook, 58.................... President and Chief Executive Officer, Severn Trent
Elected in 1998 Services, Inc., a water and waste utility company;
Chairman, President, Chief Executive Officer and Chief
Operating Officer, BetzDearborn, Inc. (1993-98);
Director, Quaker Chemical Company and Envirogen.
James W. Stratton, 65.................. Chairman and Chief Executive Officer, Stratton Management
Elected in 1993 Company, an investment advisory and management firm;
Chairman and Director of EFI Corporation, a financial
services company; Chairman and Director of Stratton
Monthly Dividend Shares, Stratton Small Cap Value Fund
and Stratton Growth Fund, registered investment
companies; Director, UGI Corporation and Amerigas
Propane.
3
THE FOLLOWING INDIVIDUALS CURRENTLY SERVE AS DIRECTORS IN THE TWO OTHER
CLASSES. THEIR TERMS WILL END AT THE ANNUAL MEETINGS IN 2003 AND 2004,
RESPECTIVELY.
CLASS OF 2003
Sigismundus W.W. Lubsen, 58............ Member of the Executive Board, Heineken N.V., Amsterdam,
Elected in 1992 The Netherlands, a manufacturer of beverage products;
Supervisory Director, Honeywell Holding B.V. (the
Netherlands).
Palmer E. Retzlaff, 70................. President and Director, Southwest Grain Inc., McAllen,
Elected in 1978 Texas, engaged primarily in cotton and grain export;
Director, Harleysville National Corporation and Paris
Corporation.
CLASS OF 2004
Patricia C. Barron, 59................. Clinical Associate Professor, Stern School of Business,
Elected in 1998 New York University, New York, New York; Vice President,
Business Operations, Xerox Corporation (1998); President,
Xerox Engineering Systems Division (1994-98); Director,
ARAMARK Corporation, Quaker Chemical Corporation,
Ultralife Batteries Corporation and USAA.
Donald Beckman, 70..................... Of Counsel, Beckman and Associates, Philadelphia, PA,
Elected in 1981 attorneys; Special Counsel, Saul Ewing LLP, Philadelphia,
PA, attorneys (1993-2001).
Joseph S. Gonnella, M.D., 67........... Distinguished Professor of Medicine and Director, The
Elected in 1995 Center for Research in Medical Education and Health Care,
Jefferson Medical College, Thomas Jefferson University;
Dean Emeritus, Jefferson Medical College; Director,
excelleRx, Inc.
4
ADDITIONAL INFORMATION ABOUT THE BOARD OF DIRECTORS
The Board of Directors of the Company met seven times in 2001. Each of the
nominees and continuing directors attended at least seventy-five percent of the
combined total of board meetings and meetings held in 2001 by committees on
which he or she served.
As provided in the Company's Bylaws, the Board of Directors has established
an Audit Committee, Compensation Committee, Nominating Committee and Executive
Committee, as follows:
- The Audit Committee, currently composed of Messrs. Cook and Stratton and
Dr. Gonnella, held five meetings in 2001. The Board of Directors has
adopted a written charter for the Audit Committee (the "Charter").
Pursuant to the Charter, the Audit Committee reviews with the Company's
financial officers and independent accountants the financial statements
of the Company and related matters preliminary to the consideration of
the financial statements by the full Board of Directors. The members of
the Audit Committee are independent (as independence is defined in
Sections 303.01(B)(2)(a) and (3) of the New York Stock Exchange's listing
standards).
- The Compensation Committee currently consists of four members: Mrs.
Barron and Messrs. Beckman, Lubsen, and Stratton. The Compensation
Committee held four meetings in 2001. The Compensation Committee makes
recommendations to the Company's Board of Directors regarding the
Company's compensation policies, compensation plans and specific
compensation arrangements for management executives and directors. The
Committee is also authorized to grant options and restricted stock awards
under the Company's Stock Compensation Plans. Only a subcommittee of the
Compensation Committee, however, comprised solely of directors who
qualify as "Non-Employee Directors" under SEC Rule 16b-3, is authorized
to approve compensation arrangements for senior officers and directors,
including the grant of stock options and restricted stock. In 2001, the
subcommittee was comprised of Mrs. Barron and Mr. Lubsen.
- The Nominating Committee, currently composed of Mrs. Barron and Messrs.
Lubsen and Stratton, held one meeting in 2001. The Nominating Committee
considers and makes recommendations to the board regarding nominees for
election to the board. The Committee will consider stockholders'
suggestions for candidates if mailed to: Secretary, Teleflex
Incorporated, 630 West Germantown Pike, Suite 450, Plymouth Meeting, PA
19462 by January 3, 2003.
- The Executive Committee is currently composed of Messrs. Black, Beckman
and Retzlaff. Subject to certain exceptions, the Executive Committee may
exercise the powers of the Board of Directors in the management of the
business and affairs of the Company when the board is not in session.
5
AUDIT COMMITTEE REPORT
In carrying out its responsibilities with respect to the Company's
financial reporting for the year ended December 30, 2001, the Audit Committee
has:
- reviewed and discussed the audited financial statements for the fiscal
year ended December 30, 2001 with management;
- discussed with the independent accountant the matters required to be
discussed by SAS 61 (Codification of Statements on Accounting Standards,
AU Sec. 380);
- received the written disclosures and the letter from the independent
accountant required by Independence Standards Board Standard No. 1
(Independence Standards Board Standard No. 1, Independence Discussions
with Audit Committees) and discussed with the independent accountant its
independence; and
- based on the review and discussions referred to above, recommended to the
Board of Directors that the audited financial statements be included in
the Company's Annual Report for the year ended December 30, 2001 on Form
10-K for filing with the Securities and Exchange Commission.
WILLIAM R. COOK, CHAIRMAN JOSEPH S. GONNELLA, M.D. JAMES W. STRATTON
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's compensation policy with respect to its senior management is
to offer competitive compensation opportunities based on individual and
corporate performance. Compensation of senior managers is fixed by the Board of
Directors upon the recommendations of the Compensation Committee, which are
developed in consultation with the Chief Executive Officer. The compensation
package for senior management is composed of three parts, Salaries, Bonuses and
Long-term Incentive Compensation, as follows:
6
- Salaries are set in amounts comparable to base salaries of executives
with similar responsibilities in comparable companies engaged in similar
businesses. Comparative data is drawn from independent surveys of
executive compensation of manufacturing companies on average comparable
in size to the Company. There is no material correlation between the
companies included in the surveys and the companies included in the
indices shown in the graph of Market Performance at page 9. Generally,
the Company fixes salaries at approximately the midpoint of the average
compensation for positions of comparable responsibility reported by the
surveyed companies. While individual performance of each executive has
some effect on his or her salary determination, in the case of executive
officers, it is of relatively modest consequence. Nor is corporate
financial performance a material factor in setting executive salaries.
The Company regards salaries as a base for compensation and relies on
the annual bonus and long-term incentive compensation to reward fairly
and to provide an incentive for excellence of service and loyalty.
- Bonuses are awarded shortly after the close of each year to selected
managerial personnel based upon the Company's financial performance and
the executive's individual performance and contributions in that year.
In the case of bonus participants below the level of executive officer,
allocations are made on predetermined formulae, which vary among the
Company's divisions, designed to reflect primarily the contribution to
the Company's profits for that year by the division or other unit of
which the participant is a member. The primary factor considered is the
relative profitability of the division or unit of the Company's
operations for which the manager is responsible. This factor generally
accounts for approximately 60% of the award. Another approximately 20%
of the award is based on other measures of improvements in the
operations of the division or unit (such as return on average assets or
improvement of working capital as a percentage of sales). The remaining
approximately 20% of the award is based on the executive's individual
achievement of specific objectives or goals. Such goals are set early in
each year in consultation with the senior officer to whom the executive
reports and generally relate to specific profitability, sales, product
quality or productivity standards which are objectively measurable.
Bonus awards to executive officers, however, are based on a subjective
evaluation and determination by the Compensation Committee in
consultation with the Chief Executive Officer. A principal consideration
is the relative profitability in the preceding year of the Company and
any division or other unit for which an executive officer has
responsibility, but factors other than corporate financial performance
may be given equal or even greater weight in individual cases. These
factors include consideration of the accomplishment of operational
missions, such as expansion of product lines or market shares or
geographical or industry penetration, new product development,
improvements in efficiency of operations, accomplishment of
strategically significant corporate acquisitions and other matters. Many
of these corporate missions or objectives are identified in the
preceding year, but others develop during the course of time, responding
to often unanticipated outside influences which affect the Company's
business. Accordingly, the Committee does not measure performance
against preset goals in the case of bonus awards to executive officers.
No executive is assured of any minimum bonus, and the Company's present
policy is that an executive's bonus may not exceed 50% of his or her
salary except in the case of senior officers (whose bonus limitation is
80% of salary) and the chief executive officer (whose bonus limitation
is 90% of salary).
7
- Long-term incentive compensation consists of awards of stock options and
restricted stock under the Company's Stock Compensation Plans. Awards
have been granted to recognize and reward exceptional individual
performance or to directly link a portion of an executive's compensation
to shareholder returns over a future period of continued service.
Typically, awards have not been based on any preset formulae or
entitlement standard but have reflected the Compensation Committee's
subjective perception of specific executives' individual contributions
to the Company's successful performance in the preceding year or the
Committee's determination that specific executives who undertake new or
special responsibilities should receive a portion of their compensation
over a period of time dependent on the increase in value of the
Company's shares. The Compensation Committee, however, has granted
restricted stock awards to a limited number of senior executives
pursuant to a plan adopted at the beginning of a multi-year period,
which entitled the executives to awards of specified numbers of shares,
contingent upon the Company's achievement of specified goals for
increased revenue, operating margins, return on equity and earnings per
share during such period.
Lennox K. Black, Chairman and Chief Executive Officer of the Company,
received a salary of $1,054,100 for 2001. A portion of Mr. Black's salary is
deferred for payment in a future year or years. Principal factors considered by
the Compensation Committee in fixing Mr. Black's compensation for 2001 included
his performance of the duties of the Chief Executive Officer during the year, in
addition to his responsibilities as Chairman of the Company, the successful
implementation of the Company's management transition and succession plans, and
the financial performance of the Company.
Section 162(m) of the Internal Revenue Code limits to $1 million the
deductibility of compensation received in a year by each of the Company's five
most highly compensated executive officers, exclusive of compensation which
qualifies as "performance-based" or falls within other exceptions provided in
the statute. Awards under the Company's Stock Compensation Plan may be made on
terms which will qualify for exception from the deductibility limit. The
Committee, however, retains discretion to make awards which are not fully
deductible. Compensation paid in 2001 did not exceed the deductible limit.
SIGISMUNDUS W.W. LUBSEN, CHAIRMAN
PATRICIA C. BARRON DONALD BECKMAN JAMES W. STRATTON
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2001, Mr. Beckman was Special Counsel to the law firm of Saul Ewing
LLP, which provided legal services to the Company.
Mr. Stratton is an executive officer of Stratton Management Company, which
provided investment advisory services to the retirement funds of the Company in
2001.
8
FIVE-YEAR SHAREHOLDER RETURN COMPARISON
The SEC requires that the Company include in this proxy statement a
line-graph presentation comparing cumulative, five-year shareholder returns
(assuming reinvestment of dividends) on an indexed basis with the S&P 500 Stock
Index and either a nationally recognized industry standard or an index of peer
companies selected by the Company. The Company has approved the use of the S&P
MidCap 400 Index for purposes of this performance comparison because it includes
companies of similar size and industry group.
MARKET PERFORMANCE
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN(a)
[LINE GRAPH]
TELEFLEX INCORPORATED 100 146.64 179.31 124.64 178.87 194.29
S&P 500 INDEX 100 133.36 171.48 207.56 188.66 166.24
S&P MIDCAP 400 INDEX 100 132.25 157.52 180.71 212.35 196.42
(a) Assumes $100 invested on December 31, 1996 in Teleflex common stock, S&P
MidCap 400 Index, and S&P 500 Index using a fiscal year ending December 31
in all cases.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND NON-CASH COMPENSATION PAID TO CERTAIN EXECUTIVE OFFICERS
The following table sets forth, for the fiscal years ended December 26,
1999, December 31, 2000, and December 30, 2001, respectively, certain
compensation information with respect to the Company's: (a) Chief Executive
Officer and (b) each of the four other most highly compensated executive
officers, based on the salaries and bonuses earned by such executive officers
during fiscal year 2001.
9
SUMMARY COMPENSATION TABLE
Long-Term
Compensation Awards
Annual Compensation -----------------------
------------------------ Restricted All Other
Name and Principal Position Year Salary Bonus Stock(a) Options Compensation(b)
--------------------------- ---- ---------- -------- ---------- ------- ---------------
Lennox K. Black 2001 $1,054,100 -- -- -- $ 75,296
Chairman, Chief 2000 $ 976,000 -- -- -- $ 1,070,539(c)
Executive Officer 1999 $ 650,000 -- -- -- $ 70,312
and Director
Jeffrey P. Black 2001 $ 421,500 -- -- 20,000 $ 6,000
President 2000 $ 230,000 $140,000 -- 20,000 $ 3,102
1999 $ 180,700 $ 75,000 -- 8,750 $ 2,749
Roy C. Carriker 2001 $ 365,000 -- $129,330 -- $ 12,165
Vice Chairman 2000 $ 346,600 $160,000 $557,835 -- $ 4,068
1999 $ 340,000 $ 50,000 $376,594 -- $ 3,895
Harold L. Zuber, Jr. 2001 $ 351,000 -- -- 17,000 $ 6,975
Executive Vice 2000 $ 330,000 $200,000 $517,320 15,000 $ 4,742
President and Chief 1999 $ 300,000 $170,000 -- 26,000 $ 3,853
Financial Officer
John J. Sickler 2001 $ 350,000 -- -- 17,000 $ 4,380
Vice Chairman 2000 $ 325,000 $200,000 $517,320 10,000 $ 1,940
1999 $ 315,350 $125,000 -- 21,750 $ 5,455
------------
(a) Under the Company's 1990 Stock Compensation Plan, Dr. Carriker was granted
9,750 restricted shares on March 8, 1999, 3,000 on March 6, 2000, and 3,000
on March 5, 2001. These restricted shares vest 33 1/3% on the first
anniversary of each grant (i.e., March 8, 2000, March 6, 2001 and March 5,
2002), and an additional 33 1/3% on each of the next two anniversaries,
conditioned on continued employment with the Company. Dividends are payable
on all restricted shares awarded to the same extent paid on the Company's
common stock generally. Restricted share awards under the Company's 2000
Stock Compensation Plan were granted on March 5, 2001 to the named
executives pursuant to a plan adopted in 1998 at the beginning of a three
year period which entitled the named executives to awards of a specified
number of shares after the end of the three year period 1998 through 2000,
contingent upon the Company's achievement of specified goals for increased
revenue, operating margins, return on equity and earnings per share during
such period as follows: Dr. Carriker, 11,000; Mr. Zuber, 12,000; Mr.
Sickler, 12,000. The restricted shares awarded vest one year from the date
of grant conditioned on continued employment with the Company. Dividends are
payable on all restricted shares awarded to the same extent paid on the
Company's common stock generally. As at the end of fiscal year 2001, the
number and value of all restricted shares held by the Company for each of
the named executives was: Dr. Carriker, 19,250 shares valued at $918,225;
Mr. Zuber, 12,000 shares valued at $572,400; Mr. Sickler, 12,000 shares
valued at $572,400.
(b) The information reported includes the following for fiscal year 2001: (i)
the dollar value of life insurance premiums paid for the benefit of each of
the named executives as follows: Mr. L.K. Black, $75,296; Mr. J.P. Black,
$750; Dr. Carriker, $6,915; Mr. Zuber, $1,725; Mr. Sickler, $4,380; (ii)
contributions to the Company's Voluntary Investment Plan on behalf of the
named executives to match 2001 pre-tax elective deferral contributions under
sec.401(k) of the Internal Revenue Code made to such plan as follows: Mr.
J.P. Black, $5,250; Dr. Carriker, $5,250; Mr. Zuber, $5,250.
(c) A supplemental payment of $1,000,000 was awarded to Mr. L.K. Black for
services in 2000 as Chief Executive Officer. This additional compensation
has been deferred.
10
OPTION GRANTS
The following table sets forth information with respect to the named
executives concerning the grants of stock options during the last fiscal year
ending December 30, 2001:
OPTION GRANTS IN LAST FISCAL YEAR
Potential
Individual Grants Realizable Value at
----------------------------------------------------------- Assumed Annual
% of Total Rates of Stock Price
Securities Options Appreciation for
Underlying Granted to Exercise or Option Term
Options Employees Base Price Expiration ------------------------
Name Granted(a) in FY ($/sh) Date 5% 10%
---- ---------- ---------- ----------- ---------- -------- ----------
Lennox K. Black -- -- -- -- -- --
Jeffrey P. Black 20,000 3.96% $43.25 3/5/11 $543,994 $1,378,587
Roy C. Carriker -- -- -- -- -- --
Harold L. Zuber, Jr. 17,000 3.36% $43.25 3/5/11 $462,395 $1,171,799
John J. Sickler 17,000 3.36% $43.25 3/5/11 $462,395 $1,171,799
------------
(a) These options become exercisable for one-third of the shares on the first
anniversary of the grant (March 5, 2002) and for an additional one-third of
the shares on each of the next two anniversaries, so long as employment with
the Company continues.
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the named
executives concerning the exercise of stock options during the last fiscal year
ending December 30, 2001 and unexercised options held as of the end of the
fiscal year:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES TABLE
Value of Unexercised
Number of Unexercised In-the-Money Options
Options at FY-End at FY-End(a)
Shares Acquired Value --------------------------- ---------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- --------------- -------- ----------- ------------- ----------- -------------
Lennox K. Black -- -- -- -- -- --
Jeffrey P. Black -- -- 19,100 42,650 $ 343,646 $400,684
Roy C. Carriker 12,000 $351,000 -- -- -- --
Harold L. Zuber, Jr. -- -- 73,400 44,600 $1,805,604 $462,476
John J. Sickler -- -- 70,700 38,050 $1,768,592 $359,308
------------
(a) Market value of underlying securities at year-end, minus the exercise price.
PENSION PLANS
Under the Company's Retirement Income Plan, a qualified Defined Benefit
Pension Plan, as well as a non-qualified supplemental pension plan that provides
benefits that would otherwise be denied participants by reason of certain
Internal Revenue Code limitations on qualified plan compensation and benefits, a
participant accumulates units of annual pension benefit for each year of
service. For each of the first thirty-five years of service, a participant's
unit is equal to 1.375% of his or her annual plan compensation up to the social
security integration level, plus 2.0% of such compensation in excess of the
social security integration level. For each year of service in excess of
thirty-five, a participant's unit is equal to 1.833% of his or her annual plan
compensation. A participant's total pension is based on his or her annual plan
compensation, which for each year of plan participation for the named executives
is his or her base salary (as reported in the Summary Compensation Table). The
estimated annual benefits payable as a life annuity with five years certain
(assuming no future increase in base salary) upon retirement at normal
retirement age 65 (or actual age, if greater) for each of the named executives
is: Mr. L.K. Black, $189,545; Mr. J.P. Black, $78,871; Dr. Carriker, $88,446;
Mr. Zuber, $141,493; and Mr. Sickler, $117,446.
11
EMPLOYMENT CONTRACTS AND TERMINATION, SEVERANCE AND CHANGE-OF-CONTROL
ARRANGEMENTS
The Company's employment agreement with Lennox K. Black provides that Mr.
Black may continue to serve the Company on a full-time basis or, at his
election, as a consultant on a reduced-time basis until December 31, 2005.
During the period of his full-time service, his salary will not be less than
$574,000, and while serving as a consultant, his annual compensation will be at
least 75% of his last full-time service salary but not less than $300,000,
subject to adjustment for inflation. Mr. Black's agreement also provides for
death and disability benefits, compensation continuation for up to two years in
case of termination of employment under certain circumstances, and payment of
deferred compensation for fifteen years, commencing in 1995, at the rate of
$100,000 per year. The Company has purchased insurance on Mr. Black's life which
will provide the Company with funds at least equal to the amount of such
deferred compensation paid. In the event of termination of Mr. Black's
employment, other life insurance which the Company is providing to him as an
employment benefit will be continued for his lifetime.
DIRECTOR COMPENSATION
Directors of the Company who are also employees of the Company or any of
its subsidiaries receive no additional compensation for their services as
directors. Directors of the Company who are not employees of the Company or any
of its subsidiaries ("outside directors") are paid an annual fee at the rate of
$20,000 per year and a $1,000 fee for each board or committee meeting attended,
plus expenses. In addition, outside directors, on their first election or
appointment to the board, receive a 5,000 share stock option under the Company's
Stock Compensation Plan, and each outside director in office receives each year
a 2,000 share stock option grant under the Plan. The Company provides no pension
benefits to the outside directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of February 1, 2002, certain information
with respect to ownership of the Company's securities: (i) the name and address
of each person known to the Company to beneficially own more than 5% of the
Company's outstanding common stock, (ii) the name of each director or nominee
for director, (iii) certain named executive officers and (iv) all directors and
executive officers as a group. Except as otherwise indicated in the footnotes to
the chart which follows, the Company is informed that each person named has sole
voting power and sole investment power over the shares of Company common stock
shown opposite his or her name.
Shares Percent
Beneficially of Outstanding
Name Owned(a) Common Stock
---- ------------ --------------
Lennox K. Black, 630 West Germantown Pike, Suite 461,
Plymouth Meeting, PA 19462................................ 3,838,931(b) 9.90
Jeffrey P. Black............................................ 74,274 *
Donald Beckman, Two Penn Center Plaza
Philadelphia, PA 19102.................................... 3,065,211(c) 7.80
Patricia C. Barron.......................................... 13,800 *
Roy C. Carriker, Ph.D. ..................................... 54,694(d) *
William R. Cook............................................. 14,000 *
Joseph S. Gonnella, M.D. ................................... 10,422(e) *
Sigismundus W. W. Lubsen.................................... 9,459 *
Palmer E. Retzlaff.......................................... 27,468 *
John J. Sickler............................................. 179,418 *
James W. Stratton........................................... 21,584(f) *
Harold L. Zuber, Jr. ....................................... 159,715 *
All officers and directors as a group (19 persons).......... 4,572,886 11.64
------------
*Represents holdings of less than 1%.
12
(a) Includes (i) shares subject to presently exercisable stock options as
follows: Mr. Jeffrey P. Black-19,100, Mr. Beckman-8,000, Mrs. Barron-13,000,
Mr. Cook-11,000, Dr. Gonnella-8,000, Mr. Lubsen-8,000, Mr. Retzlaff-8,000,
Mr. Sickler-70,700, Mr. Stratton-8,000, Mr. Zuber-73,400 and all officers
and directors as a group-321,100 (for purposes of calculating the
percentages of beneficial ownership for officers and directors disclosed in
the foregoing table, these shares were deemed to be outstanding) and (ii)
shares held by the Trustee under the Company's Voluntary Investment Plan
with respect to which the employee has authority to direct voting as
follows: Mr. Jeffrey P. Black-5,870, Dr. Carriker-2,916, Mr. Zuber-6,202,
and all officers and directors as a group-24,510.
(b) Includes the following shares of which Mr. Black is deemed to be a
"beneficial owner" under the applicable rules of the Securities and Exchange
Commission: (i) 1,442,790 shares owned by Woelm Holding Company Limited,
1,442,790 shares owned by Margrit Nekouian Holding Company Limited and
283,640 shares owned by two individuals, for which Mr. Black holds revocable
powers of attorney to vote such shares; (ii) 52,800 shares owned by a trust
of which Mr. Black is a trustee, and (iii) 103,719 shares held by a
decedent's estate of which Mr. Black is an executor.
(c) Includes the following shares of which Mr. Beckman is deemed to be a
"beneficial owner" under the applicable rules of the Securities and Exchange
Commission: (i) 1,442,790 shares held by Woelm Holding Company Limited of
which Mr. Beckman is a director, (ii) 1,442,790 shares owned by Margrit
Nekouian Holding Company Limited of which Mr. Beckman is a director [Mr.
Black holds a revocable power of attorney to vote these shares, and these
shares are also referred to in clause (i) of footnote (b)], (iii) 52,800
shares owned by a trust of which Mr. Beckman is a trustee [Mr. Black is also
a trustee of this trust, and these shares are also referred to in clause
(ii) of footnote (b)] and (iv) 103,719 shares held by a decedent's estate of
which Mr. Beckman is an executor [Mr. Black is also an executor of this
estate, and these shares are also referred to in clause (iii) of footnote
(b)].
(d) Includes 19,044 shares owned of record and beneficially by Dr. Carriker's
wife of which Dr. Carriker is deemed to be a "beneficial owner" under
applicable rules of the Securities and Exchange Commission.
(e) Includes 700 shares owned of record and beneficially by Dr. Gonnella's son
of which Dr. Gonnella is deemed to be a "beneficial owner" under applicable
rules of the Securities and Exchange Commission.
(f) Includes 7,400 shares in customer accounts managed by and owned of record by
Stratton Management Company of which Mr. Stratton is deemed to be a
"beneficial owner" under applicable rules of the Securities and Exchange
Commission.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers to file reports of ownership and changes in
ownership of Company stock. To the best of the Company's knowledge, all required
forms were filed on time except for the late reporting by Mr. Ronald D. Boldt of
the exercise of an option pursuant to which Mr. Boldt acquired 2,000 shares of
the Company's stock and, due to a typographical error, the late reporting by Ms.
Janine Dusossoit of the grant of an option to purchase 1,360 shares of the
Company's stock. The acquisition of this option is exempt from Section 16(b).
AUDIT FEES
The aggregate fees billed to the Company by PricewaterhouseCoopers LLP for
the performance of the audit and the review of the Company's financial
statements during 2001 were $897,000.
ALL OTHER FEES
The aggregate fees billed to the Company by PricewaterhouseCoopers LLP for
all non-audit services, including fees for acquisition and tax-related services,
during 2001 were $1,032,000. Such non-audit services did not include any
financial information systems design or implementation services. The Audit
Committee considered whether the provision of non-audit services by
PricewaterhouseCoopers LLP is compatible with maintaining PricewaterhouseCoopers
LLP's independence with respect to the Company.
13
RATIFICATION OF APPOINTMENT OF AUDITORS
The selection of auditors by the Board of Directors will be presented to
the stockholders for ratification or rejection at the Annual Meeting. The Audit
Committee has recommended and the board has, subject to stockholder
ratification, appointed PricewaterhouseCoopers LLP to examine and report on the
financial statements of the Company for its fiscal year ending December 29,
2002. PricewaterhouseCoopers LLP (the "Firm") has audited the Company's books
for more than 30 years and has served as its independent accountant for 2001.
The Firm has offices in or near most of the places in the United States and
foreign countries where the Company operates.
Before making its recommendation for appointment to the entire board, the
Audit Committee carefully considered the qualifications for auditors of the
Company. In the case of PricewaterhouseCoopers LLP, this consideration included
a review of its performance in prior years, as well as its reputation for
integrity and for competence in the fields of accounting and auditing. The Audit
Committee has expressed its satisfaction with the Firm in all respects.
A representative of the Firm is expected to be present at the Annual
Meeting and will be available to respond to appropriate questions. The
representative will also have the opportunity to make a statement if he or she
desires to do so.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSAL TO RATIFY ITS SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE AUDITORS
OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 29, 2002.
OTHER MATTERS
The Board of Directors does not know of any other matters which may be
presented at the Annual Meeting, but if other matters do properly come before
the meeting, it is intended that the persons named in the proxy will vote
according to their best judgment.
Stockholders are requested to date, sign and return the enclosed proxy in
the enclosed envelope, for which 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). If you attend the Annual Meeting, you may revoke your
proxy at that time and vote in person if you so desire. Otherwise, your proxy
will be voted for you.
Any proposals submitted by stockholders for inclusion in the Company's
proxy statement and proxy for the 2003 Annual Meeting of Stockholders of the
Company must be received by the Company at its principal executive offices no
later than November 25, 2002 and must comply in all other respects with
applicable rules and regulations of the Securities and Exchange Commission
relating to such inclusion.
In connection with any proposal submitted by stockholders for consideration
at the 2003 Annual Meeting of Stockholders, but not proposed for inclusion in
the Company's proxy statement and proxy for the 2003 Annual Meeting of
Stockholders, the Company may exercise discretionary voting authority with
respect to proxies solicited for that meeting if appropriate notice of the
stockholder's proposal is not received by the Company at its principal executive
offices by February 7, 2003.
By Order of the Board of Directors,
STEVEN K. CHANCE, Secretary
14
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
TELEFLEX INCORPORATED
The undersigned hereby appoints Donald Beckman and Palmer E. Retzlaff
proxies, each with power to act without the other and with power of
substitution, and hereby authorizes them to represent and vote, as designated on
the other side, all the shares of stock of Teleflex Incorporated standing in the
name of the undersigned with all powers which the undersigned would possess if
present at the Annual Meeting of Stockholders of the Company to be held April
26, 2002 or any adjournment thereof.
(CONTINUED ON THE OTHER SIDE)
ANNUAL MEETING OF STOCKHOLDERS OF
TELEFLEX INCORPORATED
April 26, 2002
Co. # Acct. #
PROXY VOTING INSTRUCTIONS
TO VOTE BY MAIL
PLEASE DATE, SIGN AND MAIL YOUR PROXY CARD IN THE ENVELOPE PROVIDED AS SOON AS
POSSIBLE.
TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
PLEASE CALL TOLL-FREE 1-800-PROXIES AND FOLLOW THE INSTRUCTIONS. HAVE YOUR
CONTROL NUMBER AND THE PROXY CARD AVAILABLE WHEN YOU CALL.
YOUR CONTROL NUMBER IS
- Please Detach and Mail in the Envelope Provided -
[X] PLEASE MARK YOUR
VOTES AS IN
THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ALL NOMINEES" IN ITEM 1 AND "FOR"
ITEM 2.
FOR WITHHELD
all FOR all
Nominees Nominees
Item 1.
Election of Directors: [ ] [ ]
NOMINEES:
Lennox K. Black
William R. Cook
James W. Stratton
Withheld for the following only (write the name of the nominee(s) in the space
below):
FOR AGAINST ABSTAIN
Item 2: Ratification of the appointment of
PricewaterhouseCoopers LLP as independent public [ ] [ ] [ ]
accountants for the Company for the year 2002.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
STOCKHOLDER. IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS RETURNED,
SUCH SHARES WILL BE VOTED "FOR ALL NOMINEES" IN ITEM 1 AND "FOR" ITEM 2.
PLEASE MARK, DATE AND SIGN AS YOUR NAME APPEARS AT LEFT AND RETURN IN THE
ENCLOSED ENVELOPE.
I PLAN TO [ ]
ATTEND MEETING
SIGNATURE_____________________________________________ DATE__________________
SIGNATURE_____________________________________________ DATE__________________
IF HELD JOINTLY
NOTE: Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.