<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
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 Section 240.14a-11(c) or
Section 240.14a-12
TELEFLEX INCORPORATED
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(Name of Registrant as Specified In Its Charter)
TELEFLEX INCORPORATED (HERBERT K. ZEARFOSS)
---------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] 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:
--------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------
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):
--------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------
5) Total fee paid:
--------------------------------------------------------------
[ ] 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:
----------------------------------------------
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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<PAGE>
[ID: LOGO]
TELEFLEX INCORPORATED
PLYMOUTH MEETING, PENNSYLVANIA 19462
------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, APRIL 28, 1995
------------------------------------------------------------------------------
TO THE STOCKHOLDERS OF TELEFLEX INCORPORATED:
The Annual Meeting of Stockholders of Teleflex Incorporated will be held
on Friday, April 28, 1995, at 11:00 a.m. at the VALLEY FORGE HILTON HOTEL, 251
DEKALB PIKE, ROUTE 202, KING OF PRUSSIA, PENNSYLVANIA, for the following
purposes:
1. To elect four directors of the Company to serve for a term
of three years and until their successors have been elected and
qualified;
2. To consider and act upon a proposal to approve the 1990
Stock Compensation Plan as proposed to be amended and administered
to (i) increase by 1,000,000 the maximum aggregate number of shares
issuable pursuant to the Plan and (ii) make awards thereunder
eligible for exemption from the limitations of the Internal Revenue
Code on deductibility of certain expenses for executive
compensation.
3. To consider and act upon a proposal to ratify the
appointment of Price Waterhouse LLP, independent accountants, as the
Company's auditors for the fiscal year ending December 31, 1995; and
4. To transact such other business as may properly come before
the meeting or any adjournments thereof.
The Board of Directors has fixed the close of business, Friday,
March 10, 1995, as the record date for the determination of stockholders
entitled to receive notice of and to vote at the Annual Meeting. The
transfer books of the Company will not be closed.
STOCKHOLDERS ARE REQUESTED TO DATE, SIGN AND RETURN THE ENCLOSED
PROXY IN THE ENCLOSED ENVELOPE, TO WHICH NO POSTAGE NEED BE AFFIXED IF
MAILED IN THE UNITED STATES OR CANADA.
By Order of the Board of Directors,
STEVEN K. CHANCE, Secretary
March 24, 1995
Plymouth Meeting, Pennsylvania
<PAGE>
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 28, 1995, and at all
adjournments thereof. The expense of this solicitation will be paid by
the Company. In addition to use of the mail, some directors, officers
and regular employees of the Company may solicit proxies personally, by
telephone and telegraph. Any proxy given pursuant to this solicitation
may be revoked by the person giving it any time before it is exercised
by providing written notice to the Secretary of the Company of such
intent or by submitting a new proxy. The shares represented by the
proxy will be voted in accordance with the instructions specified therein.
If no instructions are given in the proxy, the shares represented by
the proxy will be voted for the election as directors of the nominees
listed below and for proposals 2 and 3 described below at pages 10 and
13 respectively.
The Company's principal executive offices are located at 630 West
Germantown Pike, Suite 450, Plymouth Meeting, Pennsylvania 19462. This
proxy statement and the form of proxy enclosed herewith were mailed to
stockholders on approximately March 24, 1995.
RECORD DATE AND VOTING PROCEDURE
Only stockholders of record at the close of business on March 10,
1995, are entitled to vote at the Annual Meeting. At that date, the
Company had outstanding and entitled to vote 17,329,177 shares of common
stock. The record holders of such shares are entitled to one vote per
share. A majority of such outstanding shares present, in person or by
proxy, will constitute a quorum at the 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. A
plurality of the votes cast at the meeting is required to elect
directors, i.e., the four nominees receiving the highest number of votes
will be elected. The affirmative vote of a majority of such
outstanding shares present, in person or by proxy, is necessary to
approve all other proposals. 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.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of February 1, 1995, certain
information with respect to ownership of the Company's securities of (i)
each person known to the Company to beneficially own more than 5% of the
Company's outstanding common stock, (ii) 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 name.
<TABLE>
<CAPTION>
Shares Percent
Beneficially of Outstanding
Name (& Address of 5% Shareholders) Owned(a) Common Stock
----------------------------------- ------------ --------------
<S> <C> <C>
Lennox K. Black, 630 West Germantown Pike,
Suite 450, Plymouth Meeting, PA 19462 2,373,212(b) 13.44
Woelm Holding Company Limited, Cedar House,
41 Cedar Street, Hamilton, Bermuda 1,442,790(c) 8.17
Donald Beckman, 3800 Centre Square West,
Philadelphia, PA 19102 1,533,954(d) 8.68
David S. Boyer 101,835(e) *
Roy C. Carriker, Ph.D. 146,070 *
Joseph S. Gonnella, M.D. 200 *
Lewis E. Hatch, Jr. 19,504 *
Pemberton Hutchinson 4,500 *
Sigismundus W. W. Lubsen 721 *
John H. Remer 15,429 *
Palmer E. Retzlaff 9,646 *
John J. Sickler 96,311 *
</TABLE>
1
<TABLE>
<CAPTION>
Shares Percent
Beneficially of Outstanding
Name (& Address of 5% Shareholders) Owned(a) Common Stock
----------------------------------- ------------ --------------
<S> <C> <C>
James W. Stratton 87,331(f) *
Richard A. Woodfield 15,841 *
All officers and directors as a group
(20 persons) 3,023,492(g) 17.11
</TABLE>
------------
*Represents holdings of less than 1%.
(a) Includes (i) shares subject to presently exercisable stock options
as follows: Mr. Black -- 127,500, Mr. Beckman -- 3,000, Mr. Boyer --
63,000, Dr. Carriker -- 52,500, Mr. Hutchinson -- 3,000, Mr. Retzlaff
-- 3,000, Mr. Sickler -- 52,500, Mr. Woodfield -- 15,000 and all
officers and directors as a group -- 398,825 (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. Boyer --
5,381, Dr. Carriker -- 977, Mr. Hatch -- 657, Mr. Woodfield -- 91 and
all officers and directors as a group -- 14,330.
(b) Includes the following additional 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 of
record and beneficially by Woelm Holding Company Limited, and
181,820 shares owned of record and beneficially by three persons,
for which Mr. Black holds revocable powers of attorney to vote such
shares, and (ii) 83,214 shares held by trusts of which Mr. Black is
co-trustee and with respect to which he shares voting and investment
power.
(c) All the voting shares, except for directors' qualifying shares, of
Woelm Holding Company Limited are owned beneficially and of record
50% by a trust for the benefit of Alice Thormaehlen and 50% by
Margrit Nekouian-Fathi individually. The trustees of Mrs.
Thormaehlen's trust are Mrs. Thormaehlen, Lennox K. Black, Donald
Beckman and Ernst-Helmut Michaelis. Woelm Holding Company Limited
has granted Mr. Black a revocable power of attorney to vote such
shares [see footnote (b)].
(d) Includes the following additional 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 the
Woelm Holding Company Limited, of which Mr. Beckman is a director,
which are also subject to a revocable proxy in favor of Mr. Black
[see footnotes (b) and (c)] and (ii) 79,614 shares held by trusts of
which Mr. Beckman is a trustee with shared voting and investment
power; Mr. Black is a co-trustee of such trusts [see footnote (b)].
(e) Includes the following additional shares of which Mr. Boyer is
deemed to be a "beneficial owner" under the applicable rules of the
Securities and Exchange Commission: (i) 850 shares he holds as
custodian for his daughter, and (ii) 200 shares owned of record and
beneficially by his daughter.
(f) Includes 86,200 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.
(g) Ronald D. Boldt, Vice President-Human Resources, failed to report on
a timely basis, sales of 400 shares and 725 shares of the Company's
common stock, required to be reported by Section 16(a) of the
Securities Exchange Act of 1934. Mr. Boldt filed amended Forms 4 to
report the sales, in the one case 38 days and in the other case 10
days, after the required filing date.
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. The board has
fixed the number of directors which shall constitute the entire board at
nine, but beginning with the 1995 Annual Meeting of Stockholders, the
number has been fixed at ten.
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 1995 Annual Meeting of Stockholders, four directors
will be elected for three-year terms expiring at the Annual Meeting of
Stockholders of the Company in 1998. The board, on recommendation of
the Nominating Committee, has nominated for election for three-year
terms Messrs. Beckman, Hutchinson, Remer and Dr. Gonnella.
It is intended that shares represented by properly executed proxies
will be voted for the election of Messrs. Beckman, Hutchinson, Remer
and Dr. Gonnella for a term expiring in 1998. 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. Except for Dr. Gonnella, all of the nominees and continuing
directors were elected by the stockholders of the Company.
2
<PAGE>
Name, Age and Year Business Experience During Past 5 Years
First Elected Director and Other Directorships
------------------------------- ----------------------------------------------
NOMINEES TO BE ELECTED FOR
TERMS EXPIRING IN 1998
--------------------------
Donald Beckman, 63 ............ Special Counsel, Saul, Ewing, Remick &
1981 Saul, Philadelphia, PA, attorneys;
Partner, Beckman & Hunt, Philadelphia,
PA, attorneys (1988-1993).
Pemberton Hutchinson, 63 ...... Chairman and Director, Westmoreland Coal
1977 Company, a coal mining company;
Chairman, Chief Executive Officer and
Director (1992-1993); Chairman,
President, Chief Executive Officer and
Director (1989-1992); Westmoreland filed
a voluntary petition under the Federal
bankruptcy laws on November 8, 1994 and
its confirmed plan of reorganization
became effective on December 22, 1994;
Director, Mellon Bank Corporation and The
Pep Boys.
John H. Remer, 70 President, Chief Executive Officer and
1956 Director, Package Machinery Company
(1992-1993); Vice Chairman of the Board
(1990-1992); Vice Chairman of the Board
of the Company (1988-1990)
Joseph S. Gonnella, M.D., 60 .. Senior Vice President and Dean, Jefferson
Medical College.
CONTINUING DIRECTORS WHOSE
TERMS EXPIRE IN 1996
--------------------------
Lennox K. Black, 64 ........... Chairman of the Board and Chief Executive
1971 Officer of the Company; Director, Penn
Virginia Corporation, Quaker Chemical
Corporation, The Pep Boys, and
Westmoreland Coal Company.
Lewis E. Hatch, Jr., 68 ....... Chairman and Chief Operating Officer, Rusch
1976 International, the Company's Medical
Group (1990-1992); President. LEH
Consulting, Inc. (1986-1990); Director,
Park-Ohio Industries, Inc.
James W. Stratton, 58 ......... Chairman and Chief Executive Officer,
1993 Stratton Management Company, an
investment advisory and management firm;
Chairman, Chief Executive Officer and
Director of Fin Da Tex, Inc., a financial
services company; Chairman and Director
of Stratton Monthly Dividend Shares and
Stratton Growth Fund, registered
investment companies; Director, Alco
Standard Corporation, Gilbert Associates,
Inc. and UGI Corporation.
CONTINUING DIRECTORS WHOSE
TERMS EXPIRE IN 1997
--------------------------
David S. Boyer, 52 ............ President of the Company; Director
1993 (1986-1991).
Sigismundus W. W. Lubsen, 51 .. President, Chief Executive Officer and
1992 Director of Quaker Chemical Corporation,
a manufacturer of specialty chemical
products; President, Chief Operating
Officer and Director (1988-1993);
Director, Ensign-Bickford Industries, Inc.
Palmer E. Retzlaff, 63 ........ President and Director, Southwest Grain
1978 Corporation, McAllen, Texas, engaged
primarily in cotton and grain export;
Director, Paris Business Forms.
ADDITIONAL INFORMATION ABOUT THE BOARD OF DIRECTORS
The Board of Directors of the Company met seven times in 1994. Each
of the nominees (except Dr. Gonnella, who is not yet a member of the
board) and continuing directors attended at least seventy-five percent
of the combined total of board meetings and meetings held in 1994 by
committees on which he served.
3
<PAGE>
The Board of Directors has appointed an Audit Committee, currently
composed of Messrs. Beckman, Hatch, and Hutchinson, which held three
meetings in 1994. The Audit Committee reviews with the Company's
independent accountants the proposed scope of their examination and
their subsequent report on each annual audit, preliminary to the
consideration thereof by the full Board of Directors.
The Board of Directors of the Company has also appointed a
Nominating Committee, currently composed of Messrs. Hutchinson, Remer
and Retzlaff which held one meeting in 1994. 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 7, 1996.
The Board of Directors of the Company also has an Executive
Committee, currently composed of Messrs. Black, Hatch and Hutchinson.
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.
BOARD COMPENSATION COMMITTEE
The Compensation Committee appointed by the Board of Directors
consists of three members, Messrs. Beckman, Lubsen and Stratton, which
held two meetings in 1994. The Compensation Committee makes
recommendations regarding the Company's remuneration arrangements for
its senior management to the Company's Board of Directors. It also
approves the persons to receive stock option grants and restricted stock
awards under the Company's Stock Compensation Plans and the number of
shares subject to such grants and awards.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Beckman is Special Counsel to the law firm of Saul, Ewing,
Remick & Saul, which provided legal services to the Company in 1994.
Mr. Lubsen is the President and Chief Executive Officer and a
director of Quaker Chemical Corporation. Mr. Lennox K. Black, Chairman
and Chief Executive Officer of the Company is also a director of Quaker
Chemical Corporation.
The Company, through TFX Equities, a wholly-owned subsidiary of the
Company, has entered into certain investment agreements with Nouveau
International, Inc. ("Nouveau"), a manufacturer of automated food
service equipment and food products. Pursuant to the agreements and
otherwise, the Company made loans and advances to Nouveau of an
aggregate of $1,927,000 secured by Nouveau's assets, of which $1,927,000
principal amount was outstanding at December 25, 1994. Nouveau
commenced a proceeding for reorganization under Chapter XI of the
Bankruptcy Code which is still pending, and as a result of this
proceeding all amounts due at year end, not previously reserved, have
been fully reserved. Messrs. Beckman and Black were directors of
Nouveau in 1994 and are participating, along with one other person, as
a group, in the Nouveau investment agreements on the same terms as the
Company.
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 the following three parts:
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 7.
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
4
<PAGE>
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 executives' 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 productivity,
product quality, new product development and increased market
share). 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. However, bonus awards are made to
executive officers 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 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 70% of salary) and the chief executive officer (whose bonus
limitation is 90% of salary).
Long-term incentive compensation consists of awards of stock
options and restricted stock under the Company's 1990 Stock
Compensation Plan. 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. Awards to specific
executives have not been based on any preset formulae or
entitlement standard, but reflect the Compensation Committee's
subjective perception of such executives' individual
contributions to the Company's successful performance in the
preceding year or the Committee's determination that individual
executives undertaking 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.
Applying these policies to the compensation of the Chief Executive
Officer, Mr. Black's base salary was fixed at $400,000 for 1994, an
increase of less than 2.6% over his salary for the prior year. This
reflected the Committee's view that a greater portion of the chief
executive officer's cash compensation for a year, compared with other
senior executives, should be at risk by way of a bonus determined in
light of the Company's performance during the year. Mr. Black was
awarded a bonus of $200,000 for 1994 based on consideration of the
Company's growth in earnings per share for that year of 21% over the
prior year. No long-term incentive compensation has been awarded to Mr.
Black since 1991.
5
<PAGE>
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. Amendments have been proposed
to the Company's 1990 Stock Compensation Plan (see page 10) to permit
awards granted under the Plan to be eligible for exemption from the
limit. The Committee retains discretion to make awards which may not be
fully deductible in certain cases. Compensation paid in 1994 did not
exceed the deductible limit.
DONALD BECKMAN SIGISMUNDUS W. W. LUBSEN JAMES W. STRATTON
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. The Amex Capital Goods Index is shown again
this year even though the Company's Stock is no longer listed on the
American Stock Exchange because it was used last year when the Company
was included in that Index and the SEC rules require that when a new
index is selected, the prior index must also be shown in the year a
change first occurs.
MARKET PERFORMANCE
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN (A)
[ID: GRAPHIC -- LINE CHART]
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
TELEFLEX 100 106.6 162.6 154.7 187.3 182.3
S&P 500 100 96.9 126.4 136.1 149.8 151.7
S&P MIDCAP 400 100 94.9 142.4 159.4 181.6 175.1
AMEX CAPITAL GOODS 100 83.5 101 102.3 126.5 122.3
--------------------------------------------------------------------
</TABLE>
(a) Assumes $100 invested on January 1, 1989 in Teleflex common
stock, S&P 500 Index, S&P MidCap 400 Index, and Amex Capital Goods Index
using a fiscal year ending December 31 in all cases.
6
<PAGE>
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
27, 1992, December 26, 1993, and December 25, 1994, 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 salary and bonus earned by
such executive officers during fiscal year 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION> Annual Compensation
------------------- All Other
Name and Principal Position Year Salary Bonus Compensation (a)
--------------------------- ---- ------ ----- ----------------
<S> <C> <C> <C> <C>
Lennox K. Black 1994 $400,000 $200,000 $55,745
Chairman, Chief Executive 1993 $390,000 $ 85,000 $37,437
Officer and Director 1992 $375,000 $ 75,000 $23,908
David S. Boyer 1994 $310,000 $175,000 $ 4,859
President and Director 1993 $260,000 $ 80,000 $ 4,583
1992 $250,000 $ 70,000 $ 2,974
Richard A. Woodfield 1994 $250,000 $110,000 $ 2,236
President and Chief Operating 1993 $205,000 $ 30,000 $ 1,665
Officer -- TFX Medical 1992 $160,000 $ 50,000 $ 327
John J. Sickler 1994 $250,000 $100,000 $ 2,010
President -- TFX Equities Inc. 1993 $227,000 $ 60,000 $ 1,858
1992 $220,000 $ 50,000 $ 1,709
Roy C. Carriker 1994 $250,000 $ 60,000 $ 4,646
President and Chief Operating 1993 $218,000 $ 60,000 $ 4,497
Officer -- TFX Aerospace 1992 $210,000 $ 40,000 $ 4,236
</TABLE>
------------
(a) The information reported includes the following for fiscal year
1994: (i) the dollar value of split dollar life insurance premiums
paid for the benefit of each of the named executives as follows:
Mr. Black, $55,745; Mr. Boyer, $2,549; Mr. Woodfield, $375; Mr.
Sickler, $2,010; Dr. Carriker, $2,461; (ii) contributions to the
Company's Voluntary Investment Plan on behalf of the named
executives to match 1994 pre-tax elective deferral contributions
under (section-mark)401(k) of the Internal Revenue Code made to
such plan as follows: Mr. Boyer, $2,310; Mr. Woodfield, $1,861;
Dr. Carriker, $2,185.
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 25, 1994, 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
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-money
Shares Options at FY-End Options at FY-End(a)
Acquired --------------------- --------------------
on Exer- Unexer- Exer- Unexer-
Name Exercise cisable cisable cisable cisable
---- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Lennox K. Black -- 127,500 -- $1,903,091 --
David S. Boyer -- 63,000 12,000 $ 994,734 $168,996
Richard A. Woodfield -- 15,000 8,000 $ 87,750 $ 30,000
John J. Sickler -- 52,500 10,500 $ 814,611 $147,872
Roy C. Carriker -- 52,500 10,500 $ 814,611 $147,872
</TABLE>
------------
(a) Market value of underlying securities at year-end, minus the
exercise price.
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PENSION PLANS
Under the Company's Salaried Employees' Pension Plan, a qualified
defined benefit pension plan, as well as non-qualified supplemental
pension plans that provide benefits that would otherwise be denied
participants by reason of certain Internal Revenue Code limitations on
qualified plan benefits, a participant accumulates units of annual
pension benefit for each year of service. For each of the first 35
years of service, a participant's unit is equal to 1.375% of his annual
plan compensation up to $10,560, plus 2.0% of such compensation in
excess of $10,560. For each year of service in excess of 35, a
participant's unit is equal to 1.833% of his annual plan compensation.
A participant's annual plan compensation for any plan year (July 1 to
June 30) is his or her base salary (as reported in the Summary
Compensation Table) on the first day of the plan year. 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) for each of the named executives is: Mr. Black,
$119,213; Mr. Boyer, $131,678; Mr. Woodfield, $72,995; Mr. Sickler,
$104,853; Dr. Carriker, $80,861.
EMPLOYMENT CONTRACTS AND TERMINATION, SEVERANCE AND
CHANGE-OF-CONTROL ARRANGEMENTS
In connection with the Company's long-term plans for orderly
management succession, Lennox K. Black will retire as Chief Executive
Officer at the forthcoming Annual Meeting of Stockholders. David S.
Boyer, now President and Chief Operating Officer, will become President
and Chief Executive Officer. Mr. Black will continue to serve the
Company on a full time basis until December 31, 1998, unless he elects
to retire earlier. Thereafter he may serve on a reduced-time consulting
basis until December 31, 2005. The Company's agreement with Mr. Black
provides that during the period of his full time service his salary will
not be less than $350,000, 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 for the first five years and $200,000
thereafter, all subject to adjustment for inflation. Mr. Black's
agreement also provides for death and disability benefits and
compensation continuation for up to two years in case of termination of
employment under certain circumstances. Mr. Black is entitled to
receive deferred compensation following his retirement or other
termination of his employment at the annual rate of $100,000 for fifteen
years. 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 which may be payable to him. 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 a period of ten years following such termination.
The Company's agreement with Mr. Boyer provides for minimum base
salary of $310,000 during his employment, for continuation of base
salary in the event of his disability and, in the event of the
termination of his employment under certain other circumstances, for
continuation of his compensation and benefits for three years.
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. In 1994, directors of the Company who were not
also employees of the Company or any of its subsidiaries were paid an
annual fee of $15,000, plus expenses. In addition, these outside
directors, on their election to the board, received a restricted stock
award of the number of shares of the Company's common stock which had a
fair market value of $5,000 multiplied by the number of years remaining
in the term for which elected as a director. A director who fails to
complete the full term to which elected, forfeits the shares that were
awarded.
Louis E. Hatch, Jr., a director of the Company, also provided
consulting services to the Company in 1994, for which he received fees
of $64,250.
AMENDMENTS TO THE 1990 STOCK COMPENSATION PLAN
The Company's 1990 Stock Compensation Plan (the "Plan") was adopted
by the Board of Directors and approved by the stockholders at the 1990
annual meeting. Amendments to the Plan were approved by the
stockholders at the 1991 annual meeting.
The Board of Directors believes that the Plan has promoted the
interests of the Company and its stockholders by enhancing opportunities
to attract, retain and motivate key employees through awards of stock
options and restricted stock and that the Company should continue to
utilize such awards as part of
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a competitive compensation program. Accordingly, the Board of
Directors proposes that the Plan be amended, with the approval of the
stockholders, in the following principal respects:
1. To increase the number of shares available for future awards
under the Plan by 1,000,000 shares, which would provide an aggregate
of 1,021,619 shares, available for such awards including the 21,619
shares remaining available under the Plan prior to this amendment;
and
2. To make certain technical changes which will allow the
Company to maximize the deductibility for federal income tax
purposes of the compensation of its executives.
The following is a summary of the material features of the Plan as
proposed to be amended.
GENERAL
The Plan provides for the grant of incentive and non-qualified stock
options and awards of restricted stock to executive officers (now 12)
and other key employees (now approximately 200) of the Company and its
subsidiaries and for the grant of non-qualified options and restricted
stock awards to directors who are not employees ("outside directors") of
the Company (now 7). In the case of any such grant to outside
directors, under current law and regulations, the Company's stockholders
must first approve the number or maximum number of shares to be acquired
by such directors and the terms upon which and the times at which or the
period within which such restricted shares may be acquired or such
options may be acquired and exercised. The stockholders have approved
certain restricted stock awards to outside directors as described below.
The Plan does not presently authorize the grant of stock options to
outside directors.
The Plan presently authorizes the grant of options and restricted
stock awards for a total of 1,050,000 shares of the Company's common
stock, subject to adjustment in the case of stock dividends, stock
splits, recapitalizations or other similar corporate changes. The
proposed amendments would increase such authorized shares by 1,000,000
to 2,050,000 shares. At February 1, 1995 an aggregate of 1,028,381
shares had been issued or reserved for issuance on the exercise of
outstanding options pursuant to the Plan. Thus, 1,021,619 shares would
be available for future awards under the Plan if the stockholders
approve the proposed amendments. The Plan expires on February 4, 2000,
after which no further options or restricted stock awards may be granted
thereunder.
Under the proposed amendments to the Plan no individual participant
may receive stock options or restricted stock awards in any five year
period which exceed in the aggregate 5% of the shares authorized for
issuance under the Plan.
The Plan is administered by a Committee of directors not eligible
for selection (otherwise than upon specific stockholder approval, under
current law and regulations) to receive options or restricted stock
awards under the Plan. Except for grants to outside directors, the
Committee (or the Board upon the recommendation of the Committee)
selects the persons to whom such options and restricted stock awards are
to be granted and determines the number of shares to be subject to and
the terms and conditions of such options and restricted stock awards.
Within the parameters prescribed in the Plan the Committee has broad
discretion to fix terms and conditions for the exercise of stock options
and the vesting of restricted stock awards, including the attainment of
preestablished performance goals.
No stock options or restricted stock awards under the Plan as
proposed to be amended have been allocated to any person, so the
benefits or amounts which may be awarded in the future are not now
determinable. In 1994 no awards of stock options or restricted stock
were made to any of the executive officers named in the Summary
Compensation Table at page 7. In 1994 stock options for 225,500 shares
were granted to all employees as a group, including 5,000 shares to
three executive officers other than the named executive officers. Upon
their election at last year's annual meeting the two outside directors
who were then elected each received restricted stock awards of 435
shares, having a value of $15,000, pursuant to the automatic grant
provisions of the Plan. No other awards of restricted stock have been
made since the beginning of 1994.
The Plan and any option or restricted stock award granted thereunder
may be amended by the Board of Directors or the Committee, but any
amendment which (i) increases the aggregate number of shares of common
stock that may be issued under the Plan, (ii) changes the class of
eligible employees or (iii) otherwise requires the approval of
stockholders of the Company in order to maintain the exemption available
under Rule 16b-3 of the Securities and Exchange Commission requires the
prior approval of the stockholders of the Company.
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STOCK OPTIONS
Incentive and non-qualified stock options granted under the Plan may
not have an option price that is less than the fair market value of the
stock on the date of grant.
The aggregate fair market value (determined as of the time options
are granted) of shares with respect to which incentive stock options may
first become exercisable in any one calendar year under the Plan and any
other plan of the Company or certain affiliates may not exceed
$100,000.
Options granted under the Plan are exercisable only by the optionee
during such optionee's lifetime and are not transferable except by will
or the laws of descent. Options granted under the Plan may be exercised
in whole or in part in such manner as the Committee determines except
that no option may be exercised before one year or after ten years from
the date of grant.
If an optionee's relationship with the Company and its subsidiaries
terminates, the expiration of the option may accelerate. "Relationship"
for purposes of the Plan means the cessation of continuous service as an
employee of the Company or any subsidiary or as an outside director or,
in the case of a former employee or director, as an independent
consultant providing substantial services to the Company or a
subsidiary. If an optionee's relationship terminates for any reason
other than death, the option cannot be exercised after three months
from the date of such termination, provided that if the termination is
due to the disability of the optionee, the Committee has the discretion
to determine the period (which in the case of incentive stock options
may not exceed one year) after such cessation during which the option
may be exercised, but not beyond the expiration of the term of the
option. In the case of an optionee's death, the option may be exercised
by the person to whom the optionee's rights have passed by will or the
laws of descent within six months after the optionee's death in the case
of an incentive stock option, and one year in the case of a
non-qualified option, unless the option expires by its terms prior to
the end of such period.
Subject to the approval of the Committee or such person as may be
designated from time to time by the Committee as the Plan Administrator,
an optionee may pay all or such portion of the option price not paid in
cash in shares of the Company's common stock having an aggregate fair
market value equal to the portion of the option price to be so paid by
delivering such shares to the Company or by requesting that the Company
withhold such shares from the shares purchased.
RESTRICTED STOCK AWARDS
Restricted stock awards under the Plan entitle the participant to
receive without payment a specified number of shares subject to
forfeiture during a specified restriction period. Upon the grant of a
restricted stock award, the certificates representing the shares subject
to the award will be registered in the participant's name and retained
by the Company pending the vesting or forfeiture of the shares. Except
in the case of awards to outside directors, which under current law and
regulations must be approved by the stockholders as described above, the
Committee determines the restriction periods and the times at which the
shares subject to restricted stock awards will vest, provided that no
shares may vest before one year from the date of the award.
Upon the election or reelection of an outside director such director
receives a restricted stock award of such number of shares as has a fair
market value at the date of such election equal to $5,000 multiplied by
the number of years of the term for which such director is elected. The
restriction period of each such award is the term for which the
recipient is then elected.
Restricted stock awards are not transferable except by will or the
laws of descent. In the event that a participant's relationship with
the Company or any of its subsidiaries terminates for any reason (other
than death or disability in certain cases) any shares subject to the
participant's restricted stock award which have not then vested will be
forfeited by the participant. If such cessation of relationship with
the Company is due to the death or the disability of an employee
participant, all shares subject to such participant's restricted stock
award which have not vested will be forfeited, except that if such
cessation occurs more than one year after the date of the grant and,
under the terms of the restricted stock award, no shares have then
vested, a portion of the award which equals the ratio of the number of
whole years between the date of a grant and the date of such cessation
to the total restriction period shall vest.
The recipient of a restricted stock award will have voting and
dividend rights with respect to the shares subject to the restricted
stock award unless otherwise determined by the Committee.
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<PAGE>
If the proposed amendments are approved by the stockholders, the
Committee contemplates that it will condition certain awards of
restricted stock to be made from time to time to executive officers and
other key employees on the attainment of performance goals during
specified periods of one to three years. The terms of each award would
be established within 90 days after the commencement of the applicable
performance period, including the number of shares which may be awarded
or become vested thereunder, the specific performance goals to be
attained and the extent to which partial attainment of any goal may
result in a partial award or vesting of shares. Performance goals will
be based on increases, during the performance period, over a specified
immediately preceding period of one or more of the following
performance criteria of the Company or a specified division thereof:
earnings per share, operating margins, return on average equity and
revenues. The Committee may specify in awards that applicable criteria
shall be calculated without regard to changes after the beginning of a
performance period in accounting standards that may be required by the
Financial Accounting Standards Board or similar authority.
TAX CONSEQUENCES
The Company has been advised by its counsel that under present
federal tax laws, the federal income tax consequences of options granted
or exercised and restricted stock awards granted under the Plan are as
follows:
Incentive Stock Options. An optionee recognizes no income and
the Company receives no deduction for federal income tax purposes
when an incentive stock option is granted or exercised. If an
employee sells shares acquired upon the exercise of an incentive
stock option at any time after two years from the date of grant of
such option and one year after the date on which the option shares
are issued to him or her, any gain or loss realized upon such sale
will be capital gain or loss. The Company will not be entitled to
take any deduction as the result of any such sale.
Non-Qualified Stock Options. An optionee recognizes no income
and the Company receives no deduction for federal income tax
purposes when a non-qualified option is granted. Upon exercise of a
non-qualified option, an optionee will realize ordinary income in an
amount measured by the excess of the fair market value of the shares
on the date of exercise over the option price and the Company, upon
compliance with certain withholding rules, will be entitled to a
deduction in the same amount.
Exercise with previously owned common stock of the Company. If
an optionee pays the option exercise price with previously-owned
shares of common stock, the number of shares received equal to the
number of shares surrendered are treated as having been received in
a tax-free exchange.
Restricted Stock Awards. The recipient of a restricted stock
award recognizes no income and the Company can take no deduction for
federal income tax purposes when a restricted stock award is
granted, unless the recipient makes an election to recognize income
on the date of the grant. On the date of vesting of shares subject
to a restricted stock award (or if a participant so elects, on the
date of grant) a participant will realize ordinary income in an
amount equal to the fair market value of the shares on that date and
the Company, upon compliance with certain withholding rules, will be
entitled to a deduction in the same amount. If a participant who
elects to recognize income on the date of a grant subsequently
forfeits shares subject to the participant's restricted stock award,
the participant will not be entitled to either a deduction for the
amount previously recognized as income with respect to the forfeited
shares or refund of any taxes paid thereon.
TAX WITHHOLDING
Subject to the approval of the Committee or the Plan Administrator,
a grantee of an option or a restricted stock award under the Plan may
choose to pay all or any portion of withholding taxes not paid to the
Company in cash by delivering to the Company shares of the Company's
common stock having an aggregate fair market value equal to such portion
of the withholding tax or by requesting that the Company withhold such
shares from the shares purchased or to be received.
The closing price per share of the Company's common stock on the New
York Stock Exchange on March 1, 1995 was $37.00.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
APPROVAL OF THE 1990 STOCK COMPENSATION PLAN AS PROPOSED TO BE AMENDED.
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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 Price Waterhouse LLP
(the "Firm") to examine and report on the financial statements of the
Company for its fiscal year ending December 31, 1995. The Firm has
audited the Company's books for more than 30 years and has served as its
independent accountants for 1994. 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 Price Waterhouse, 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 PRICE WATERHOUSE LLP AS THE AUDITORS
OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 1995.
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, to which no postage need be affixed if
mailed in the United States or Canada. 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 1996 ANNUAL MEETING OF
STOCKHOLDERS OF THE COMPANY MUST BE RECEIVED BY THE COMPANY AT ITS
PRINCIPAL EXECUTIVE OFFICES NO LATER THAN NOVEMBER 24, 1995, AND MUST
COMPLY IN ALL OTHER RESPECTS WITH APPLICABLE RULES AND REGULATIONS OF
THE SECURITIES AND EXCHANGE COMMISSION RELATING TO SUCH INCLUSION.
By Order of the Board of Directors,
STEVEN K. CHANCE, Secretary
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THIS PAGE INTENTIONALLY BLANK
13
<PAGE>
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
TELEFLEX INCORPORATED
The undersigned hereby appoints Lennox K. Black and Lewis E. Hatch,
Jr., 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 28, 1995 or any adjournment
thereof.
(Continued, and to be marked, dated and signed, on the other side)
<PAGE>
|-----| PLEASE MARK YOUR
| X | VOTES AS IN THIS
|-----| EXAMPLE.
NOMINEES: Donald Beckman
Pemberton Hutchinson
FOR WITHHELD John H. Remer
all FOR all Joseph S. Gonnella, M.D.
Nominees Nominees
Item 1.
Election |-----| |-----|
of | | | |
Directors: |-----| |-----|
Withheld for the following only (Write the name of the
nominee(s) in the space below):
-------------------------------------------------------
------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ALL NOMINEES" IN
ITEM 1 AND "FOR" ITEMS 2, AND 3.
------------------------------------------------------------------------------
Item 2. Approval of the 1990 Stock Compensation FOR AGAINST ABSTAIN
Plan as amended to (i) increase by |-----| |-----| |-----|
1,000,000 the number of shares issuable | | | | | |
under the Plan and (ii) make awards |-----| |-----| |-----|
eligible for exemption from IRC limitations on deductibility of
certain executive compensation expenses.
Item 3. Ratification of the appointment of Price FOR AGAINST ABSTAIN
Waterhouse LLP as independent public |-----| |-----| |-----|
accountants for the Company for the year | | | | | |
1995. |-----| |-----| |-----|
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" ITEMS 2 AND 3.
I PLAN TO |-----|
ATTEND MEETING | |
|-----|
PLEASE MARK, DATE AND SIGN AS YOUR NAME APPEARS ABOVE AND
RETURN IN THE ENCLOSED ENVELOPE.
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, as 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.
<PAGE>
APPENDIX OF
GRAPHIC AND IMAGE MATERIAL
OMITTED FROM ELECTRONIC FORMAT DOCUMENT
PURSUANT TO RULE 304 OF REGULATION S-T
Performance Graph comparing cumulative total return on Teleflex
Common Stock against S&P 500 Index, S&P MidCap 400 Index and Amex
Capital Goods Index appears on page 6 of the Definitive Proxy
Statement.
