Change in Control Agreement - Smith

Employment Agreement - Black

Severance Agreement

 

EX-10.1 2 exhibit1.htm EX-10.1

Exhibit 10.1

EXECUTIVE CHANGE IN CONTROL AGREEMENT

This Executive Change In Control Agreement (the “Agreement”) made as of the 15th day of December 2011, by and between Teleflex Incorporated (the “Company”) and Benson F. Smith (“Employee”).

WHEREAS, Employee is employed as an executive of the Company at its headquarters in Limerick, Pennsylvania; and

WHEREAS, the Board of Directors of the Company believes that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of Employee to the Company without distraction, notwithstanding that the Company could be subject to a Change of Control, and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of key management personnel to the detriment of the Company; and

WHEREAS, in consideration for Employee agreeing to continue in employment with the Company and agreeing to keep Company information confidential, the Company agrees that Employee shall receive the compensation set forth in this Agreement in the event Employee’s employment with the Company is terminated without Cause or Employee terminates employment for Good Reason, upon or after a Change of Control;

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements hereinafter set forth and intending to be legally bound hereby, the parties hereto agree as follows:

1. Definitions.

Base Salary” shall mean the highest annualized base rate of salary being paid to Employee in all capacities with the Company, together with any and all salary reduction authorized amounts under any of the Company’s benefit plans or programs, at the time of the Change of Control or any time thereafter.

Benefit Period” shall mean the period beginning on Employee’s Termination Date and ending on the first to occur of (a) the third anniversary of the Commencement Date or (b) the first date on which Employee is employed by another employer and is eligible to participate in a health plan of Employee’s new employer.

Board” shall mean the board of directors of the Company.

Bonus Plan” shall mean a plan of the Company providing for the payment of a cash bonus to Employee.

Cause” shall mean (a) misappropriation of funds, (b) conviction of a crime involving moral turpitude, or (c) gross negligence in the performance of duties, which gross negligence has had a material adverse effect on the business, operations, assets, properties or financial condition of the Company and its subsidiaries taken as a whole.

Commencement Date” shall mean the first day of the seventh month beginning after Employee’s Termination Date.

Change of Control” shall mean one of the following shall have taken place after the date of this Agreement:

(a) any “person” (as such term is used in Sections 13(d) or 14(d) of the Exchange Act) (other than the Company, any majority controlled subsidiary of the Company, or the fiduciaries of any Company benefit plans) becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of 20% or more of the total voting power of the voting securities of the Company then outstanding and entitled to vote generally in the election of directors of the Company; provided, however, that no Change of Control shall occur upon the acquisition of securities directly from the Company;

(b) individuals who, as of the beginning of any 24 month period, constitute the Board (as of the date hereof the “Incumbent Board”) cease for any reason during such 24 month period to constitute at least a majority of the Board, provided that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of the Company;

(c) consummation of (i) a merger, consolidation or reorganization of the Company, in each case, with respect to which all or substantially all of the individuals and entities who were the respective beneficial owners of the voting securities of the Company immediately prior to such merger, consolidation or reorganization do not, following such merger, consolidation or reorganization, beneficially own, directly or indirectly, at least 65% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the entity or entities resulting from such merger, consolidation or reorganization, (ii) a complete liquidation or dissolution of the Company or (iii) a sale or other disposition of all or substantially all of the assets of the Company, unless at least 65% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the entity or entities that acquire such assets are beneficially owned by individuals or entities who or that were beneficial owners of the voting securities of the Company immediately before such sale or other disposition; or

(d) consummation of any other transaction determined by resolution of the Board to constitute a Change of Control.

Code” means the Internal Revenue Code of 1986, as amended.

Component Target Amount” shall have the meaning specified therefor in the definition of “Target Bonus” in this Section 1.

Disability” shall mean Employee’s continuous illness, injury or incapacity for a period of six consecutive months.

Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

Good Reason” means a Termination of Employment initiated by Employee by Notice of Termination, in accordance with Section 2 hereof, upon one or more of the following occurrences; provided that as soon as practicable after Employee becomes aware of such occurrence and before such Notice of Termination is given, Employee shall have given notice of Good Reason to the Company and the Company shall not have fully corrected the situation within 10 days after such notice of Good Reason:

(a) any failure of the Company to comply with and satisfy any of the material terms of this Agreement;

(b) any significant reduction by the Company of the title, duties, job responsibilities, reporting relationship or position of Employee;

(c) any reduction in Employee’s Base Salary; or

(d) the moving of the principal office of the Company to which Employee is assigned to a location more than 25 miles from its location on the date of the Change of Control.

Performance Period” applicable to any Target Amount under a Bonus Plan shall mean the period of time in which the performance goals applicable to the determination of cash bonus awards pursuant to such Bonus Plan are measured.

Target Amount” in respect of a bonus payable to Employee pursuant to any Bonus Plan shall mean the amount specified in the Company’s records pertaining to such Bonus Plan as the “target amount” of cash bonus which would be payable to Employee if specified conditions were fulfilled.

Target Bonus” shall mean the sum of the Target Amounts (each a “Component Target Amount”) which would be payable in the year immediately following the Termination Year pursuant to all Bonus Plans if all of the conditions for the payment of each Component Target Amount were fulfilled, without regard to whether such conditions are actually fulfilled; provided that, if a Target Amount has not been determined for any such Bonus Plan on or before the Termination Date, the Target Amount for such Bonus Plan which would have been payable in the Termination Year shall be substituted for such undetermined Target Amount in the foregoing calculation of the “Target Bonus.”

Termination Date” shall mean the date of receipt of the Notice of Termination described in Section 2 hereof or any later date specified therein as the effective date of Employee’s Termination of Employment, as the case may be.

Termination of Employment” shall mean the termination of Employee’s active employment relationship with the Company. Employee’s Termination of Employment for all purposes under this Agreement will be determined to have occurred in accordance with the “separation from service” requirements of Code Section 409A and the Treasury Regulations and other guidance issued thereunder, and based on whether the facts and circumstances indicate that the Company and Employee reasonably anticipated that no further service would be performed after a certain date or that the level of bona fide services Employee would perform after such date (as an employee or as an independent contractor) would permanently decrease to no more than 20 percent of the average level of bona fide services performed over the immediately proceeding 36-month period (or actual period of service, if less).

Termination following a Change of Control” shall mean a Termination of Employment upon or within two years after a Change of Control either:

(a) initiated by the Company for any reason other than Disability or Cause; or

(b) initiated by Employee for Good Reason.

Termination Year” shall mean the year in which Employee’s Termination Date occurs.

2. Notice of Termination. Any Termination of Employment shall be communicated by a Notice of Termination to the other party hereto given in accordance with Section 14 hereof. For purposes of this Agreement, a “Notice of Termination” means a written notice which (a) indicates the specific reasons for the termination, (b) briefly summarizes the facts and circumstances deemed to provide a basis for termination of Employee’s employment, and (c) if the Termination Date is other than the date of receipt of such notice, specifies the Termination Date (which date shall not be more than 15 days after the giving of such notice).

3. Compensation upon Termination following a Change of Control. Subject to the provisions of subsection (g) below and Sections 4, 5 and 6 hereof, in the event of Employee’s Termination following a Change of Control, Employee shall be entitled to receive the following payments and benefits from the Company:

(a) Within 15 days after the Termination Date, Employee shall receive a lump sum cash payment equal to Employee’s unpaid base salary earned through the Termination Date.

(b) If a bonus awarded to Employee pursuant to any Bonus Plan for payment in the Termination Year shall not have been paid to Employee, Employee shall receive the amount of such award within 15 days after the Termination Date. If no such bonus shall have been awarded to Employee under any Bonus Plan, on the Commencement Date Employee shall receive a lump sum cash payment in the amount of the sum of the Target Amounts under each such Bonus Plan referred to in the immediately preceding sentence which would have been payable to Employee in the Termination Year.

(c) On the Commencement Date, Employee shall receive a lump sum cash payment equal to the sum of (i) a pro-rated amount of the Target Bonus, (ii) the amount (if any) paid by Employee for health care continuation coverage (COBRA) for the period from the Termination Date to the date of such lump sum payment and (iii) in the event the Employee was a participant in such plan prior to the Termination Date, the Employer Non-Elective Contributions with which Employee would have been credited under the Teleflex Incorporated Deferred Compensation Plan (“Deferred Compensation Plan”) for each of the next three (3) plan years following the plan year which includes the Termination Date, assuming that Employee’s Compensation and Bonus, as those terms are defined in the Deferred Compensation Plan, for each of the three (3) plan years immediately following the plan year which includes the Termination Date are the same as Employee’s Compensation and Bonus for the plan year which includes the Termination Date. The pro-rated Target Bonus shall be computed by multiplying the Target Bonus by a fraction (i) the numerator of which is the number of days in each year of the Performance Period applicable to such Component Target Amount reduced by the number of days in the Termination Year following the Termination Date and (ii) the denominator of which is the number of days in the Performance Period.

(d) Beginning with the Commencement Date, Employee shall receive the following:

(i) Employee shall receive an amount equal to three times Employee’s Base Salary (the “Base Salary Severance Amount”), which shall be divided into 36 equal monthly installments and paid as follows: (A) on the Commencement Date an amount equal to the first seven monthly installments and (B) an additional monthly installment on the first day of each month thereafter for the next twenty-nine months. However, if the Change of Control does not satisfy the requirements to be a ‘change in control’ for purposes of Code Section 409A and the Treasury Regulations and other guidance issued thereunder, then, if necessary to satisfy Code Section 409A, the Base Salary Severance Amount shall be divided into 36 equal monthly installments and paid as follows: (A) on the Commencement Date an amount equal to the first seven monthly installments and (B) an additional monthly installment on the first day of each month thereafter until all of the installments have been paid.

(ii) Employee shall receive an amount equal to the Target Bonus on each of the six-month, eighteen-month and thirty-month anniversaries of the Commencement Date. The amount paid on each such date shall be paid in the form of a single lump sum cash payment.

(iii) The Company shall continue to provide health and dental benefits under the Company’s then-current health and dental plans for Employee and Employee’s spouse and eligible dependents during the balance of the Benefit Period on the same basis as if Employee had continued to be employed during that period. If the continuation of coverage under the Company’s health and dental plans for Employee and Employee’s spouse and eligible dependents results in a violation of Section 105(h) of the Code, the continuation of coverage will be on an after-tax basis with the portion of the monthly cost of coverage paid by the Company being additional taxable income. If the continuation of coverage under the Company’s health and dental plans will be on an after-tax basis, the Company will pay Employee a lump sum cash payment on the last day of each applicable month during the Benefit Period (or balance thereof) so that Employee will be in the same position as if the continuation of coverage could have been provided on a pre-tax basis. The COBRA health care continuation coverage period under Section 4980B of the Code shall begin at the end of the Health Care Continuation Period. Notwithstanding the preceding, if Employee and Employee’s spouse and eligible dependents are not eligible to continue coverage under the Company’s health and/or dental plan(s), the Company will reimburse Employee in cash on the last day of each month during the Benefit Period (or balance thereof) an amount based on the cost actually paid by Employee for that month to maintain health and/or dental insurance coverage from commercial sources that is comparable to the health and/or dental coverage Employee last elected as an employee for Employee and Employee’s spouse and eligible dependents under the Company’s health and/or dental plan(s) covering Employee, where the net monthly reimbursement after taxes are withheld will equal the Company’s portion of the cost paid by Employee for that month’s coverage determined in accordance with the Company’s policy then in effect for employee cost sharing, on substantially the same terms as would be applicable to an executive officer of the Company.

(iv) The Company shall reimburse Employee for the cost of outplacement assistance services incurred by Employee up to a maximum of $20,000, which shall be provided by an outplacement agency selected by Employee. The Company shall reimburse Employee within 15 days following the date on which the Company receives proof of payment of such expense, which proof must be submitted no later than December 1st of the calendar year after the calendar year in which the expense was incurred. Notwithstanding the foregoing, Executive shall only be entitled to reimbursement for those outplacement service costs incurred by Executive on or prior to the last day of the second year following the Termination Year.

(e) If Employee was provided with the use of an automobile as of the Termination Date, Employee may continue to use such automobile during the Benefit Period. If Employee received a cash vehicle allowance as of the Termination Date, the Company shall pay Employee a cash vehicle allowance during the Benefit Period equal to what it would cost Employee to lease the vehicle utilized by Employee immediately prior to the Termination Date, calculated by assuming that the lease is a three (3) year closed-end lease. The allowance shall generally be paid in equal monthly payments; provided, however, that payment of the monthly payments shall not begin until the Commencement Date. On the Commencement Date, Employee shall receive a lump sum cash payment equal to the sum of the monthly payments that would have been paid between the Termination Date and Commencement Date plus the monthly payment for the month in which the Commencement Date occurs. The Company will pay the remaining monthly payments on the first day of each month following the Commencement Date.

(f) All Company stock options and restricted stock held by Employee as of Employee’s Termination Date that have not previously become vested and exercisable shall immediately become fully vested and exercisable as of the date immediately preceding the Termination Date, and any stock option or restricted stock awards under which such stock options or restricted stock are granted are hereby amended, effective the later of the date of this Agreement or the date of such award, to so provide.

(g) As a condition to the obligation of the Company to pay compensation and provide benefits under this Agreement, the Company shall have received from Employee immediately following the Termination Date a written waiver and release of claims against the Company substantially in the form attached hereto as Exhibit A (but subject to any necessary adjustments reasonably determined by the Company to be necessary to comply with applicable laws and regulations in effect as of Employee’s Termination Date) executed by Employee (the “Release”), and Employee shall not thereafter revoke the Release. If Employee fails to execute or revokes the Release, no payments or benefits shall thereafter be made or provided to Employee pursuant to this Agreement.

(h) Taxable Benefits. Any taxable welfare benefits provided pursuant to this Section 3 that are not “disability pay” or “death benefits” within the meaning of Treasury Regulations Section 1.409A-1(a)(5) (collectively, the “Applicable Benefits”) shall be subject to the following requirements in order to comply with Code Section 409A. The amount of any Applicable Benefit provided during one taxable year shall not affect the amount of the Applicable Benefit provided in any other taxable year, except that with respect to any Applicable Benefit that consists of the reimbursement of expenses referred to in Code Section 105(b), a limitation may be imposed on the amount of such reimbursements over some or all of the applicable Benefit Period, as described in Treasury Regulations Section 1.409A-3(i)(iv)(B). To the extent that any Applicable Benefit consists of the reimbursement of eligible expenses, such reimbursement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred. No Applicable Benefit may be liquidated or exchanged for another benefit. If Employee is a “specified employee”, as defined in Code Section 409A, then during the period of six months immediately following Employee’s Termination of Employment, Employee shall be obligated to pay the Company the full cost for any Applicable Benefits that do not constitute health benefits of the type required to be provided under the health continuation coverage requirements of Code Section 4980B, and the Company shall reimburse Employee for any such payments on the first business day that is more than six months after the Termination Date.

4. Limitations on Certain Payments.

(a) Notwithstanding anything in this Agreement to the contrary, if a Change of Control occurs and it is determined that any payment or distribution by the Company to or for the benefit of Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”), would constitute an “excess parachute payment” within the meaning of Section 280G of the Code, then, if the aggregate present value of such Payments exceeds 2.99 times Employee’s “base amount,” as defined in Section 280G(b)(3) of the Code (the “Base Amount”), the amounts constituting “parachute payments” which would otherwise be payable to or for the benefit of Employee shall be reduced to the extent necessary so that such “parachute payments” are equal to 2.99 times the Base Amount (the “Reduced Amount”); provided that such amounts shall not be so reduced if the Employee determines, based upon the advice of the Accounting Firm (as defined below), that without such reduction Employee would be entitled to receive and retain, on a net after tax basis (including, without limitation, any excise taxes payable under Section 4999 of the Code), an amount which is greater than the amount, on a net after tax basis, that the Employee would be entitled to retain upon his receipt of the Reduced Amount.

(b) If the determination made pursuant to Section 4(a) results in a reduction of the Payments that would otherwise be paid to Employee except for the application of Section 4(a), then the reduction shall occur in the following order: reduction of cash payments; cancellation of accelerated vesting of equity-based awards (if applicable); reduction of employee benefits. In the event that acceleration of vesting of equity-based awards is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of Employee’s equity-based award.

(c) All determinations to be made under this Section 4 shall be made by the Company’s independent public accountants immediately prior to the Change of Control or by another independent public accounting firm mutually selected by the Company and Employee before the date of the Change of Control (the “Accounting Firm”), which firm shall provide its determinations and any supporting calculations both to the Company and Employee within 20 days after the Termination Date. Any such determination by the Accounting Firm shall be binding upon the Company and Employee.

(d) All of the fees and expenses of the Accounting Firm in performing the determinations referred to in this Section 4 shall be borne solely by the Company. The Company agrees to indemnify and hold harmless the Accounting Firm from any and all claims, damages and expenses resulting from or relating to its determinations pursuant to this Section 4, except for claims, damages or expenses resulting from the gross negligence or willful misconduct of the Accounting Firm.

(e) As a result of the uncertainty in the application of Section 280G of the Code at the time of a determination hereunder, it is possible that payments will be made by the Company which should not have been made under this Section 4 (“Overpayment”) or that additional payments which are not made by the Company under this Section 4 should have been made (“Underpayment”). In the event that there is a final determination by the Internal Revenue Service, or a final determination by a court of competent jurisdiction, that an Overpayment has been made, any such Overpayment shall be treated for all purposes as a loan to Employee, which Employee shall repay to the Company together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code. In the event that there is a final determination by the Internal Revenue Service, a final determination by a court of competent jurisdiction or a change in the provisions of the Code or regulations pursuant to which an Underpayment arises under this Agreement, any such Underpayment shall be promptly paid by the Company to or for the benefit of Employee, together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code.

5. Confidential Information. Employee recognizes and acknowledges that, by reason of Employee’s employment by and service to the Company, Employee has had and will continue to have access to confidential information of the Company and its affiliates, including, without limitation, information and knowledge pertaining to products and services offered, innovations, designs, ideas, plans, trade secrets, proprietary information, distribution and sales methods and systems, sales and profit figures, customer and client lists, and relationships between the Company and its affiliates and other distributors, customers, clients, suppliers and others who have business dealings with the Company and its affiliates (“Confidential Information”). Employee acknowledges that such Confidential Information is a valuable and unique asset of the Company, and Employee covenants that Employee will not, either during or after Employee’s employment by the Company, disclose any such Confidential Information to any person for any reason whatsoever without the prior written authorization of the Company, unless such information is in the public domain through no fault of Employee or except as may be required by law or in a judicial or administrative proceeding. Notwithstanding anything to the contrary herein, each of the parties hereto (and each employee, representative, or other agent of such parties) may disclose to any person, without limitation of any kind, the federal income tax treatment and federal income tax structure of the transactions contemplated hereby and all materials (including opinions or other tax analyses) that are provided to such party relating to such tax treatment and tax structure.

6. Equitable Relief.

(a) Employee acknowledges that the restrictions contained in Section 5 hereof are reasonable and necessary to protect the legitimate interests of the Company and its affiliates, that the Company would not have entered into this Agreement in the absence of such restrictions, and that any violation of any provision of that Section will result in irreparable injury to the Company. Employee represents and acknowledges that (i) Employee has been advised by the Company to consult Employee’s own legal counsel in respect of this Agreement, and (ii) Employee has had full opportunity, prior to execution of this Agreement, to review thoroughly this Agreement with Employee’s counsel.

(b) Employee agrees that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of Section 5 hereof, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled. Without limiting the foregoing, Employee also agrees that payment of the compensation and benefits payable under Section 3 of this Agreement may be automatically ceased in the event of a material breach of the covenants of Section 5, provided the Company gives Employee written notice of such breach, detailing the activity of Employee that constitutes a material breach, and Employee fails to cease such activity within 15 days after Employee’s receipt of such written notice. In the event that any of the provisions of Section 5 hereof should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, service, or other limitations permitted by applicable law.

(c) Employee irrevocably and unconditionally (i) agrees that any suit, action or other legal proceeding arising out of Section 5 hereof, including without limitation, any action commenced by the Company for preliminary and permanent injunctive relief or other equitable relief, may be brought in a United States District Court in Pennsylvania, or if such court does not have jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in or around Philadelphia, Pennsylvania, (ii) consents to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding, and (iii) waives any objection which Employee may have to the laying of venue of any such suit, action or proceeding in any such court. Employee also irrevocably and unconditionally consents to the service of any process, pleadings, notices or other papers in a manner permitted by the notice provisions of Section 14 hereof.

7. Other Payments and Indemnification. The payments due under Section 3 hereof shall be in addition to and not in lieu of any payments or benefits due to Employee under any other plan, policy or program of the Company except as provided under Section 16(a) and except that no cash payments shall be paid to Employee under any severance plan of the Company that are due and payable solely as a result of a Change of Control. In addition, Employee shall continue to be covered by any policy of insurance providing indemnification rights for service as an officer and director of the Company and to all other rights to indemnification provided by the Company, in each case at least as favorable as applicable to Employee on the date of this Agreement.

8. Enforcement. It is the intent of the parties that Employee not be required to incur any expenses associated with the enforcement of Employee’s rights under this Agreement by arbitration, litigation or other legal action, because the cost and expense thereof would substantially detract from the benefits intended to be extended to Employee hereunder. Accordingly, the Company shall pay Employee on demand the amount necessary to reimburse Employee in full for all expenses (including all attorneys’ fees and legal expenses) incurred by Employee in attempting to enforce any of the obligations of the Company under this Agreement, without regard to outcome, unless the lawsuit brought by Employee is determined to be frivolous by a court of final jurisdiction. The Company shall reimburse Employee for expenses under this Section 8 no later than the end of the calendar year next following the calendar year in which such expenses were incurred, it being understood that the foregoing limitation is intended to ensure compliance with Code Section 409A, and shall not serve to extend or otherwise delay the time period within which the Company is required to reimburse Employee for expenses as set forth in this Section 8. The Company shall not be obligated to pay any such expenses for which Employee fails to make a demand and submit an invoice or other documented reimbursement request at least 10 business days before the end of the calendar year next following the calendar year in which such expenses were incurred. The amount of such expenses that the Company is obligated to pay in any given calendar year shall not affect the expenses that the Company is obligated to pay in any other calendar year. Employee’s right to have the Company pay the expenses may not be liquidated or exchanged for any other benefit.

9. No Mitigation. Employee shall not be required to mitigate the amount of any payment or benefit provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for herein be reduced by any compensation earned by other employment or otherwise.

10. No Set-Off. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company may have against Employee or others.

11. Taxes. Any payments required under this Agreement shall be subject to applicable tax withholding.

12. Term of Agreement. The term of this Agreement shall be for three years from the date hereof and shall be automatically renewed for successive one-year periods unless the Company notifies Employee in writing that this Agreement will not be renewed at least 60 days prior to the end of the current term; provided, however, that (i) this Agreement shall remain in effect for at least two years after a Change of Control occurring during the term of this Agreement and shall remain in effect until all of the obligations of the parties hereunder are satisfied, and (ii) this Agreement shall terminate if, prior to but not in contemplation of a Change of Control, the employment of Employee with the Company and its affiliates shall terminate for any reason.

13. Successor Company. The Company shall require any successor or successors (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, by agreement in form and substance satisfactory to Employee, to acknowledge expressly that this Agreement is binding upon and enforceable against the Company in accordance with the terms hereof, and to become jointly and severally obligated with the Company to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession or successions had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement. As used in this Agreement, the Company shall mean the Company as herein before defined and any such successor or successors to its business or assets, jointly and severally.

14. Notice. All notices and other communications required or permitted hereunder or necessary or convenient in connection herewith shall be in writing and shall be delivered personally or mailed by registered or certified mail, return receipt requested, or by overnight express courier service, as follows:

If to the Company, to:

Teleflex Incorporated

155 South Limerick Road

Limerick, PA 19468

Attn: General Counsel

If to Employee, to:

Benson F. Smith

[Intentionally omitted]

[Intentionally omitted]

or to such other names or addresses as the Company or Employee, as the case may be, shall designate by notice to the other party hereto in the manner specified in this Section; provided, however, that if no such notice is given by the Company following a Change of Control, notice at the last address of the Company or to any successor pursuant to Section 14 hereof shall be deemed sufficient for the purposes hereof. Any such notice shall be deemed delivered and effective when received in the case of personal delivery, five days after deposit, postage prepaid, with the U.S. Postal Service in the case of registered or certified mail, or on the next business day in the case of overnight express courier service.

15. Residence; Governing Law. Executive hereby represents and warrants to the Company that, as of the date of this Agreement, Executive is a resident of the Commonwealth of Pennsylvania. This Agreement shall be governed by and interpreted under the laws of the Commonwealth of Pennsylvania without giving effect to any conflict of laws provisions.

16. Contents of Agreement, Amendment and Assignment.

(a) This Agreement supersedes all prior agreements, sets forth the entire understanding between the parties hereto with respect to the subject matter hereof and cannot be changed, modified, extended or terminated except upon written amendment executed by Employee and approved by the Board and executed on the Company’s behalf by a duly authorized officer; provided, however, that except as stated in Section 7 above, this Agreement is not intended to supersede or alter Employee’s rights under any compensation, benefit plan or program, unless specifically modified hereunder, in which Employee participated and under which Employee retains a right to benefits. The provisions of this Agreement may provide for payments to Employee under certain compensation or bonus plans under circumstances where such plans would not provide for payment thereof. It is the specific intention of the parties that the provisions of this Agreement shall supersede any provisions to the contrary in such plans, to the extent that the provisions of this Agreement are more favorable to Employee than the terms of such plans, and such plans shall be deemed to have been amended to correspond with this Agreement without further action by the Company or the Board.

(b) Nothing in this Agreement shall be construed as giving Employee any right to be retained in the employ of the Company.

(c) All of the terms and provisions of this Agreement, including the covenants of Section 5, shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, representatives, successors and assigns of the parties hereto.

(d) It is the Parties’ intention that the benefits and rights to which Employee could become entitled in connection with Termination of Employment comply with Code Section 409A. If Employee or the Company believes, at any time, that any of such benefits or rights do not so comply, he or it shall promptly advise the other party and shall negotiate reasonably and in good faith to amend the terms of this Agreement such that it complies (with the most limited economic effect on Employee and the Company).

17. Severability. If any provision of this Agreement or application thereof to anyone or under any circumstances shall be determined to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions or applications of this Agreement which can be given effect without the invalid or unenforceable provision or application.

18. Remedies Cumulative; No Waiver. No right conferred upon Employee by this Agreement is intended to be exclusive of any other right or remedy, and each and every such right or remedy shall be cumulative and shall be in addition to any other right or remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by Employee in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, including, without limitation, any delay by Employee in delivering a Notice of Termination pursuant to Section 2 hereof after an event has occurred which would, if Employee had resigned, have constituted a Termination following a Change of Control pursuant to Section 1 of this Agreement.

19. Miscellaneous. All section headings are for convenience only. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts.

20. Construction. The word “including” means “including without limitation.”

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Agreement as of the date first above written in Limerick, Pennsylvania.

Teleflex Incorporated

By: /s/ Laurence G. Miller
Name: Laurence G. Miller
Title: Executive Vice President,
Chief Administrative Officer,
General Counsel and Secretary



/s/ Benson F. Smith
Benson F. Smith

 

Exhibit 10.1  4/1/2009 8-K

EMPLOYMENT AGREEMENT

THIS is an EMPLOYMENT AGREEMENT, made as of March 26, 2009 (the “Effective Date”), between TELEFLEX INCORPORATED (the “Company”) and JEFFREY P. BLACK (“Executive”).

Background

A. Executive is employed by the Company as the Company’s Chairman and Chief Executive Officer.

B. The purpose of this Agreement is to set forth the terms and conditions of Executive’s employment and, in particular, to provide for certain severance compensation and benefits to be paid or provided to Executive in the event of the termination of his employment under circumstances specified herein, to provide for certain commitments by Executive, and to supersede and replace the Employment Agreement (the “Prior Agreement”) dated as of May 5, 2006 and amended as of January 1, 2009 between the Company and Executive.

Terms

THE PARTIES, in consideration of the mutual covenants hereinafter set forth, and intending to be legally bound hereby, agree as follows:

1.   Definitions. The following terms used in this Agreement with initial capital letters have the respective meanings specified therefor in this Section.

Affiliate” of any Person means (i) any other Person that controls, is controlled by or is under common control with the first mentioned Person, or (ii) any Person that, together with the Company, would be treated as a single employer with the Company under Section 414(b),(c), (m) or (o) of the Code.

Agreementpreceded by the word “this” means this Employment Agreement, as amended at any relevant time.

Base Salary” of Executive means the highest annualized base rate of salary paid to Executive within 24 months preceding the Termination Date, including any and all authorized salary reduction amounts under any of the Company’s benefit plans or programs; provided, however, that in the event of a Termination Following a Change of Control, Base Salary means the highest annualized base rate of salary being paid to Executive in all capacities with the Company, including any and all authorized salary reduction amounts under any of the Company’s benefit plans or programs, at the time of the Change of Control or any time thereafter.

Board” has the meaning specified therefor in Section 4(a).

Bonus Plan” means any Plan providing for the payment of incentive cash compensation to Executive.

Cause” means (a) misappropriation of funds, (b) conviction of a crime involving moral turpitude, or (c) gross negligence in the performance of duties, which gross negligence has had a material adverse effect on the business, operations, assets, properties or financial condition of the Company and its subsidiaries taken as a whole.

Change of Control” shall mean one of the following shall have taken place after the date of this Agreement:

(a)   any “person” (as such term is used in Sections 13(d) or 14(d) of the Exchange Act) (other than the Company, any majority controlled subsidiary of the Company, or the fiduciaries of any Company benefit plans) becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of 20% or more of the total voting power of the voting securities of the Company then outstanding and entitled to vote generally in the election of directors of the Company; provided, however, that no Change of Control shall occur upon the acquisition of securities directly from the Company;

(b)   individuals who, as of the beginning of any 24 month period, constitute the Board (as of the date hereof the “Incumbent Board”) cease for any reason during such 24 month period to constitute at least a majority of the Board, provided that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of the Company;

(c)   consummation of (i) a merger, consolidation or reorganization of the Company, in each case, with respect to which all or substantially all of the individuals and entities who were the respective beneficial owners of the voting securities of the Company immediately prior to such merger, consolidation or reorganization do not, following such merger, consolidation or reorganization, beneficially own, directly or indirectly, at least 65% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the entity or entities resulting from such merger, consolidation or reorganization, (ii) a complete liquidation or dissolution of the Company, or (iii) a sale or other disposition of all or substantially all of the assets of the Company, unless at least 65% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the entity or entities that acquire such assets are beneficially owned by individuals or entities who or that were beneficial owners of the voting securities of the Company immediately before such sale or other disposition; or

(d)   consummation of any other transaction determined by resolution of the Board to constitute a Change in Control.

Code” means the Internal Revenue Code of 1986, as amended.

Commencement Date” with respect to the commencement of any compensation or provision of benefits pursuant to this Agreement means the first day of the seventh month beginning after the Termination Date.

Confidential Information” has the meaning specified therefor in Section 17.

Disability” means Executive’s continuous illness, injury or incapacity for a period of six consecutive months.

Employment” means substantially full time employment of Executive by the Company or any of its Affiliates.

Equity Compensation Plan” means a Plan providing for the grant, award or payment to participants of compensation in the form of (i) interests in or rights to acquire equity securities of the Company or derivative securities relating to equity securities of the Company or (ii) cash payments in amounts equal to the value or increase in value of equity securities of the Company, including the 2000 Stock Compensation Plan of the Company or the 2008 Stock Incentive Plan of the Company, as such Plan may be amended from time to time and any similar Plan or Plans in effect at any relevant time.

Good Reason” means the occurrence of one or more of the following actions, to which Executive objects in writing to the Board within five days following initial notification of its occurrence or proposed occurrence, and which action is not then rescinded within 30 days after delivery of such notice:

(a)   A change of the principal office or work place assigned to Executive to a location more than 25 miles distant from its location immediately prior to such change.

(b)   A material reduction by the Company of the executive title, duties, responsibilities, authority, status, reporting relationship or executive position of Executive; provided that if the Company sells or otherwise disposes of any part of its business or assets or otherwise diminishes or changes the character of its business, the change in the magnitude or character of the Company’s business resulting therefrom will not itself be deemed to be a reduction of Executive’s responsibilities, authority or status within the meaning of this clause (b).

(c)   A reduction of Executive’s base salary (as set forth in Section 5(a) hereof (taking into consideration any upward adjustment)).

Insurance Benefits Period” means the 36-month period commencing on the Termination Date.

Long Term Incentive Award” or “LTI Award” means an award under the Teleflex Incorporated Executive Incentive Plan to employees of the Company of compensation in the form of cash and/or equity securities of the Company, the payment of which awards are conditioned upon the fulfillment of specified or determinable performance goals during specified multi-year Performance Periods, or if such Plan shall be discontinued, a multi-year award under any similar Plan or Plans in effect at any relevant time.

Notice of Termination” has the meaning specified therefor in Section 10.

Performance Period” applicable to any compensation payable (in cash or other property) under any Plan, the amount or value of which is determined by reference to the performance of participants or the Company or the fulfillment of specified conditions or goals, means the period of time of such performance is measured or the period of time in which such conditions or performance goals must be fulfilled.

Person” means an individual, a corporation or other entity or a government or governmental agency or institution.

Plan” means a plan of the Company for the payment of compensation or provision of benefits to employees in which plan Executive is or was, at all times relevant to the provisions of this Agreement, a participant or eligible to participate.

Prorated Amount” has the meaning specified therefor in Section 11(e).

Release” has the meaning specified therefor in Section 16.

Severance Compensation Period” means the 36 month period commencing on the day after the Termination Date.

Target Award” in respect of a bonus payable in cash to Executive pursuant to any Bonus Plan means the amount specified in or determinable from the Company’s records pertaining to such Bonus Plan as the “target award” which would be payable to Executive as such bonus if specified conditions for a 100% award were fulfilled but not exceeded, without regard to whether such conditions are actually fulfilled.

Termination Date” means the date specified in a Notice of Termination complying with the provisions of Section 10, as such Notice of Termination may be amended by mutual consent of the parties, which date shall be the date the Executive’s Termination of Employment occurs.

Termination of Employment” means a cessation of Employment which occurs prior to Executive’s attaining the age of 62 years, other than such a cessation occurring by reason of Executive’s death or Disability. Executive’s Termination of Employment for all purposes under this Agreement will be determined to have occurred in accordance with the ‘separation from service’ requirements of Code Section 409A and the Treasury Regulations and other guidance issued thereunder, and based on whether the facts and circumstances indicate that the Company and Executive reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Executive would perform after such date (as an employee or as an independent contractor) would permanently decrease to no more than 20 percent of the average level of bona fide services performed over the immediately preceding 36-month period.

Termination Following a Change of Control” means a Termination of Employment (regardless of the age of Executive) upon or within two years after a Change of Control either:

(a)   initiated by the Company for any reason other than Disability or Cause; or

(b)   initiated by Executive for Good Reason.

Year of Termination” means the Year in which Executive’s Termination Date occurs.

Year” means a fiscal year of the Company.

2.   Term. This Agreement shall terminate on the third anniversary of the Effective Date hereof; provided, however, that this Agreement shall remain in effect for at least two years after a Change of Control occurring during the term of this Agreement and shall remain in effect until all of the obligations of the parties hereunder are satisfied. The parties agree to consider and negotiate in good faith towards entering into a successor agreement upon the termination of such term, provided that neither party shall have any obligation to enter into any such agreement.

3.   Continued Employment of Executive. The parties acknowledge that Executive’s employment by the Company is at will and, except as the parties may hereafter agree in writing, such employment may be terminated by either party at any time, subject only to the giving of prior notice pursuant to Section 10. Nothing in this Agreement shall be construed as giving Executive any right to continue in the employ of the Company.

4.   Employment.

(a)   Duties. Executive shall serve as the President and Chief Executive Officer of the Company with the duties, responsibilities and authority commensurate therewith and shall report to the Board of Directors of the Company (the “Board”). Executive shall use his best efforts to perform all duties and accept all responsibilities incident to such position as may be reasonably assigned to him by the Board and consistent with his position as the President and Chief Executive Officer.

(b)   Best Efforts. During the term of this Agreement, Executive shall devote his best efforts and full business time and attention to promote the business and affairs of the Company and its Affiliates, and shall be engaged in other business activities only to the extent that such activities do not materially interfere or conflict with his obligations to the Company hereunder. The foregoing also shall not be construed as preventing Executive from (1) serving on civic, educational, philanthropic or charitable boards or committees, or, with the prior written consent of the Board, in its sole discretion, on other corporate boards, (2) delivering lectures, fulfilling speaking engagements or lecturing at educational institutions, and (3) managing personal investments, so long as such activities do not significantly interfere with the performance of the Executive’s responsibilities hereunder.

5.   Base Salary and Incentive Compensation.

(a)   As compensation for the services to be rendered hereunder, the Company shall pay to Executive a base salary at the annual rate of $900,000. This amount may be subject to an upward adjustment at the beginning of each Year, as determined by the Board, in its sole discretion. Executive’s base salary shall be paid in accordance with the Company’s existing payroll policies, and shall be subject to all applicable withholding taxes.

(b)   Executive shall be eligible to participate in annual and long-term incentive compensation programs provided by the Company for its senior executives, as determined and on the terms established from time to time by the Compensation Committee (the “Committee”) of the Board, in its sole discretion.

6.   Equity Compensation. Executive shall be eligible to participate in equity compensation programs provided by the Company for its senior executives, as determined and on the terms established from time to time by the Committee, in its sole discretion.

7.   Retirement and Welfare Benefits; Perquisites. Executive shall be entitled to participate in the Company’s retirement and welfare employee benefit plans and programs, if any, pursuant to their respective terms and conditions. Nothing in this Agreement shall preclude the Company from terminating or amending any employee benefit plan or program from time to time. In addition, the Company will reimburse Executive for premiums for $1 million of life insurance coverage under an individual policy owned by Executive. Finally, Executive shall be entitled annually to personal use of the Company aircraft for the lesser of (i) 50 hours of flight time or (ii) $100,000 in incremental, variable costs to the Company (as calculated in accordance with the disclosure rules of the Securities and Exchange Commission). The reimbursements and in-kind benefits set forth in the prior two sentences shall be provided for expenses and services incurred during the term of this Agreement, and the amount of expenses eligible for reimbursement, or in-kind benefits provided, during one calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year. All reimbursements under this provision shall be made no later than the last day of the calendar year following the calendar year in which the expense was incurred, and all requests for reimbursement must be made by the Executive no later than 15 days before that date in order to be eligible for reimbursement hereunder. The Executive’s right to have the Company pay such expenses or provide such in-kind benefits may not be liquidated or exchanged for any other benefit.

8.   Vacation. Executive shall be entitled to vacation, and holiday and sick leave at levels commensurate with those provided to other senior executive officers of the Company, in accordance with the Company’s vacation, holiday and other similar polices as in effect from time to time for senior executives.

9.   Expenses. The Company shall reimburse Executive for all necessary and reasonable travel and other business expenses incurred by Executive in the performance of his duties hereunder in accordance with such reasonable accounting procedures as the Company may adopt generally from time to time for executives. All reimbursements under this provision shall be for expenses incurred during the term of this Agreement and shall be made no later than the last day of the calendar year following the calendar year in which the expense was incurred; all requests for reimbursement must be made by the Executive no later than 15 days before that date in order to be eligible for reimbursement hereunder. The amount of such expenses that the Company is obligated to pay in any given calendar year shall not affect the expenses that the Company is obligated to pay in any other calendar year, and the Executive’s right to have the Company pay such expenses may not be liquidated or exchanged for any other benefit.

10.   Notice of Termination of Employment. The party initiating any Termination of Employment shall give notice thereof to the other party (a “Notice of Termination”). A Notice of Termination shall (i) state with reasonable particularity the reasons for such Termination of Employment, if any, which are relevant to Executive’s right to receive compensation and benefits pursuant to this Agreement and (ii) specify the date such Termination of Employment shall become effective which, without the consent of such other party, shall not be later than 15 days after the date of such Notice of Termination, except in the event of a Termination of Employment initiated by the Company with Cause (in which case no advance notice shall be required).

11.   Compensation upon Termination of Employment. Subject to the terms of Sections 16-19, upon Termination of Employment (i) by the Company other than for Cause or (ii) by Executive within two months after the expiration of the period for rescission of an action that, absent such rescission, would constitute Good Reason, Executive will receive from the Company the following payments and benefits:

(a)   Unpaid Salary. Within 15 days after the Termination Date, Executive shall receive a lump sum cash payment equal to Executive’s unpaid base salary, if any, earned through the Termination Date.

(b)   Cash Bonuses for Years Preceding the Year of Termination. If any cash award pursuant to a Bonus Plan in respect of a Performance Period which ended before the Year of Termination shall not have been paid to Executive on or before the Termination Date, the Company will pay Executive, within 15 days after the Termination Date, such award in the amount of Executive’s award earned for the Performance Period; provided, however, that if any such Bonus Plan requires, as a condition to eligibility for payment, that a participant be employed by the Company on the date payment is made, then payment of the award under such Bonus Plan for the Performance Period ended before the Year of Termination shall be made on the Commencement Date.

(c)   Continuation of Base Salary. As consideration for the obligations of Executive under Sections 17 and 18, the Company will pay Executive (i) on the Commencement Date an amount equal to seven-twelfths of Executive’s Base Salary, and (ii) each month thereafter during the Severance Compensation Period an amount equal to one-twelfth of Executive’s Base Salary.

(d)   Additional Severance. As consideration for the obligations of Executive under Sections 17 and 18, on March 15 of each of the first three Years immediately following the Termination Date the Company will pay Executive an amount equal to 100% of Executive’s Base Salary; provided that if the foregoing date for the first such annual payment occurs before the Commencement Date, such first annual payment will be paid on the Commencement Date.

(e)   Payment of Cash-Based LTI Awards for Performance Periods Not Completed Before the Termination Date. On the later of the Commencement Date or the date that is 2 1/2 months following the end of the relevant Performance Period, the Company will pay Executive the Prorated Amount of the cash portion of Executive’s LTI Award for the Performance Period, if any, which is scheduled to end on the last day of the Year of Termination. The amount of any such cash-based award, from which the Prorated Amount is derived, shall be determined based on the degree to which each performance goal on which such award is based has been satisfied prior to the Termination Date, as determined in the discretion of the Committee. The “Prorated Amount” of Executive’s award in respect of such Performance Period means an amount equal to the portion of such cash-based award which bears the same ratio to the amount of such award as the portion of such Performance Period that expired immediately before the Termination Date bears to the entire period of such Performance Period. Notwithstanding the foregoing, in the event that Executive’s Termination of Employment occurs after December 31, 2009, then Executive shall not be entitled to any of the amounts set forth in this Subsection.

(f)   Health Insurance. Subject to the provisions of the last sentence of this Subsection, during the Severance Compensation Period, the Company will reimburse Executive in cash monthly in an amount equal to Executive’s after-tax cost actually incurred by Executive to maintain health insurance coverage from commercial sources that is comparable to the health care coverage Executive last elected as an employee for himself, his spouse and dependents under the Company’s health care plan covering Executive. The aggregate premium cost of providing such insurance will be borne by the Company and Executive in accordance with the Company’s policy then in effect for employee participation in premiums, on substantially the same terms as would be applicable to an executive officer of the Company. All reimbursements under this provision shall be made no later than the last day of the calendar year following the calendar year in which the expense was incurred, and all requests for reimbursement must be made by the Executive no later than 15 days before that date in order to be eligible for reimbursement hereunder. Notwithstanding the foregoing, the COBRA health care continuation coverage (“COBRA Coverage”) period under Section 4980B of the Code shall begin on the Termination Date and continue to run concurrently with the Severance Compensation Period, and the Company shall pay the same portion of the cost of COBRA Coverage as it pays for the same level and type of coverage for similarly situated active employees in lieu of reimbursement of alternative commercially available comparable coverage during the COBRA health care continuation coverage period. If at any time during the Severance Compensation Period similar health insurance coverage shall become available to Executive in connection with Executive’s employment by another employer, Executive will advise the Company, and the Company may terminate the COBRA Coverage subsidy and/or payments provided by the Company pursuant to this Subsection, effective on the date when Executive has the opportunity to be covered by such other health insurance coverage.

(g)   Life and Accident Insurance. Subject to (i) the provisions of the last sentence of this Subsection and (ii) the terms, limitations and exclusions of the Plan or Plans for provision of life and accident insurance and the Company’s related policies of group insurance (other than any limitation or exclusion classifying former employees as ineligible for participation), (A) during the Insurance Benefits Period the Company will provide life and accident insurance coverage for Executive comparable to the life and accident insurance coverage which Executive last elected to receive as an employee under the applicable Plan for such benefits, subject to modifications from time to time of the coverage available under such Plan or related insurance policies which are applicable generally to executive officers of the Company, and (B) on the Commencement Date the Company will reimburse Executive for the Company’s share (determined in accordance with the next sentence) of any premiums paid by Executive for such life and accident insurance during the period from the Termination Date to the Commencement Date. The cost of providing such insurance will be borne by the Company and Executive in accordance with the Company’s policy then in effect for employee participation in premiums, on substantially the same terms as would be applicable to an executive officer of the Company. The Company shall pay its share of such premiums to the applicable insurance carrier(s) on the due date(s) established by such carrier(s), but in no event later than the last day of the calendar year in which such due date(s) occurs. If at any time during the Insurance Benefits Period similar life or accident insurance coverage shall become available to Executive in connection with Executive’s employment by another employer, Executive will advise the Company, and the Company may terminate the corresponding life or accident coverage provided by the Company pursuant to this Subsection, effective on the date when Executive has the opportunity to be covered by such other insurance.

(h)   Stock Options. Any stock options (the “Stock Options”) granted to Executive pursuant to an Equity Compensation Plan which are not exercisable as of the Termination Date shall expire on the Termination Date. Any Stock Options that are exercisable as of the Termination Date shall expire on the date that is three months following the Termination Date.

12.   Compensation upon Termination Following a Change of Control. Subject to the terms of Sections 16-19, in the event of a Termination Following a Change of Control, Executive will receive from the Company the following payments and benefits in addition to the payments and benefits provided in Section 11 of this Agreement:

(a)   Bonus. If under any Bonus Plan no cash award shall have been granted to Executive for the last Performance Period ended before the Year of Termination, on the Commencement Date Executive will receive a lump sum amount equal to the sum of the Target Awards under each such Bonus Plan which would have been payable to Executive for such Performance Period.

(b)   LTI Awards. On each of the six month, eighteen month and thirty month anniversaries of the Commencement Date, Executive will receive an amount equal to the Target Award for the LTI Award for the Performance Period scheduled to end on the last day of the Year of Termination. Notwithstanding the foregoing, in the event that Executive’s Termination of Employment occurs after December 31, 2009, then Executive shall not be entitled to any of the amounts set forth in this Subsection.

(c)   Deferred Compensation Plan. On the Commencement Date, Executive shall receive a lump sum cash payment equal to the sum of the Employer Non-Elective Contributions with which Employee would have been credited under the Teleflex Incorporated Deferred Compensation Plan (“Deferred Compensation Plan”) for each of the next three plan years following the plan year which includes in the Termination Date, assuming that Executive’s “Compensation” and “Bonus,” as those terms are defined in the Deferred Compensation Plan, for each of the three plan years immediately following the plan year which includes the Termination Date are the same as Executive’s Compensation and Bonus for the plan year which includes the Termination Date.

(d)   Outplacement. Beginning on the Termination Date and ending on the earlier of the last day of the second calendar year beginning after the Year of Termination or the first date Executive is employed by another employer, the Company shall reimburse Executive for the cost of outplacement assistance services, up to a maximum of $20,000, which shall be provided by an outplacement agency selected by Executive. The Company shall reimburse Executive within 15 days following the date on which the Company receives proof of payment of such expense, which proof must be submitted no later than December 1 of the calendar year after the calendar year in which the expense was incurred.

(e)   Automobile. If the Executive was provided with the use of an automobile or a cash allowance therefor as of the Termination Date, the Company will provide Executive with a monthly vehicle allowance equal to what it would cost Executive to lease the vehicle utilized by the Executive immediately prior to his Termination Date, calculated by assuming that the lease is a three-year closed-end lease, for the Severance Compensation Period. The Company shall pay Executive the vehicle allowance as follows: (i) a lump sum cash amount equal to seven times the monthly vehicle allowance, on the Commencement Date; and (ii) a lump sum cash amount equal to the monthly vehicle allowance on the first day of each month thereafter for which the vehicle allowance is provided.

(f)   Acceleration of Vesting of Stock Options and Restricted Stock. All Stock Options, restricted stock awards and similar equity compensation awards now held by Executive, or hereafter granted to Executive pursuant to any Equity Compensation Plan, which are outstanding at the Termination Date and have not theretofore become exercisable in full (in the case of Stock Options) or non-forfeitable (in the case of restricted stock) will become exercisable in full or cease to be subject to the possibility of forfeiture, as applicable, on the Termination Date. Notwithstanding the terms of any other agreement to the contrary, the Board will take action to amend all Stock Options and restricted stock awards now held by Executive to provide for the foregoing acceleration of vesting, and the Board will include such a provision in the terms of all Stock Options and restricted stock awards granted to Executive hereafter. Any Stock Options not exercised by Executive prior to the Termination Date, whether or not exercisable prior to the Termination Date, shall expire on the date that is three months following the Termination Date.

13.   Limitations on Certain Payments

(a)   Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs and it is determined that any payment or distribution by the Company to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”), would constitute an “excess parachute payment” within the meaning of Section 280G of the Code, then, if the aggregate present value of such Payments exceeds 2.99 times Executive’s “base amount,” as defined in Section 280G(b)(3) of the Code (the “Executive Base Amount”), the amounts constituting “parachute payments” which would otherwise be payable to or for the benefit of Executive shall be reduced to the extent necessary so that such “parachute payments” are equal to 2.99 times the Executive Base Amount (the “Reduced Amount”); provided that such amounts shall not be so reduced if the Executive determines, based upon the advice of the Accounting Firm (as defined below), that without such reduction Executive would be entitled to receive and retain, on a net after tax basis (including, without limitation, any excise taxes payable under Section 4999 of the Code), an amount which is greater than the amount, on a net after tax basis, that the Executive would be entitled to retain upon his receipt of the Reduced Amount.

(b)   If the determination made pursuant to Section 13(a) results in a reduction of the Payments that would otherwise be paid to Executive except for the application of Section 13(a), then the reduction shall occur in the following order: reduction of cash payments; cancellation of accelerated vesting of equity-based awards (if applicable); reduction of employee benefits. In the event that acceleration of vesting of equity-based awards is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of Executive’s equity-based award.

(c)   All determinations to be made under this Section 13 shall be made by the Company’s independent public accountants immediately prior to the Change of Control or by another independent public accounting firm mutually selected by the Company and Executive before the date of the Change of Control (the “Accounting Firm”), which firm shall provide its determinations and any supporting calculations both to the Company and Executive within 20 days after the Termination Date. Any such determination by the Accounting Firm shall be binding upon the Company and Executive.

(d)   All of the fees and expenses of the Accounting Firm in performing the determinations referred to in this Section 13 shall be borne solely by the Company. The Company agrees to indemnify and hold harmless the Accounting Firm from any and all claims, damages and expenses resulting from or relating to its determinations pursuant to this Section 13, except for claims, damages or expenses resulting from the gross negligence or willful misconduct of the Accounting Firm.

(e)   As a result of the uncertainty in the application of Section 280G of the Code at the time of a determination hereunder, it is possible that payments will be made by the Company which should not have been made under this Section 13 (“Overpayment”) or that additional payments which are not made by the Company under this Section 13 should have been made (“Underpayment”). In the event that there is a final determination by the Internal Revenue Service, or a final determination by a court of competent jurisdiction, that an Overpayment has been made, any such Overpayment shall be treated for all purposes as a loan to Executive which Executive shall repay to the Company together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code. In the event that there is a final determination by the Internal Revenue Service, a final determination by a court of competent jurisdiction or a change in the provisions of the Code or regulations pursuant to which an Underpayment arises under this Agreement, any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive, together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code.

14.   Deductions and Taxes. Amounts payable by the Company pursuant to this Agreement shall be paid net of (i) taxes withheld by the Company in accordance with the requirements of law and (ii) deductions for the portion of the cost of certain benefits to be borne by Executive pursuant to Sections 11(f) and (g).

15.   Compensation and Benefits Pursuant to Other Agreements and Plans. Nothing in this Agreement is intended to diminish or otherwise affect Executive’s right to receive from the Company all compensation payable to Executive by the Company in respect of his Employment prior to the Termination Date pursuant to any agreement with the Company (other than this Agreement) or any Plan; provided that Executive shall have no rights under any other such agreement or Plan to receive severance pay, medical continuation coverage or similar compensation and benefits payable hereunder upon a Termination of Employment.

16.   Executive’s General Release and Resignation from Board of Directors. As a condition to the obligations of the Company to make any payments or provide any benefits pursuant to Sections 11 and 12 (other than Section 11(a)), the Company shall have received from Executive not later than the fifteenth business day following the Termination Date his written resignation from the Board and as an officer and director of the Company and all of its Affiliates and a general release in substantially the form of Exhibit A executed by Executive (the “Release”), and Executive shall not thereafter revoke the Release. No payments or other benefits shall be made or provided under this Agreement (including acceleration of exercisability of Stock Options or vesting of restricted stock) before the expiration of the seven-day revocation period described in Section 7 of the Release. In any case, if Executive fails to resign from the Board or fails to execute, or if Executive revokes, the Release, no payments or benefits shall thereafter be made or provided to Executive pursuant to Sections 11 or 12, and Executive shall be required to reimburse to the Company any payments or benefits (including the amount of income recognized with respect to any Stock Options or restricted stock for which exercisability or vesting was accelerated) received by Executive pursuant to this Agreement, but Executive’s obligations pursuant to Sections 17 and 18 shall continue in force.

17.   Confidential Information. Executive acknowledges that, by reason of Executive’s employment by and service to the Company, Executive has had and will continue to have access to confidential information of the Company and its Affiliates, including information and knowledge pertaining to products and services offered, innovations, designs, ideas, plans, trade secrets, proprietary information, distribution and sales methods and systems, sales and profit figures, customer and client lists, and relationships between the Company and its Affiliates and other distributors, customers, clients, suppliers and others who have business dealings with the Company and its Affiliates (“Confidential Information”). Executive acknowledges that such Confidential Information is a valuable and unique asset of the Company, and Executive covenants that Executive will not, either during or after Executive’s employment by the Company, disclose any such Confidential Information to any Person for any reason whatsoever without the prior written authorization of the Company, unless such information is in the public domain through no fault of Executive or except as may be required by law or in a judicial or administrative proceeding. Notwithstanding anything to the contrary herein, each of the parties (and each employee, representative, or other agent of such parties) may disclose to any Person, without limitation of any kind, the federal income tax treatment and federal income tax structure of the transactions contemplated hereby and all materials (including opinions or other tax analyses) that are provided to such party relating to such tax treatment and tax structure.

18.   Restrictive Covenants.

(a)   Covenant Not to Compete.

(i)   Executive agrees that, during the Severance Compensation Period, Executive will not, at any time, directly or indirectly, engage in, or have any interest on behalf of himself or others in any person or business other than the Company (whether as an employee, officer, director, agent, security holder, creditor, partner, joint venturer, beneficiary under a trust, investor, consultant or otherwise) that engages in any of those business activities, and in any geographic areas, in which the Company is engaged or has been engaged in the preceding 12 months (a “Competing Business”).

(ii)   Notwithstanding the restrictions set forth in Section 18(a)(i), during the Severance Compensation Period, Executive may acquire solely as an investment not more than 2% of any class of securities of an entity engaged in a Competing Business if such class of securities is listed on a national securities exchange or on the Nasdaq system, so long as Executive remains a passive investor in such entity and does not become engaged as a director, officer, employee or manager of such entity or otherwise involved in the day to day operations of such entity and Executive may engage in the activity described on Exhibit B on the terms and conditions set forth therein.

(b)   Hiring of Employees. During the Severance Compensation Period, the Executive agrees that Executive will not directly or indirectly solicit for employment, or hire or offer employment to, (i) any employee of the Company unless the Company first terminates the employment of such employee, or (ii) any person who at any time during the 180-day period prior to the Termination Date was an employee of the Company.

(c)   Non-Solicitation. Executive hereby agrees that, during the Severance Compensation Period, Executive will not directly or indirectly call on or solicit for the purpose of selling services or products of a type offered by the Company or divert or take away from the Company (including, by divulging any identity to any competitor or potential competitor of the Company) any person or entity who is at the Termination Date, or at any time during the 12 month period prior to the Termination Date had been, a customer of the Company or whose identity is known to Executive at the Termination Date as one whom the Company intends to solicit within the succeeding year.

(d)   Return of Company Property. Upon a Termination of Employment Executive will deliver to the person designated by the Company all originals and copies of all documents and property of the Company in Executive’s possession, under Executive’s control, or to which Executive may have access. The Executive will not reproduce or appropriate for Executive’s own use, or for the use of others, any Confidential Information.

19.   Equitable and Other Relief; Consent to Jurisdiction of Pennsylvania Courts.

(a)   Executive acknowledges that the restrictions contained in Sections 17 and 18 are reasonable and necessary to protect the legitimate interests of the Company and its Affiliates, that the Company would not have entered into this Agreement in the absence of such restrictions, and that any material violation of any provision of that such Sections will result in irreparable injury to the Company. Executive represents and acknowledges that (i) Executive has been advised by the Company to consult Executive’s own legal counsel in respect of this Agreement and (ii) Executive has had full opportunity, prior to execution of this Agreement, to review thoroughly this Agreement with Executive’s counsel.

(b)   Executive agrees that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of Sections 17 or 18, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled under applicable law. Without limiting the foregoing, Executive also agrees that payment of the compensation and benefits payable under Sections 11 and 12 may be automatically ceased in the event of a material breach of a covenant contained in Sections 17 or 18, provided the Company gives Executive written notice of such breach, specifying in reasonable detail the circumstances constituting such material breach.

(c)   Executive irrevocably and unconditionally (i) agrees that any suit, action or other legal proceeding arising out of Sections 17 or 18 hereof, including any action commenced by the Company for preliminary and permanent injunctive relief or other equitable relief, may be brought in a United States District Court in Pennsylvania, or if such court does not have jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in or around Philadelphia, Pennsylvania, (ii) consents to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding, and (iii) waives any objection which Executive may have to the laying of venue of any such suit, action or proceeding in any such court. Executive also irrevocably and unconditionally consents to receive service of any process, pleadings, notices or other papers in a manner provided for in Section 25 for the giving of notices.

20.   Arbitration of Disputes. If the Company and Executive cannot agree on the interpretation or enforcement of one or more provisions of this Agreement (including whether a material breach has occurred under Subsection 19(b)), such disagreement shall be resolved by an arbitrator, mutually agreeable to the Company and Executive, within 60 days after either party notifies the other of such disagreement. If the Company and Executive cannot mutually agree on a single arbitrator, each of the Company and Executive shall together choose an arbitrator and the two arbitrators so chosen shall choose a third neutral arbitrator. The decision of the arbitrator(s) shall be rendered within the initial 60-day period described above and shall be final.

21.   Enforcement. It is the intent of the parties that Executive not be required to incur any expenses associated with the enforcement of Executive’s rights under this Agreement by arbitration, litigation or other legal action, because the cost and expense thereof would substantially detract from the benefits intended to be extended to Executive hereunder. Accordingly, the Company will pay Executive the amount necessary to reimburse Executive in full for all expenses (including all attorneys’ fees and legal expenses) incurred by Executive in attempting to enforce any of the obligations of the Company under this Agreement, without regard to outcome, unless the lawsuit brought by Executive is determined to be frivolous by a court of final jurisdiction. The Company shall reimburse Executive within 15 days following the date on which the Company receives proof of payment of such expense, which proof must be submitted no later than December 1st of the calendar year after the calendar year in which the expense was incurred. The amount of such expenses that the Company is obligated to pay in any given calendar year shall not affect the amount of such expenses that the Company is obligated to pay in any other calendar year, and the Executive’s right to have the Company reimburse the payment of such expenses may not be liquidated or exchanged for any other benefit.

22.   No Obligation to Mitigate Company’s Obligations. Executive will not be required to mitigate the amount of any payment or benefit provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for herein be reduced by any compensation earned by other employment or otherwise, except to the extent provided in Subsections 11(f), 11(g) and 12(e) and Section 13.

23.   No Set-Off. Except as provided in Sections 14 and 19(b), the Company’s obligation to make the payments, and otherwise perform its obligations, provided for in this Agreement shall not be diminished or delayed by reason of any set-off, counterclaim, recoupment or similar claim which the Company may have against Executive or others.

24.   Successor Company. The Company shall require any successor or successors (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, by agreement in form and substance satisfactory to Executive, to acknowledge expressly that this Agreement is binding upon and enforceable against the Company in accordance with the terms hereof, and to become jointly and severally obligated with the Company to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession or successions had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement unless, upon written request by Executive, the Company obtains such agreement within 60 days following such request. As used in this Agreement, the Company shall mean the Company as herein before defined and any such successor or successors to its business or assets, jointly or severally.

25.   Notices. All notices and other communications given pursuant to or in connection with this Agreement shall be in writing and delivered (which may be by telefax or other electronic transmission) to a party at the following address, or to such other address as such party may hereafter specify by notice to the other party:

If to the Company, to:
Teleflex Incorporated
155 S. Limerick Road
Limerick, PA 19468

Attention: General Counsel and Board of Directors

If to Executive, to:
Jeffrey P. Black
At the most recent address furnished to the Company.

26.   Governing Law. This Agreement will be governed by the law of Pennsylvania, excluding any conflicts or choice of law rule or principle that might otherwise refer to the substantive law of another jurisdiction for the construction, or determination of the validity or effect, of this Agreement.

27.   Parties in Interest. This Agreement, including specifically the covenants of Sections 17 and 18, will be binding upon and inure to the benefit of the parties and their respective heirs, successors and assigns.

28.   Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the employment of Executive and the right of Executive to receive severance compensation upon the termination of his Employment, and supersedes any prior agreements or understandings between the parties relating to the subject matter of this Agreement, including but not limited to the Executive Change in Control Agreement dated June 21, 2005 between the parties and the Prior Agreement.

29.   Amendment or Modification. No amendment or modification of or supplement to this Agreement will be effective unless it is in writing and duly executed by the party to be charged thereunder. It is the Parties’ intention that the benefits and rights to which Executive could become entitled in connection with his Termination of Employment comply with Code Section 409A. If Executive or the Company believes, at any time, that any of such benefits or rights do not so comply, he or it shall promptly advise the other party and shall negotiate reasonably and in good faith to amend the terms of this Agreement such that it does comply with the most limited economic effect on both the Executive and the Company.

30.   Compliance with IRC Section 409A. Notwithstanding anything herein to the contrary, (i) if at the time of Executive’s termination of employment with the Company Executive is a “specified employee” as defined in Section 409A of the Code and the deferral of the commencement of any payments or benefits otherwise payable hereunder or pursuant to any other agreement with the Company as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Executive) until the date that is six months following Executive’s termination of employment with the Company (or the earliest date as is permitted under Section 409A of the Code without any accelerated or additional tax) and (ii) if any other payments of money or other benefits due to Executive hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Board, that is reasonably expected not to cause such an accelerated or additional tax. The Company shall consult with Executive in good faith regarding the implementation of the provisions of this Section 30; provided that neither the Company nor any of its employees or representatives shall have any liability to Executive with respect thereto. For purposes of Section 409A of the Code, each payment made under this Agreement shall be designated as a “separate payment” within the meaning of the Section 409A of the Code, and references herein to Executive’s “termination of employment” shall refer to Executive’s separation from service with the Company within the meaning of Section 409A. To the extent any reimbursements or in-kind benefits due to Executive under this Agreement constitute “deferred compensation” under Section 409A of the Code, any such reimbursements or in-kind benefits shall be paid to Executive in a manner consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv).

31.   Construction. The following principles of construction will apply to this Agreement:

(a)   Unless otherwise expressly stated in connection therewith, a reference in this Agreement to a “Section,” “Exhibit” or “party” refers to a Section of, or an Exhibit or a party to, this Agreement.

(b)   The word “including” means “including without limitation.”

32.   Headings and Titles. The headings and titles of Sections and the like in this Agreement are inserted for convenience of reference only, form no part of this Agreement and shall not be considered for purposes of interpreting or construing any provision hereof.

EXECUTED as of March 26, 2009.

TELEFLEX INCORPORATED

By: /s/ Laurence G. Miller
Name: Laurence G. Miller
Title: Executive Vice President,
General Counsel and Secretary



/s/ Jeffrey P. Black
Jeffrey P. Black

EX-10.1 2 c15464exv10w1.htm EXHIBIT 10.1

Exhibit 10.1

SENIOR EXECUTIVE OFFICER SEVERANCE AGREEMENT

THIS SENIOR EXECUTIVE OFFICER SEVERANCE AGREEMENT is made as of March 25, 2011, between TELEFLEX INCORPORATED (the “Company”) and Benson F. Smith (“Executive”).

Background

A. Executive is employed by the Company at its headquarters in Limerick, Pennsylvania as the Company’s Chairman, President and Chief Executive Officer.

B. The purpose of this Agreement is to provide for certain severance compensation and benefits to be paid or provided to Executive in the event of the termination of his employment under circumstances specified herein and to provide also for certain commitments by Executive respecting the Company.

Terms

THE PARTIES, in consideration of the mutual covenants hereinafter set forth, and intending to be legally bound hereby, agree as follows:

1. Definitions. The following terms used in this Agreement with initial capital letters have the respective meanings specified therefor in this Section.

Affiliate” of any Person means any other Person that controls, is controlled by or is under common control with the first mentioned Person.

Agreementpreceded by the word “this” means this Senior Executive Officer Severance Agreement, as amended at any relevant time.

Annual Incentive Plan” means the Management Incentive Plan (MIP) or Executive Incentive Plan (EIP) of the Company providing for the payment of annual bonuses to certain employees of the Company, including Executive, as such Plans may be amended from time to time or, if such Plans shall be discontinued, any similar Plan or Plans in effect at any relevant time.

Base Salary” of Executive means the annualized base rate of salary paid to Executive as such may be increased from time to time.

Board” means the Board of Directors of the Company.

Cause” means (a) misappropriation of funds, (b) conviction of a crime involving moral turpitude, or (c) gross negligence in the performance of duties, which gross negligence has had a material adverse effect on the business, operations, assets, properties or financial condition of the Company and its subsidiaries taken as a whole.

 

 


 

Change of Control Severance Agreement” means the Executive Severance Agreement between Executive and the Company, relating to termination of employment of Executive after the occurrence of a Change of Control of the Company (defined in such Agreement).

Code” means the Internal Revenue Code of 1986, as amended.

Commencement Date” with respect to the commencement of any compensation or provision of benefits pursuant to this Agreement means the first day of the seventh month beginning after the Termination Date.

Confidential Information” has the meaning specified therefor in Section 9.

Disability” shall mean Executive’s continuous illness, injury or incapacity for a period of six consecutive months.

Employment” means substantially full time employment of Executive by the Company or any of its Affiliates.

Good Reason” means the occurrence of one or more of the following:

(a) A change of the principal office or work place assigned to Executive to a location more than 25 miles distant from its location immediately prior to such change.

(b) A material reduction by the Company of the executive title, duties, responsibilities, authority, status, reporting relationship or executive position of Executive; provided that if the Company sells or otherwise disposes of any part of its business or assets or otherwise diminishes or changes the character of its business, the change in the magnitude or character of the Company’s business resulting therefrom will not itself be deemed to be a reduction of Executive’s responsibilities, authority or status within the meaning of this clause (b).

(c) A reduction of Executive’s Base Salary or a material reduction in the Executive’s annual target incentive opportunity under the Annual Incentive Plan.

Health Care Continuation Period” means the period commencing on the Termination Date and ending on the earlier of (i) the last day of the Severance Compensation Period or (ii) the first date on which Executive is eligible to participate in a health care plan maintained by another employer.

Insurance Benefits Period” means the period commencing on the Termination Date and ending on the earlier of (i) the last day of the Severance Compensation Period or (ii) the first date on which Executive is eligible to participate in a life and/or accident insurance plan maintained by another employer.

 

2


 

Notice of Termination” has the meaning specified therefor in Section 3.

Performance Period” applicable to any compensation payable (in cash or other property) under any Plan, the amount or value of which is determined by reference to the performance of participants or the Company or the fulfillment of specified conditions or goals, means the period of time over which such performance is measured or the period of time in which such conditions or performance goals must be fulfilled.

Person” means an individual, a corporation or other entity or a government or governmental agency or institution.

Plan” means a plan of the Company for the payment of compensation or provision of benefits to employees in which plan Executive is or was, at all times relevant to the provisions of this Agreement, a participant or eligible to participate.

Prorated Amount” has the meaning specified therefor in Section 4(c).

Release” has the meaning specified therefor in Section 7.

Severance Compensation Period” means the 24 month period commencing on the day after the Termination Date.

Termination Date” means the date specified in a Notice of Termination complying with the provisions of Section 3, as such Notice of Termination may be amended by mutual consent of the parties, which date shall be the date Executive’s Termination of Employment occurs.

Termination of Employment” means a cessation of Employment for any reason, other than a cessation occurring (i) by reason of Executive’s death or Disability or (ii) under circumstances which would entitle Executive to receive compensation and benefits pursuant to the Change of Control Severance Agreement. Executive’s Termination of Employment for all purposes under this Agreement will be determined to have occurred in accordance with the “separation from service” requirements of Code Section 409A and the Treasury Regulations and other guidance issued thereunder, and based on whether the facts and circumstances indicate that the Company and Executive reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services Executive would perform after such date (as an employee or as an independent contractor) would permanently decrease to no more than 20 percent of the average level of bona fide services performed over the immediately preceding 36-month period (or actuarial period of service, if less).

Year of Termination” means the Year in which Executive’s Termination Date occurs.

Year” means a fiscal year of the Company.

 

3


 

2. Continued Employment of Executive. The parties acknowledge that Executive’s employment by the Company is at will and, except as the parties may hereafter agree in writing, such employment may be terminated by either party at any time, subject only to the giving of prior notice pursuant to Section 3. Nothing in this Agreement shall be construed as giving Executive any right to continue in the employ of the Company.

3. Notice of Termination of Employment. The party initiating any Termination of Employment shall give notice thereof to the other party (a “Notice of Termination”). A Notice of Termination shall (i) state with reasonable particularity the reasons for such Termination of Employment, if any, which are relevant to Executive’s right to receive compensation and benefits pursuant to this Agreement and (ii) specify the date such Termination of Employment shall become effective which, without the consent of such other party, shall not be earlier than 30 days after the date of such Notice of Termination; provided that the Company shall have the option to continue paying the Base Salary of the Executive for up to 30 days following the Termination Date in lieu of the requirement that the Executive consents to an earlier date.

4. Compensation upon Termination of Employment. Subject to the terms of Sections 6 and 7, upon Termination of Employment (i) by the Company other than for Cause or (ii) by Executive within 3 months after the occurrence of a Good Reason, Executive will receive from the Company the following payments and benefits:

(a) Cash Bonuses for Years Preceding the Year of Termination. If any cash bonus pursuant to an Annual Incentive Plan in respect of a Performance Period which ended before the Year of Termination shall not have been paid to Executive on or before the Termination Date, the Company will pay Executive such bonus in the amount of Executive’s award earned for the Performance Period in the form of a single lump sum cash payment on the later of the 15th day following the Termination Date or the date that is 2-1/2 months following the end of the Performance Period; provided, however, that if any such Annual Incentive Plan requires, as a condition to eligibility for payment, that a participant be employed by the Company on the date payment is made, then payment of the bonus under such Annual Incentive Plan for the Performance Period ended before the Year of Termination shall be made on the Commencement Date.

(b) Continuation of Base Salary. The Company will pay Executive (i) on the Commencement Date an amount equal to seven-twelfths of Executive’s Base Salary as in effect immediately prior to the Termination Date, and (ii) each month thereafter during the Severance Compensation Period an amount equal to one-twelfth of Executive’s Base Salary as in effect immediately prior to the Termination Date.

(c) Payment of Annual Incentive Plan Award for Performance Period Not Completed Before the Termination Date. If the Termination Date occurs before the last day, but after completion of at least six months, of a Performance Period under the Annual Incentive Plan, the Company will pay Executive the Prorated Amount of Executive’s award under the Annual Incentive Plan for that Performance Period. The amount of the award, from which the Prorated Amount is derived, shall be determined based on the degree to which each performance goal on which such award is based has been achieved at the end of the Performance Period (provided that any individual performance component shall be equal to the target award amount for such component). The “Prorated Amount” of the award means an amount equal to the portion of the award which bears the same ratio to the amount of the award as the portion of such Performance Period expired immediately before the Termination Date bears to the entire period of such Performance Period. The amount to which Executive is entitled under this Section 4(c) shall be paid in the form of a single lump sum cash payment on the later of the Commencement Date or the date that is 2-1/2 months following the end of the Performance Period.

 

4


 

(d) Vehicle Allowance. The Company shall pay Executive a monthly cash vehicle allowance during the Severance Compensation Period equal to what it would cost Executive to lease the vehicle utilized by Executive immediately prior to the Termination Date, calculated by assuming that the lease is a three (3) year closed-end lease. The Company shall pay Executive (i) a lump sum cash amount equal to seven times the monthly vehicle allowance on the Commencement Date; and (ii) a lump sum cash amount equal to the monthly vehicle allowance on the first day of each month thereafter for which the vehicle allowance is provided.

(e) Outplacement. The Company shall reimburse Executive for expenses incurred for outplacement services during the Severance Compensation Period, up to a maximum aggregate amount of $20,000, which services shall be provided by an outplacement agency selected by Executive. The Company shall reimburse Executive within 15 days following the date on which the Company receives proof of payment of such expense, which proof must be submitted no later than December 1st of the calendar year after the calendar year in which the expense was incurred. Notwithstanding the foregoing, Executive shall only be entitled to reimbursement for those outplacement service costs incurred by Executive on or prior to the last day of the second year following the Termination Year.

(f) Health Care Coverage. During the Health Care Continuation Period, the Company will provide health care coverage under the Company’s then-current health care Plan for Executive and Executive’s spouse and eligible dependents on the same basis as if Executive had continued to be employed during that period. If the continuation of coverage under the Company’s health care Plan for Executive and Executive’s spouse and eligible dependents results in a violation of Section 105(h) of the Code, the continuation of coverage will be on an after-tax basis with the portion of the monthly cost of coverage paid by the Company being additional taxable income. If the continuation of coverage under the Company’s health care Plan will be on an after-tax basis, the Company will pay Executive a lump sum cash payment on the last day of each applicable month during the Health Care Continuation Period so that Executive will be in the same position as if the continuation of coverage could have been provided on a pre-tax basis. The COBRA health care continuation coverage period under Section 4980B of the Code shall begin at the end of the Health Care Continuation Period. Notwithstanding the preceding, if Executive and Executive’s spouse and eligible dependents are not eligible to continue health care coverage under the Company’s health care Plan, the Company will reimburse Executive in cash on the last day of each month during the Health Care Continuation Period (or balance thereof) an amount based on the cost actually paid by Executive for that month to maintain health insurance coverage from commercial sources that is comparable to the health care coverage Executive last elected as an employee for Executive and Executive’s spouse and eligible dependents under the Company’s health care Plan covering Executive, where the net monthly reimbursement after taxes are withheld will equal the Company’s portion of the cost paid by the Executive for that month’s coverage determined in accordance with the Company’s policy then in effect for employee cost sharing, on substantially the same terms as would be applicable to an executive officer of the Company.

 

5


 

(g) Life and Accident Insurance. Subject to the terms, limitations and exclusions of the Plan or Plans for provision of life and accident insurance and the Company’s related policies of group insurance, (i) during the Insurance Benefits Period the Company will provide life and accident insurance coverage for Executive comparable to the life and accident insurance coverage which Executive last elected to receive as an employee under the applicable Plan for such benefits, subject to modifications from time to time of the coverage available under such Plan or related insurance policies which are applicable generally to executive officers of the Company, (ii) during the period from the Termination Date through the Commencement Date, Executive shall pay the entire cost of such life and accident insurance coverage and (iii) on the Commencement Date the Company will reimburse Executive for the Company’s share (determined in accordance with the next sentence) of any premiums paid by Executive for such life and accident insurance during the period from the Termination Date to the Commencement Date. The cost of providing such insurance will be borne by the Company and Executive in accordance with the Company’s policy then in effect for employee participation in premiums, on substantially the same terms as would be applicable to an executive officer of the Company. The Company shall pay its share of such premiums to the applicable insurance carrier(s) on the due date(s) established by such carrier(s), but in no event later than the last day of the calendar year in which such due date(s) occurs.

(h) Taxable Benefits. Any taxable welfare benefits provided pursuant to this Section 4 that are not “disability pay” or “death benefits” within the meaning of Treasury Regulations Section 1.409A-1(a)(5) (collectively, the “Applicable Benefits”) shall be subject to the following requirements in order to comply with Code Section 409A. The amount of any Applicable Benefit provided during one taxable year shall not affect the amount of the Applicable Benefit provided in any other taxable year, except that with respect to any Applicable Benefit that consists of the reimbursement of expenses referred to in Code Section 105(b), a limitation may be imposed on the amount of such reimbursements over some or all of the applicable Severance Compensation Period, as described in Treasury Regulations Section 1.409A-3(i)(iv)(B). To the extent that any Applicable Benefit consists of the reimbursement of eligible expenses, such reimbursement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred. No Applicable Benefit may be liquidated or exchanged for another benefit. If Executive is a “specified employee”, as defined in Code Section 409A, then during the period of six months immediately following Executive’s termination of employment, Executive shall be obligated to pay the Company the full cost for any Applicable Benefits that do not constitute health benefits of the type required to be provided under the health continuation coverage requirements of Code Section 4980B, and the Company shall reimburse Executive for any such payments on the first business day that is more than six months after the Termination Date.

5. Deductions and Taxes. Amounts payable by the Company pursuant to this Agreement shall be paid net of (i) taxes withheld by the Company in accordance with the requirements of law and (ii) deductions for the portion of the cost of certain benefits to be borne by Executive pursuant to Sections 4(f) and (g).

 

6


 

6. Compensation and Benefits Pursuant to Other Agreements and Plans. Nothing in this Agreement is intended to diminish or otherwise affect Executive’s right to receive from the Company all compensation payable to Executive by the Company in respect of his Employment prior to the Termination Date pursuant to any agreement with the Company (other than this Agreement) or any Plan.

7. Executive’s General Release and Resignation from Board of Directors. As a condition to the obligations of the Company to pay severance compensation and provide benefits pursuant to Section 4, the Company shall have received from Executive within 10 days following the Termination Date a written resignation from the Board and as an officer and director of the Company and all of its Affiliates and a general release in substantially the form of Exhibit A executed by Executive (the “Release”), and Executive shall not thereafter revoke the Release. If Executive fails to resign from the Board or fails to execute, or if Executive revokes, the Release, no payments or benefits shall thereafter be made or provided to Executive pursuant to this Agreement, and Executive shall be required to reimburse to the Company any payments or benefits received by Executive pursuant to this Agreement, but Executive’s obligations pursuant to Sections 8 and 9 shall continue in force.

8. Confidential Information. Executive acknowledges that, by reason of Executive’s employment by and service to the Company, Executive has had and will continue to have access to confidential information of the Company and its Affiliates, including information and knowledge pertaining to products and services offered, innovations, designs, ideas, plans, trade secrets, proprietary information, distribution and sales methods and systems, sales and profit figures, customer and client lists, and relationships between the Company and its Affiliates and other distributors, customers, clients, suppliers and others who have business dealings with the Company and its Affiliates (“Confidential Information”). Executive acknowledges that such Confidential Information is a valuable and unique asset of the Company, and Executive covenants that (except in connection with the good faith performance of his duties while employed by the Company) Executive will not, either during or after Executive’s employment by the Company, disclose any such Confidential Information to any Person for any reason whatsoever without the prior written authorization of the Company, unless such information is in the public domain through no fault of Executive or except as may be required by law or in a judicial or administrative proceeding. Notwithstanding anything to the contrary herein, each of the parties (and each employee, representative, or other agent of such parties) may disclose to any Person, without limitation of any kind, the federal income tax treatment and federal income tax structure of the transactions contemplated hereby and all materials (including opinions or other tax analyses) that are provided to such party relating to such tax treatment and tax structure.

 

7


 

9. Restrictive Covenants.

(a) Covenant Not to Compete.

(i) Executive agrees that, for a period of twenty-four (24) months after the Termination Date (the “Non-Compete Period”), Executive will not, at any time, directly or indirectly, engage in, or have any interest on behalf of himself or others in any person or business other than the Company (whether as an employee, officer, director, agent, security holder, creditor, partner, joint venturer, beneficiary under a trust, investor, consultant or otherwise) that engages in similar business activities to the Company in a particular market and product line, and in the specific geographic areas in which the Company is engaged or has been engaged in the preceding twelve (12) months for that particular market and product line (the “Business Activities”).

(ii) Notwithstanding the foregoing, Executive may (A) engage, participate or invest in, or be employed by, an entity that is engaged in the Business Activities (a “Competing Entity”) so long as (1) the Annual Revenues derived by the Company from the Business Activities in which the Competing Entity is engaged do not exceed $50 million in the aggregate and (2) the Annual Revenues derived by the Competing Entity from the Business Activities do not exceed $50 million in the aggregate; (B) engage, participate or invest in, or be employed by, a Competing Entity so long as the Business Activities for which Executive has oversight do not exceed five percent (5%) of the total Annual Revenues of such Competing Entity; or (C) acquire solely as an investment not more than 2% of any class of securities of any competing entity if such class of securities is listed on a national securities exchange or on the Nasdaq system, so long as Executive remains a passive investor in such entity. For purposes of this Section 9(a)(ii), the term “Annual Revenues” shall mean annual revenues for the most recently completed fiscal year.

(b) Hiring of Employees. During the Non-Compete Period, the Executive agrees that Executive will not directly or indirectly solicit for employment, or hire or offer employment to, (i) any employee of the Company unless the Company first terminates the employment of such employee, or (ii) any person who at any time during the one hundred eighty (180) day period prior to the Termination Date was an employee of the Company.

(c) Non-Solicitation. Executive hereby agrees that, during the Non-Compete Period, Executive will not directly or indirectly call on or solicit for the purpose of diverting or taking away from the Company (including, by divulging any Confidential Information to any competitor or potential competitor of the Company) any person or entity who is at the Termination Date, or at any time during the twelve (12) month period prior to the Termination Date had been, a customer of the Company with whom the Executive had direct personal contact as a representative of the Company or a potential customer whose identity is known to Executive at the Termination Date as one whom the Company was actively soliciting as a potential customer within six months prior to the Termination Date.

(d) Return of Company Property. Upon a Termination of Employment Executive will deliver to the person designated by the Company all originals and copies of all documents and property of the Company in Executive’s possession, under Executive’s control, or to which Executive may have access. The Executive will not reproduce or appropriate for Executive’s own use, or for the use of others, any Confidential Information.

 

8


 

10. Cooperation. Upon Termination of Employment, Executive shall reasonably cooperate with the Company, its officers, employees, agents, affiliates and attorneys in the defense or prosecution of any lawsuit, dispute, investigation or other legal proceedings or any preparation for any such disputes or proceedings that may be anticipated or threatened (“Proceedings”). Executive shall reasonably cooperate with the Company, its officers, employees, agents, affiliates and attorneys on any other matter (“Matters”) related to Company business (specifically to include Teleflex Medical Incorporated and Arrow International, Inc. business) during the period in which Executive is employed by the Company. Executive shall reasonably cooperate with the Company, its officers, employees, agents, affiliates and attorneys in responding to any form of media inquiry or in making any form of public comment related to the Executive’s employment, including, but not limited to, the Executive’s separation from the Company. Such cooperation shall include providing true and accurate information or documents concerning, or affidavits or testimony about, all or any matters at issue in any Proceedings/Matters as shall from time to time be reasonably requested by the Company, and shall be within Executive’s knowledge. Such cooperation shall be provided by Executive without remuneration, but Executive shall be entitled to reimbursement for all reasonable and appropriate expenses Executive incurs in so cooperating, including (by way of example and not by way of limitation) reasonable airplane fares, hotel accommodations, meal charges and other similar expenses to attend Proceedings/Matters outside of the city of Executive’s residence. In the event Executive is made aware of any issue or matter related to the Company, is asked by a third party to provide information regarding the Company, or is called other than by the Company as a witness to testify in any matter related to the Company, Executive will notify the Company immediately in order to give the Company a reasonable opportunity to respond and/or participate in such Proceeding/Matter, unless Executive is requested or required not to do so by law enforcement, or any other governmental agency or authority.

11. Equitable and Other Relief; Consent to Jurisdiction of Pennsylvania Courts.

(a) Executive acknowledges that the restrictions contained in Sections 8 and 9 are reasonable and necessary to protect the legitimate interests of the Company and its Affiliates, that the Company would not have entered into this Agreement in the absence of such restrictions, and that any violation of any provision of that Section will result in irreparable injury to the Company. Executive represents and acknowledges that (i) Executive has been advised by the Company to consult Executive’s own legal counsel in respect of this Agreement and (ii) Executive has had full opportunity, prior to execution of this Agreement, to review thoroughly this Agreement with Executive’s counsel.

(b) Executive agrees that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of Sections 8 or 9, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled under applicable law. Without limiting the foregoing, Executive also agrees that payment of the compensation and benefits payable under Section 4 may be automatically ceased in the event of a material breach of the covenants of Sections 8 or 9, provided the Company gives Executive written notice of such breach, specifying in reasonable detail the circumstances constituting such material breach.

 

9


 

(c) Executive irrevocably and unconditionally (i) agrees that any suit, action or other legal proceeding arising out of Sections 8 or 9 hereof, including any action commenced by the Company for preliminary and permanent injunctive relief or other equitable relief, may be brought in a United States District Court in Pennsylvania, or if such court does not have jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in or around Philadelphia, Pennsylvania, (ii) consents to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding, and (iii) waives any objection which Executive may have to the laying of venue of any such suit, action or proceeding in any such court. Executive also irrevocably and unconditionally consents to receive service of any process, pleadings, notices or other papers in a manner provided for in Section 15 for the giving of notices.

12. Enforcement. It is the intent of the parties that Executive not be required to incur any expenses associated with the enforcement of Executive’s rights under this Agreement by arbitration, litigation or other legal action, because the cost and expense thereof would substantially detract from the benefits intended to be extended to Executive hereunder. Accordingly, the Company will pay Executive the amount necessary to reimburse Executive in full for all expenses (including all attorneys’ fees and legal expenses) incurred by Executive in attempting to enforce any of the obligations of the Company under this Agreement, without regard to outcome, unless the lawsuit brought by Executive is determined to be frivolous by a court of final jurisdiction. The Company shall reimburse Executive within 15 days following the date on which the Company receives proof of payment of such expense, which proof must be submitted no later than December 1 of the calendar year after the calendar year in which the expense was incurred. The amount of such expenses that the Company is obligated to pay in any given calendar year shall not affect the amount of such expenses that the Company is obligated to pay in any other calendar year, and Executive’s right to have the Company reimburse the payment of such expenses may not be liquidated or exchanged for any other benefit.

13. No Obligation to Mitigate Company’s Obligations. Executive will not be required to mitigate the amount of any payment or benefit provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for herein be reduced by any compensation earned by other employment or otherwise, except to the extent provided in Subsections 4(f) and 4(g).

14. No Set-Off. Except as provided in Sections 7 and 11(b), the Company’s obligation to make the payments, and otherwise perform its obligations, provided for in this Agreement shall not be diminished or delayed by reason of any set-off, counterclaim, recoupment or similar claim which the Company may have against Executive or others.

 

10


 

15. Notices. All notices and other communications given pursuant to or in connection with this Agreement shall be in writing and delivered (which may be by telefax or other electronic transmission) to a party at the following address, or to such other address as such party may hereafter specify by notice to the other party:

If to the Company, to:

Teleflex Incorporated
155 S. Limerick Road
Limerick, PA 19468
Attention: General Counsel

If to Executive, to:

Benson F. Smith
[Intentionally omitted]

16. Residence; Governing Law. Executive hereby represents and warrants to the Company that, as of the date of this Agreement, Executive is a resident of the Commonwealth of Pennsylvania. This Agreement will be governed by the law of Pennsylvania, excluding any conflicts or choice of law rule or principle that might otherwise refer to the substantive law of another jurisdiction for the construction, or determination of the validity or effect, of this Agreement.

17. Parties in Interest. This Agreement, including specifically the covenants of Sections 8 and 9, will be binding upon and inure to the benefit of the parties and their respective heirs, successors and assigns.

18. Entire Agreement. This Agreement and the Change of Control Severance Agreement contain the entire agreement between the parties with respect to the right of Executive to receive severance compensation upon the termination of his Employment, and such Agreements supersede any prior agreements or understandings between the parties relating to the subject matter of the Change of Control Severance Agreement or this Agreement.

19. Amendment or Modification. No amendment or modification of or supplement to this Agreement will be effective unless it is in writing and duly executed by the party to be charged thereunder. It is the Parties’ intention that the benefits and rights to which Executive could become entitled in connection with Termination of Employment comply with Code Section 409A. If Executive or the Company believes, at any time, that any of such benefit or right does not so comply, he or it shall promptly advise the other party and shall negotiate reasonably and in good faith to amend the terms of this Agreement such that it complies (with the most limited economic effect on Executive and the Company).

20. Construction. The following principles of construction will apply to this Agreement:

(a) Unless otherwise expressly stated in connection therewith, a reference in this Agreement to a “Section,” “Exhibit” or “party” refers to a Section of, or an Exhibit or a party to, this Agreement.

(b) The word “including” means “including without limitation.”

 

11


 

21. Headings and Titles. The headings and titles of Sections and the like in this Agreement are inserted for convenience of reference only, form no part of this Agreement and shall not be considered for purposes of interpreting or construing any provision hereof.

EXECUTED as of the date first above written in Limerick, Pennsylvania.

 

 

 

 

 

 

TELEFLEX INCORPORATED
 

 

 

By:  

/s/ Laurence G. Miller  

 

 

 

Name:  

Laurence G. Miller 

 

 

 

Title:  

Executive Vice President, Secretary and General Counsel 

 

 

 

 

 

 

/s/ Benson F. Smith  

 

 

Benson F. Smith 

 

 

 

 

 

 

12