<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] 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
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(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] 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:
--------------------------------------------------------------
[ ] 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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<PAGE>
[LOGO] TELEFLEX INCORPORATED
PLYMOUTH MEETING, PENNSYLVANIA 19462
- ------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, APRIL 24, 1998
- ------------------------------------------------------------------------
TO THE STOCKHOLDERS OF TELEFLEX INCORPORATED:
The Annual Meeting of Stockholders of Teleflex Incorporated will be
held on Friday, April 24, 1998, at 10:00 a.m. at the JEFFERSON HOUSE
RESTAURANT BALLROOM, 2519 DEKALB PIKE, NORRISTOWN, 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 proposed amendment to the Company's
Certificate of Incorporation to increase the number of authorized shares of
common stock of the Company from 50,000,000 to 100,000,000;
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 27, 1998; 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
6, 1998, 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 25, 1998
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 24, 1998, 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, for proposal 2 described below at
page 8, and for proposal 3 described below at page 9.
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 25, 1998.
RECORD DATE AND VOTING PROCEDURE
Only stockholders of record at the close of business on March 6, 1998,
are entitled to vote at the Annual Meeting. At that date, the Company had
outstanding and entitled to vote 37,252,198 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 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.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of February 1, 1998, 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 461, Plymouth Meeting, PA 19462 ..... 4,234,040(b) 11.19
Donald Beckman, 3800 Centre Square West,
Philadelphia, PA 19102 .................... 3,068,630(c) 8.11
Woelm Holding Company Limited, Cedar House,
41 Cedar Street, Hamilton, Bermuda ........ 2,885,580(d) 7.62
T. Rowe Price Associates, Inc.,
100 East Pratt Street, Baltimore, MD 21202. 3,506,550(e) 9.26
Patricia C. Barron .......................... nil *
David S. Boyer .............................. 226,124 *
Roy C. Carriker, Ph.D. ...................... 270,311(f) *
Joseph S. Gonnella, M.D. .................... 2,422(g) *
Lewis E. Hatch, Jr. ......................... 1,622 *
Pemberton Hutchinson ........................ 6,938 *
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
Shares Percent
Beneficially of Outstanding
Name (& Address of 5% Shareholders) Owned(a) Common Stock
- ----------------------------------- ------------ --------------
<S> <C> <C>
Sigismundus W. W. Lubsen .................... 2,970 *
John H. Remer ............................... 8,722 *
Palmer E. Retzlaff .......................... 19,820 *
John J. Sickler ............................. 188,718 *
James W. Stratton ........................... 21,476(h) *
Harold L. Zuber, Jr. ........................ 115,481 *
All officers and directors as a group
(20 persons) .............................. 5,320,621 14.06
</TABLE>
- ------------
*Represents holdings of less than 1%.
(a) Includes (i) shares subject to presently exercisable stock options as
follows: Mr. Black--225,000, Mr. Beckman--6,000, Mr. Boyer--163,200, Dr.
Carriker--24,000, Mr. Retzlaff--6,000, Mr. Sickler--129,000, Mr.
Zuber--69,000 and all officers and directors as a group--731,800 (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--2,274,
Dr. Carriker--2,399, Mr. Zuber--4,931 and all officers and directors as
a group-22,021.
(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) 2,885,580 shares owned of record and
beneficially by Woelm Holding Company Limited, and 283,640 shares owned
of record and beneficially by two persons, for which Mr. Black holds
revocable powers of attorney to vote such shares, and (ii) 159,228
shares held by trusts of which Mr. Black is co-trustee and with respect
to which he shares voting and investment power.
(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) 2,885,580 shares held by Woelm Holding Company
Limited of which Mr. Beckman is a director are subject to a revocable
proxy in favor of Mr. Black [see footnote (b)], and (ii) 159,228 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)].
(d) 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. As noted in footnote (b) Woelm Holding Company Limited has
granted Mr. Black a revocable power of attorney to vote such shares and
such shares are included in the 4,234,040 shares shown opposite Mr.
Black's name in the foregoing table.
(e) These shares are owned by various individual and institutional
investors which T. Rowe Price Associates, Inc. (Price Associates)
serves as investment adviser with power to direct investments and/or
sole power to vote the shares. Under the applicable rules of the
Securities and Exchange Commission, Price Associates is deemed to be a
"beneficial owner" of such shares; however, Price Associates expressly
disclaims that it is, in fact, the beneficial owner of such shares.
(f) 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.
(g) 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.
(h) Includes 18,582 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
During the Company's most recent fiscal year, the following transaction
involving the Company's common stock was not reported on a timely basis as
required by Section 16(a) of the Securities Exchange Act of 1934:
Sigismundus W. W. Lubsen, a Director of the Company, failed to report the
purchase of 1,000 shares on September 23, 1997 in a timely manner. A Form
4 for the month of September reporting the matter was filed with the
Securities Exchange Commission fifteen days late.
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 at
ten 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
1998 Annual Meeting of Stockholders, four directors will be elected for
three-year terms expiring at the Annual Meeting of Stockholders of the
Company in 2001. The board, on recommendation of the Nominating Committee,
has nominated for election for three-year terms Messrs. Beckman,
Hutchinson, and Gonnella and Mrs. Barron.
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It is intended that shares represented by properly executed proxies
will be voted for the election of Messrs. Beckman, Hutchinson, and
Gonnella and Mrs. Barron for a term expiring in 2001. 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. With the exception of Mrs. Barron, who was elected a director
by the Board of Directors at its meeting on February 2, 1998, all of the
nominees and continuing directors were elected by the stockholders of the
Company.
<TABLE>
<CAPTION>
Name, Age and Year Business Experience During Past 5 Years
First Elected Director and Other Directorships
- ------------------------------- ----------------------------------------------
<S> <C>
NOMINEES TO BE ELECTED FOR
TERMS EXPIRING IN 2001
- --------------------------
Patricia C. Barron, 55 ........ Corporate Vice President, Business
1998 Operations, Xerox Corporation,
Stamford, Connecticut, a manufacturer
of office systems;
President, Xerox Engineering Systems
Division (1994-1998); President, Xerox Office
Document Products Division (1992-1994);
Director, Aramark Corporation,
Frontier Corporation, Quaker Chemical
Corporation and Reynolds Metals
Corporation.
Donald Beckman, 66 ............ Special Counsel, Saul, Ewing, Remick & Saul LLP,
1981 Philadelphia, PA, attorneys.
Joseph S. Gonnella, M.D., 63 .. Senior Vice President and Dean,
1995 Jefferson Medical College.
Pemberton Hutchinson, 66 ...... Chairman and Director (1993-1996),
1977 Westmoreland Coal Company,
a mining company; 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;
Westmoreland filed a voluntary
petition under the Federal
bankruptcy laws on December 23, 1996 and
filed a plan of reorganization
on February 2, 1998; Director,
Mellon Bank Corporation and Westmoreland
Coal Company.
CONTINUING DIRECTORS WHOSE
TERMS EXPIRE IN 1999
- --------------------------
Lennox K. Black, 67 ........... Chairman of the Board of the Company;
1971 Chairman and Chief Executive Officer
(1982-1995); Chairman and Director,
Penn Virginia Corporation; Director,
Quaker Chemical Corporation, and
The Pep Boys and Image Max, Inc.
Lewis E. Hatch, Jr., 71 ....... Business Consultant; Director, Image Max,
1976 Inc. and Park-Ohio Industries, Inc.
James W. Stratton, 61 ......... 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, Stratton Small
Cap Yield Fund, and Stratton Growth Fund
and Stratton Special Value-Fund,
registered investment companies; Director,
Alco Standard Corporation, UGI Corporation
and Unisource, Inc.
NOMINEES TO BE ELECTED FOR
TERMS EXPIRING IN 2000
- --------------------------
David S. Boyer, 55 ............ President and Chief Executive Officer of
1993 the Company; President (1986-1995),
Director (1986-1991).
Sigismundus W. W. Lubsen, 54 .. Member of the Executive Board, Heineken N.V.,
1992 Amsterdam, The Netherlands, a manufacturer of
beer and ale products; President, Chief
Executive Officer and Director of Quaker
Chemical Corporation (1993-1995).
Palmer E. Retzlaff, 65 ........ President and Director, Southwest Grain Inc.,
1978 McAllen, Texas, engaged primarily in
cotton and grain export; Director,
Harleysville National Corporation and
Paris Corporation.
3
<PAGE>
ADDITIONAL INFORMATION ABOUT THE BOARD OF DIRECTORS
The Board of Directors of the Company met seven times in 1997. Each of
the nominees and continuing directors attended at least seventy-five
percent of the combined total of board meetings and meetings held in 1997
by committees on which he served.
The Board of Directors has appointed an Audit Committee, currently
composed of Messrs. Beckman, Gonnella, and Hatch, which held three
meetings in 1997. 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. Black, Hutchinson and Lubsen
which held one meeting in 1997. 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 5, 1999.
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 currently, Messrs. Hutchinson, Lubsen and Retzlaff, which
held two meetings in 1997. 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 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 6. 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 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 con-
4
<PAGE>
sultation 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. 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. However, the Compensation Committee 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.
Mr. Boyer, the Chief Executive Officer of the Company, received a base
salary of $436,800 for 1997, an increase of 5% over his base salary for the
prior year. He was awarded a bonus of $268,000 for 1997 based largely on
consideration of the Company's financial performance for that year, which
included record revenues and growth of earnings per share of 18% over the
prior year. In addition Mr. Boyer was awarded 30,000 shares of restricted
stock under the Company's 1990 Stock Compensation Plan, pursuant to a plan
adopted in 1995 for the award of such shares after the end of the three
year period 1995 through 1997 contingent upon the Company's performance of
specific pre-established goals for increased revenue, operating margins,
return on equity and earnings per share during that period.
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 1990 Stock
Compensation Plan may be made on terms which will qualify for exception
from the deductibility limit. However, the Committee retains discretion to
make awards which are not fully deductible. Compensation paid in 1997 did
not exceed the deductible limit.
PEMBERTON HUTCHINSON SIGISMUNDUS W. W. LUBSEN PALMER E. RETZLAFF
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.
5
<PAGE>
MARKET PERFORMANCE
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN(A)
[ID: GRAPHIC -- LINE CHART]
</TABLE>
<TABLE>
<CAPTION>
1993 1994 1995 1996 1996
- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TELEFLEX 121.09 117.83 138.10 178.16 261.25
S&P MIDCAP 400 113.95 109.87 143.86 171.49 226.80
S&P 500 110.08 111.53 153.45 188.68 251.63
- --------------------------------------------------------------------
</TABLE>
(a) Assumes $100 invested on January 1, 1993 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 31,
1995, December 29, 1996, and December 28, 1997, 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 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION> Long-Term Compensation
Annual Compensation ----------------------
------------------- Restricted All Other
Name and Principal Position Year Salary Bonus Stock(a) Options Compensation (a)
- --------------------------- ---- ------ ----- ---------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C>
David S. Boyer 1997 $436,800 $268,000 30,000 -- $ 5,359
President, Chief Executive 1996 $416,000 $208,000 -- -- $ 5,378
Officer and Director 1995 $383,333 $175,000 -- 54,000 $ 5,084
Lennox K. Black 1997 $615,000 -- -- -- $72,183
Chairman and Director 1996 $598,385 -- -- -- $68,515
1995 $524,000 -- -- -- $46,357
Roy C. Carriker 1997 $294,500 $218,000 17,000 -- $ 2,989
President and Chief Operating 1996 $278,000 $140,000 -- -- $ 5,344
Officer -- TFX Sermatech 1995 $265,000 $120,000 -- 30,000 $ 5,010
John J. Sickler 1997 $278,000 $150,000 16,000 -- $ 4,756
President -- TFX Equities Inc. 1996 $278,000 $125,000 -- -- $ 2,334
1995 $265,000 $125,000 -- 30,000 $ 2,170
Harold L. Zuber, Jr. 1997 $252,000 $150,000 16,000 -- $ 2,618
Vice President, Chief Financial 1996 $225,000 $115,000 -- -- $ 2,753
Officer and Controller 1995 $212,000 $110,000 -- 30,000 $ 367
</TABLE>
- ------------
(a) Restricted share awards under the Company's 1990 Stock Compensation
Plan were granted on March 2, 1998 to the named executives pursuant to
a plan adopted in 1995 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 1995 through 1997, 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: Mr. Boyer, 30,000; Dr. Carriker,
17,000; Mr. Sickler, 16,000; Mr. Zuber, 16,000. All 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.
6
<PAGE>
(b) The information reported includes the following for fiscal year 1997:
(i) the dollar value of split dollar life insurance premiums paid for
the benefit of each of the named executives as follows: Mr. Boyer,
$2,984; Mr. Black, $72,183; Dr. Carriker, $614; Mr. Sickler, $4,756;
Mr. Zuber, $243; (ii) contributions to the Company's Voluntary
Investment Plan on behalf of the named executives to match 1997 pre-tax
elective deferral contributions under section 401(k) of the Internal
Revenue Code made to such plan as follows: Mr. Boyer, $2,375; Dr. Carriker,
$2,375; Mr. Zuber, $2,375.
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 28, 1997, and unexercised options held as of the end
of the fiscal year:
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES TABLE
<CAPTION>
Number of Unexercised Value of Unexercised
Options at FY-End in-the-money Options at FY-End(a)
--------------------- ---------------------------------
Shares Acquired
Name on Exercise Value Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David S. Boyer 6,000 $ 167,064 163,200 64,800 $3,843,180 $1,077,300
Lennox K. Black 30,000 $ 790,290 225,000 -- $5,859,337 --
John J. Sickler 21,000 $ 653,625 129,000 36,000 $3,133,357 $ 598,500
Roy C. Carriker 105,000 $2,012,483 24,000 36,000 $ 399,000 $ 598,500
Harold L. Zuber, Jr. -- -- 69,000 36,000 $1,570,867 $ 598,500
</TABLE>
- ------------
(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 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
annual plan compensation. A participant's total pension is based on his
annual plan compensation, which for each year of plan participation for the
named executives is his 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. Boyer, $161,360; Mr.
Black, $149,574; Dr. Carriker, $85,585; Mr. Sickler, $110,434; Mr. Zuber,
$118,888.
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 retired as Chief Executive Officer at the 1995
Annual Meeting of Stockholders. David S. Boyer, then President, became
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 $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 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. The Company's agreement with Mr. Black also provides for
payment upon his retirement, or at his request and with the Company's
consent before retirement, of deferred compensation at the rate of $100,000
per year for fifteen years. The Company commenced payment of this benefit
in 1995. 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 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 his lifetime.
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.
7
<PAGE>
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. Since September 1, 1997 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 1990 Stock
Compensation Plan, and each outside director in office immediately after
the annual meeting of stockholders each year (commencing with the April 24,
1998 meeting) will receive a 2,000 share stock option under the Plan.
Prior to September 1, 1997 outside directors received annual and per
meeting fees of $15,000 and $650, respectively, and, upon each election as
a director, outside directors received a restricted stock award for 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 of the term for which
such director was elected. Such restricted stock award vests upon the
completion by a director of each term to which elected, except that shares
which have not vested at or before the 1998 Annual Meeting of Stockholders
will be proportionately vested or forfeited based on the number of years of
the director's term completed compared to the total number of years to
which elected, in light of the revised compensation arrangements for
outside directors. The Company provides no pension benefits to the outside
directors.
Donald Beckman, a director of the Company, is Special Counsel to the
law firm of Saul, Ewing, Remick & Saul LLP, which provided legal services
to the Company in 1997. James W. Stratton, a director of the Company, is
an executive officer of Stratton Management Company, which provided
investment advisory services to the Company in 1997.
PROPOSED AMENDMENT OF CERTIFICATE OF INCORPORATION
The authorized capital stock of the Company consists of 50,000,000
shares of common stock, par value $1 per share, and 500,000 shares of
preference stock, par value $1 per share. On March 6, 1998 there were
37,308,439 of common stock and no shares of preference stock issued and
outstanding. In addition, as of that date, an aggregate of 3,635,649 of
common stock were reserved for issuance upon the exercise of stock options
and the grant of restricted stock pursuant to the Company's stock
compensation plans, contributions to the Company's retirement plans and
charitable foundation, and pursuant to an acquisition. Neither the holders
of common nor preference stock are entitled to any preemptive rights,
except such rights as the Board of Directors may determine in fixing the
terms of any series of preference stock which may be issued.
The Board of Directors has adopted a resolution proposing an amendment
of the Certificate of Incorporation of the Company to increase the number
of authorized shares of its common stock from 50,000,000 to 100,000,000.
The resolution to be offered at the meeting to effect this amendment is set
forth below. The affirmative vote of the holders of a majority of the
outstanding shares of common stock of the Company is necessary to adopt
this resolution. The persons named in the enclosed proxy intend to vote in
favor of the amendment unless a contrary choice is indicated on the proxy.
If the proposed amendment to increase the authorized number of shares
of common stock to 100,000,000 is approved by the stockholders, the Company
will have (based on the number of shares issued and reserved for issuance
on March 6, 1998) 59,055,912 shares of authorized common stock uncommitted
for any purpose.
The Company has no specific plans, agreements or understanding for the
issuance of any shares of its authorized and unissued capital stock except
those shares of common stock presently reserved for issuance as noted
above. The Board of Directors believes that it is in the best interest of
the Company to increase the authorized number of shares of common stock in
order to provide for future developments in which the issuance of stock may
be desirable, including acquisitions, stock splits, issuance of stock to
obtain additional equity capital and other corporate transactions. Further
stockholder authorization would not be necessary prior to any such
issuance, except in certain instances where such authorization may be
required under the rules of the New York Stock Exchange or applicable
provisions of Delaware law.
Any such issuance of additional shares of common stock could have the
effect of diluting the earnings per share and book value per share of then
existing shares of common stock, and additional shares could be used to
dilute the stock ownership of persons seeking to obtain control of the
Company. In addition, subject to applicable laws and the rules of the New
York Stock Exchange, although the Board of Directors has no present
intention of doing so, shares of common stock could be issued to a holder
who might thereby obtain sufficient voting power to ensure that any
proposal to remove directors or to amend the Certificate of Incorporation
or bylaws of the Company would not receive the requisite stockholder
8
<PAGE>
vote required therefor. However, the proposed increase in the
authorized number of shares of common stock is not being recommended
because of any potential anti-takeover effects or in response to any
specific effort to obtain control of the Company. The Board of Directors
is not aware of any presently contemplated or threatened takeover attempt
or other attempt to change control of the Company.
If the proposed amendment of the Certificate of Incorporation is
approved, the Company will shortly thereafter deliver a Certificate of
Amendment to its Certificate of Incorporation to the Secretary of the State
of Delaware for filing as required by Delaware law, and upon such filing
the amendment will become effective.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSED AMENDMENT OF ARTICLE FOURTH OF THE CERTIFICATE OF INCORPORATION
SET FORTH BELOW.
RESOLVED, that the first paragraph of Article Fourth of the Certificate
of Incorporation of the Company, as heretofore amended, be amended to read
as follows:
"FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is One Hundred Million Five
Hundred Thousand (100,500,000) of which (a) Five Hundred Thousand
(500,000) shall be Preference Stock of the par value $1 per share,
issuable in series, and (b) One Hundred Million (100,000,000) shall be
Common Stock of the par value of $1 per share."
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 to examine and
report on the financial statements of the Company for its fiscal year
ending December 27, 1998. Price Waterhouse LLP (the "Firm") has audited
the Company's books for more than 30 years and has served as its
independent accountants for 1997. 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 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 PRICE WATERHOUSE LLP AS THE AUDITORS OF
THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 27, 1998.
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 1999 ANNUAL MEETING OF STOCKHOLDERS OF
THE COMPANY MUST BE RECEIVED BY THE COMPANY AT ITS PRINCIPAL EXECUTIVE
OFFICES NO LATER THAN NOVEMBER 20, 1998, 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
9
<PAGE>
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
TELEFLEX INCORPORATED
The undersigned hereby appoints Lewis E. Hatch, Jr., and James W. Stratton,
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 24, 1998 or any adjournment
thereof.
(Continued, and to be marked, dated and signed, on the other side)
<PAGE>
|-----| PLEASE MARK YOUR
A | X | VOTES AS IN THIS
|-----| EXAMPLE.
FOR WITHHELD
all FOR all
Nominees Nominees NOMINEES: Patricia C. Barron
Item 1. Donald Beckman
Election |-----| |-----| Pemberton Hutchinson
of | | | | Joseph S. Gonnella
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" ITEM 2 AND ITEM 3.
Item 2. Amend Company's Certificate of FOR AGAINST ABSTAIN
Incorporation to increase number of |-----| |-----| |-----|
authorized shares of common stock from | | | | | |
50,000,000 to 100,000,000. |-----| |-----| |-----|
Item 3. Ratification of the appointment of
Price Waterhouse LLP as independent |-----| |-----| |-----|
public accountants for the Company for | | | | | |
the year 1998. |-----| |-----| |-----|
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 AND ITEM 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 MidCap 400 Index and S&P 500 Index
appears on page 6 of the Definitive Proxy Statement.
