UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.    )

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GREATBATCH, INC.

(Name of Registrant as Specified In Its Charter)

 

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

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April 15, 2011

Dear Stockholder:

You are cordially invited to attend the Annual Meeting of Stockholders of Greatbatch, Inc. which will be held on Tuesday, May 17, 2011 at 10:00 a.m. Central Daylight Time at The Westin Minneapolis, 88 South 6^th Street, Minneapolis, Minnesota 55402.

Details of the business to be conducted at the Annual Meeting are given in the enclosed Notice of Annual Meeting and Proxy Statement. Included with the Proxy Statement is a copy of the company’s 2010 Annual Report. We encourage you to read this document. It includes information on the company’s operations, markets and products, as well as the company’s audited financial statements.

Whether or not you attend the Annual Meeting, it is important that your shares be represented and voted. To make it easier for you to vote, we are offering Internet and telephone voting. The instructions included on your proxy card describe how to vote using these services. Of course, if you prefer, you can vote by mail by completing and signing your proxy card, and returning it in the enclosed postage-paid envelope provided.

We look forward to seeing you at the Annual Meeting.

Sincerely,

/s/ Bill R. Sanford

Bill R. Sanford
Chairman of the Board

/s/ Thomas J. Hook

Thomas J. Hook
President & Chief Executive Officer

GREATBATCH, INC.
10000 WEHRLE DRIVE
CLARENCE, NEW YORK 14031

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To the Stockholders of Greatbatch, Inc.:

The Annual Meeting of the Stockholders of Greatbatch, Inc. will be held at The Westin Minneapolis, 88 South 6^th Street, Minneapolis, Minnesota 55402, on Tuesday, May 17, 2011 at 10:00 a.m. Central Daylight Time for the following purposes:

1.

To elect nine directors for a term of one year and until their successors have been elected and qualified;

2.

To approve the adoption of the Greatbatch, Inc. 2011 Stock Incentive Plan;

3.

To ratify the appointment of Deloitte & Touche LLP as the independent registered public accounting firm for Greatbatch, Inc. for fiscal year 2011;

4.

To approve, on an advisory basis, the compensation of our named executive officers;

5.

To approve, on an advisory basis, the frequency of the advisory vote on compensation of our named executive officers; and

6.

To consider and act upon other matters that may properly come before the Annual Meeting and any adjournments thereof.

Stockholders of record at 5:00 p.m., Eastern Daylight Time, on April 1, 2011 are entitled to vote at the Annual Meeting.

		By Order of the Board of Directors,
		/s/ Timothy G. McEvoy
		Timothy G. McEvoy
		Vice President, General Counsel & Secretary

Clarence, New York
April 15, 2011

IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AND VOTED AT THE ANNUAL MEETING. YOU CAN VOTE YOUR SHARES BY PROXY BY USING ONE OF THE FOLLOWING METHODS: MARK, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE-PAID ENVELOPE FURNISHED FOR THAT PURPOSE, OR VOTE BY TELEPHONE OR THE INTERNET USING THE INSTRUCTIONS ON THE ENCLOSED PROXY CARD. ANY PROXY MAY BE REVOKED IN THE MANNER DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT AT ANY TIME PRIOR TO ITS EXERCISE AT THE ANNUAL MEETING OF STOCKHOLDERS. ANY STOCKHOLDER PRESENT AT THE MEETING MAY WITHDRAW HIS OR HER PROXY AND VOTE PERSONALLY ON ANY MATTER PROPERLY BROUGHT BEFORE THE MEETING.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 17, 2011

THE GREATBATCH, INC. 2011 PROXY STATEMENT AND 2010 ANNUAL REPORT ARE AVAILABLE AT
http://proxy.greatbatch.com

GREATBATCH, INC.
10000 WEHRLE DRIVE
CLARENCE, NEW YORK 14031
PROXY STATEMENT

Contents		Page
Introduction			2
Voting Rights			2
Principal Beneficial Owners of Shares			3
Company Proposals			4
Proposal 1 — Election of Directors			4
Proposal 2 — Approval of the Adoption of the Greatbatch, Inc. 2011 Stock Incentive Plan			7
Proposal 3 — Ratification of the Appointment of Independent Registered Public Accounting Firm			10
Proposal 4 — Advisory Vote on Compensation of the Named Executive Officers			10
Proposal 5 — Advisory Vote on the Frequency of the Advisory Vote on Compensation of the Named Executive Officers			11
Stock Ownership by Directors and Executive Officers			11
Section 16(a) Beneficial Ownership Reporting Compliance			12
Executive Compensation — Compensation Discussion and Analysis			13
Overview			13
Compensation Committee Practices and Procedures			14
Competitive Market Review			15
Base Salary			16
Annual Cash Incentives			16
Long-Term Equity Awards			18
Share Ownership and Holding Period Guidelines			21
Retirement and Change of Control Agreements			21
Other Personal Benefits			23
Employment Agreements			24
Compensation and Organization Committee Report			25
Compensation Risk Analysis			25
Compensation Tables			25
Summary Compensation Table			25
2010 Grants of Plan-Based Awards			27
Outstanding Equity Awards at 2010 Fiscal Year-End			28
2010 Stock Option Exercises and Stock Vested			30
Pension Benefits and Nonqualified Deferred Compensation Tables			31
Corporate Governance and Board Matters			31
Leadership Structure of the Board			31
Board Independence			32
Enterprise Risk Management			32
Meetings and Committees of the Board			32
Executive Sessions of the Board			33
Communications with the Board			33
Compensation Committee Interlocks and Insider Participation			33
2010 Director Compensation			33
Related Person Transactions			35
Audit Committee Report			35
Stockholder Proposals			36
Other Matters			36
Greatbatch, Inc. 2011 Stock Incentive Plan			A-1

PROXY STATEMENT

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation by the Board of Directors (the “Board”) of Greatbatch, Inc. (the “Company”) of proxies in the accompanying form for use at the 2011 Annual Meeting of Stockholders or any adjournment or adjournments thereof. The Company will bear the expense of preparing, printing and mailing this proxy statement and the proxies solicited hereby.

The Annual Meeting of Stockholders of the Company will be held at 10:00 a.m. Central Daylight Time on May 17, 2011 at The Westin Minneapolis, 88 South 6^th Street, Minneapolis, Minnesota 55402. The Company’s mailing address is 10000 Wehrle Drive, Clarence, New York 14031, and its telephone number is (716) 759-5600.

This Proxy Statement and the accompanying form of proxy are first being sent to stockholders of record on or about April 15, 2011. A copy of the Company’s 2010 Annual Report, including financial statements, has either previously been delivered or accompanies this Proxy Statement, but is not part of the proxy solicitation materials.

VOTING RIGHTS

Stockholders of record at 5:00 p.m., Eastern Daylight Time, on April 1, 2011 are entitled to vote at the Annual Meeting. At that time, the Company had outstanding 23,302,625 shares of common stock, $0.001 par value per share (“Common Stock”). Each share of Common Stock is entitled to one vote. An individual who has a beneficial interest in shares allocated to the Company stock fund account under the Greatbatch, Inc. 401(k) Retirement Plan (the “401(k) Plan”) is entitled to vote the shares of Common Stock allocated to that account.

Shares may not be voted at the meeting unless the owner is present or represented by proxy. A stockholder can be represented through the return of a physical proxy or by utilizing the telephone or Internet voting procedures. An individual with a beneficial interest in the 401(k) Plan may give directions to the trustee of the 401(k) Plan, or its designated representative, as to how the allocated shares should be voted by returning the proxy card or using the telephone or Internet voting methods. The telephone and Internet voting procedures are designed to authenticate stockholders by use of a control number and allow stockholders to confirm that their instructions have been properly recorded. The method by which you vote will in no way limit your right to vote at the Annual Meeting if you later decide to attend in person. A stockholder giving a proxy may revoke it at any time before it is exercised by giving written notice of such revocation or by delivering a later dated proxy, in either case, to Timothy G. McEvoy, the Company’s Secretary, at the Company’s mailing address set forth above, or by the vote of the stockholder in person at the Annual Meeting.

Proxies will be voted in accordance with the stockholder’s direction, if any. Unless otherwise directed, proxies will be voted in favor of the election as directors of the persons named under the caption “NOMINEES FOR DIRECTOR,” in favor of approval of the Greatbatch, Inc. 2011 Stock Incentive Plan, in favor of ratifying the appointment of Deloitte & Touche LLP (“Deloitte & Touche”) as the independent registered public accounting firm for the Company for fiscal year 2011, in favor of approval of the compensation of the Company’s named executive officers, and in favor of “one year” with respect to the frequency of votes on the compensation of the Company’s named executive officers.

The presence in person or by proxy of the holders of a majority of the outstanding Common Stock will constitute a quorum for the transaction of business at the meeting. Broker non-votes, abstentions and directions to withhold authority will be counted as being present or represented at the meeting for purposes of establishing a quorum. A broker non-vote occurs when a broker or other nominee holding shares for a beneficial owner does not vote on a particular proposal because it does not have discretionary voting power on that proposal and has not received voting instructions from the beneficial owner.

The vote of a plurality of the shares of Common Stock present in person or represented at the meeting is required for the election of directors. Broker non-votes and directions to withhold authority will have no effect on the election of directors.

The affirmative vote of a majority of the shares cast is required to approve the adoption of the Greatbatch, Inc. 2011 Stock Incentive Plan, provided that a majority of the outstanding shares are voted on the proposal. In determining whether the proposal has received the requisite number of affirmative votes, abstentions will be counted and will have the same effect as a negative vote. Broker non-votes will not constitute votes cast for purposes of determining approval or the number of shares voted on the proposal.

The affirmative vote of a majority of the shares present in person or represented by proxy at the meeting is required to ratify the appointment of Deloitte & Touche as the independent registered public accounting firm for the Company for fiscal year 2011. In determining whether the proposal has received the requisite number of affirmative votes, an abstention will have the same effect as a vote against ratification.

Although the vote on proposal 4 (vote on executive compensation) is advisory in nature and non-binding, the affirmative vote of a majority of the shares present in person or represented by proxy at the meeting is required to approve the proposal. Broker non-votes will have no effect on the vote and abstentions will have the effect of a vote against approval of the proposal.

Although the vote on proposal 5 (vote on the frequency of votes on executive compensation) is advisory in nature and non-binding, the Company will treat the option selected by the affirmative vote of a majority of the shares present in person or represented by proxy at the meeting as the option approved by stockholders. Broker non-votes will have no effect on the vote and abstentions will have the effect of a vote against approval of the proposal.

PRINCIPAL BENEFICIAL OWNERS OF SHARES

The following table sets forth certain information with respect to all persons known to the Company to be the beneficial owner of more than 5% of its outstanding Common Stock as of April 1, 2011.

		Number of Shares				Percent
Name and Address of Beneficial Owner		Beneficially Owned				of Class
FMR LLC(1)			2,319,300				9.95	%
82 Devonshire Street Boston, MA 02109
BlackRock, Inc.(2)			1,920,322				8.24	%
40 East 52nd Street New York, NY 10022
Capital Research Global Investors(3)			1,395,600				5.99	%
333 South Hope Street Los Angeles, CA 90071
Wells Fargo & Company(4)			1,320,980				5.67	%
420 Montgomery Street San Francisco, CA 94104
Dimensional Fund Advisors LP(5)			1,279,625				5.49	%
Palisades West, Building One 6300 Bee Cave Road Austin, TX 78746
The Vanguard Group, Inc.(6)			1,172,408				5.03	%
100 Vanguard Boulevard Malvern, PA 19355

COMPANY PROPOSALS

PROPOSAL 1 — Election of Directors

Shares represented by properly executed proxies will be voted, unless such authority is withheld, for the election as directors of the Company of the following nine persons nominated by the Board, to hold office until the 2012 Annual Meeting of Stockholders and until their successors have been elected and qualified. Each of the nominees listed below was elected at the 2010 Annual Meeting of Stockholders.

If any nominee for any reason should become unavailable for election or if a vacancy should occur before the election (which events are not expected), the shares represented by the proxies will be voted for such other person, if any, as the Corporate Governance and Nominating Committee shall designate. Information regarding the nominees standing for election as directors is set forth below:

Nominees for Director

Pamela G. Bailey is 62, is Chair of the Corporate Governance and Nominating Committee, a member of the Compensation and Organization Committee, and has been a director since 2002.

Ms. Bailey has been President and Chief Executive Officer of The Grocery Manufacturers Association (“GMA”), a Washington, D.C. based trade association, since January 2009. From April 2005 until January 2009, she was President and Chief Executive Officer of the Personal Care Products Council. Ms. Bailey served as President and Chief Executive Officer of the Advanced Medical Technology Association (“AdvaMed”), the world’s largest association representing the medical technology industry, from June 1999 to April 2005. From 1970 to 1999, she served in the White House, the Department of Health and Human Services and other public and private organizations with responsibilities for health care public policy. Ms. Bailey is a director and compliance committee member and chair of the compensation committee of MedCath Corporation, a national provider of high acuity healthcare services. She formerly served as a director of Albertsons, Inc. and The National Food Laboratory, Inc., and as a member of the board of trustees of Franklin and Marshall College.

Ms. Bailey’s thirty-five years of healthcare public policy experience with public and private organizations including service in the White House, the Department of Health and Human Services, and as President and Chief Executive Officer of AdvaMed gives her a unique perspective on a variety of healthcare-related issues. With over ten years of managerial experience at GMA, the Personal Care Products Council and AdvaMed, Ms. Bailey brings to the Board demonstrated management ability at senior levels. This experience, together with her experience gained as a director of Albertsons and MedCath, support her continued service as a member of the Board.

Michael Dinkins is 57, is a member of the Audit Committee, a member of the Compensation and Organization Committee, and has been a director since 2008.

Mr. Dinkins has been the Executive Vice President and Chief Financial Officer of USI Insurance Services, an insurance intermediary company, since October 2008. From 2005 until 2008, he was Executive Vice President and Chief Financial Officer of Hilb Rogal & Hobbs Co., an insurance and risk management services company. Mr. Dinkins was Vice President, Global Control & Reengineering at Guidant Corporation from 2004 to 2005, and Vice President and Chief Financial Officer for NCR Worldwide Customer Service Operation from 2002 to 2004. Prior to 2002, he held senior positions at Access Worldwide Communications, Cadmus Communications Group and General Electric Company. Mr. Dinkins is a former director of LandAmerica Financial Group, Inc.

As Chief Financial Officer of USI, Hilb Rogal & Hobbs and NCR, Mr. Dinkins gained extensive knowledge of complex financial and operational issues facing large organizations and an understanding of operations and financial strategy in challenging environments. In addition, Mr. Dinkins is able to draw upon, among other things, his knowledge of the medical device industry gained while at Guidant where he led process re-engineering projects for operations and finance. This experience supports his continued service as a member of the Board.

Thomas J. Hook is 48, is a member of the Technology Development and Innovation Committee, and has been a director since 2006.

Mr. Hook has been the Company’s President and Chief Executive Officer since August 2006. Prior to August 2006, he was the Company’s Chief Operating Officer, a position to which he was appointed upon joining the Company in September 2004. From August 2002 until September 2004, Mr. Hook was employed by CTI Molecular Imaging where he served as President, CTI Solutions Group. From March 2000 to July 2002, he was General Manager, Functional and Molecular Imaging for General Electric Medical Systems. From 1997 to 2000, Mr. Hook worked for the Van Owen Group Acquisition Company and prior to that, Duracell, Inc. He is Chairman of the Board of HealthNow New York, Inc., a leading healthcare company in Western New York that provides quality healthcare services to companies and individuals in that region, and serves on its executive committee. Mr. Hook is also a director of AdvaMed.

Since joining the Company as Chief Operating Officer in 2004 and becoming President and Chief Executive Officer in 2006, Mr. Hook has directed the Company’s acquisition, integration and product development efforts, growing the business from $200 million to the more diverse $530 million medical device company that it is today. Mr. Hook’s knowledge of the Company’s business and his role as the Company’s President and Chief Executive Officer support his continued service as a member of the Board.

Kevin C. Melia is 63, is Chair of the Audit Committee, a member of the Technology Development and Innovation Committee, and has been a director since 2007.

Mr. Melia has been the non-executive Chairman of Vette Corporation, a privately-held provider of thermal management solutions, since June 2009. From 2003 to 2008, he was the non-executive Chairman of IONA Technologies PLC, a leading middleware software company. Between 2003 and November 2007, Mr. Melia also was the non-executive Chairman of A.Net (formerly Lightbridge, Inc.), an e-payment company. He was the co-founder of Manufacturers’ Services Ltd. (“MSL”), a leading company in the electronics manufacturing services industry, and served as its Chairman and Chief Executive Officer from June 1994 to January 2003. Prior to establishing MSL, Mr. Melia held a number of senior executive positions over a five-year period at Sun Microsystems, including Chief Financial Officer, president of its Sun Microsystems Computer Company subsidiary, and Senior Vice President of Operations. He also held a number of senior executive positions in operations and finance over a sixteen-year career at Digital Equipment Corporation. Mr. Melia is a Chartered Accountant and holds a joint diploma in Management Accounting from the Accounting Institutes of the U.K and Ireland. He is a director and audit committee member of RadiSys Corporation, a provider of embedded advanced solutions for the communications networking and commercial systems markets, a director and audit committee member of Analogic Corporation, a high-technology signal and imaging processing company, and a director and audit committee member of DCC Plc, a procurement, sales, marketing, distribution and business support services group headquartered in Dublin, Ireland. Mr. Melia also is a joint managing director of Boulder Brook Partners LLC, a private investment company and a member of the advisory board of C&S Wholesale Grocers. He is a former director of A.Net, Manugistic Corporation, and Eircom, Inc.

Having been a co-founder and Chairman and Chief Executive Officer of MSL and non-executive Chairman of Vette Corporation, IONA and A.Net, Mr. Melia has extensive business leadership experience. His service in senior management positions at Sun Microsystems and Digital Equipment Corporation provided him with broad knowledge in global operations and financial and accounting matters. The depth and breadth of Mr. Melia’s financial and manufacturing operations experience support his continued service as a member of the Board.

Dr. Joseph A. Miller, Jr. is 69, is Chair of the Technology Development and Innovation Committee, a member of the Corporate Governance and Nominating Committee, and has been a director since 2003.

Dr. Miller has been Executive Vice President and Chief Technology Officer for Corning, Inc. since 2002. Before joining Corning in 2001, he served as Senior Vice President of E.I. DuPont de Nemours from 1999 to 2001 and held various executive positions with that company prior to that time. Dr. Miller also serves on the board of directors of Dow Corning Corporation and serves on the corporate responsibility committee of that board.

Dr. Miller has significant research and development knowledge and experience gained through his positions at Corning and DuPont. His extensive knowledge and experience gives him insight into a number of issues facing the Company and supports his continued service as a member of the Board.

Bill R. Sanford is 67, is Chairman of the Board, is a member of the Corporate Governance and Nominating Committee, and has been a director since 2000.

Mr. Sanford is Chairman of Symark LLC, a company he founded in 1979 that focuses on the development and commercialization of biosciences systems, products and services. He is Executive Founder and retired Chairman, President and Chief Executive Officer of Steris Corporation, a global provider of infection and contamination prevention systems, products, services and technologies. Mr. Sanford serves on the board of directors of KeyCorp and on its executive, risk management and compliance committees. He is an active early and growth stage equity investor through Symark, and serves as a board member, executive and advisor of several private for-profit companies, not-for-profit organizations, investment limited partnerships and venture capital firms.

Mr. Sanford is an experienced entrepreneur, senior executive, consultant, investor and board member with extensive public company, new venture, merger and acquisition, marketing and sales, turnaround and market development experience. He has public and private company financing experience, including initial and secondary public stock offerings, structured debt financings, public stock mergers and private equity and venture capital investments. Mr. Sanford’s background and experience, including his substantial experience in the medical device industry, support his continued service as a member of the Board.

Peter H. Soderberg is 64, is Chair of the Compensation and Organization Committee, a member of the Audit Committee, and has been a director since 2002.

Mr. Soderberg is managing partner of Worthy Ventures Resources, LLC, a private investment company he founded in February 2010. He retired in January 2010 as President and Chief Executive Officer of Hill-Rom Holdings, Inc., a position he held since March 2006. Since his retirement, Mr. Soderberg has served as Hill-Rom’s Chief Innovation Officer on a part-time basis. From January 2000 to March 2006, he was President and Chief Executive Officer of Welch Allyn, Inc., and for the seven years prior to that, Chief Operating Officer of Welch Allyn’s medical products business. Mr. Soderberg also held a number of positions over a twenty-three year career with Johnson & Johnson, where his final position was as president of one of its operating subsidiaries. Until his retirement, he also had served on the board of directors of Hill-Rom (formerly Hillenbrand Industries) and AdvaMed. Mr. Soderberg is a former director of Constellation Brands, Inc. and Welch Allyn, Inc.

Having served in the roles of President and Chief Executive Officer of Hill-Rom and of Welch Allyn, Mr. Soderberg has significant management experience and business understanding. Running a public company gave Mr. Soderberg front-line exposure to many of the issues facing public companies, particularly on the operational, financial and corporate governance fronts. His deep knowledge of healthcare policy and patient care delivery, gained through his long career in the healthcare industry, provides our Board with a valuable perspective on the priorities of and challenges facing our major customers. These attributes support Mr. Soderberg’s continued service as a member of the Board.

William B. Summers, Jr. is 60, is a member of the Compensation and Organization Committee, a member of the Corporate Governance and Nominating Committee, and has been a director since 2001.

Mr. Summers retired in June 2006 as Chairman of McDonald Investments, Inc., a position he had held since 1998. He also held the additional positions of President (from 1989 through 1998) and Chief Executive Officer (from 1994 through 1998) of that investment company. Mr. Summers serves as lead outside director on the board of directors of RPM International, Inc. and is a member and chairman of its audit committee and a member of its executive committee, and on the board of directors of Developers Diversified Realty, Inc. and is a member of its audit and pricing committees. He also serves on the advisory boards of Molded Fiberglass Companies and MAI Wealth Advisors LLC. Mr. Summers also serves on the board of directors of The Rock and Roll Hall of Fame and Museum, Baldwin-Wallace College, and State Troopers of Ohio. He previously served as chairman of the board of the National Association of Securities Dealers, as chairman of the board of the NASDAQ Stock Market, and as a director of the New York Stock Exchange (“NYSE”).

Through his positions with McDonald Investments, Mr. Summers gained leadership experience and extensive knowledge of complex financial and operational issues. In addition, through his service with the NASDAQ Stock Market and the NYSE and on the boards of other public companies, Mr. Summers has gained valuable experience dealing with the capital markets, accounting principles and financial reporting rules and regulations, evaluating financial results and generally overseeing the financial reporting process of large public corporations. This experience supports Mr. Summers’ continued service as a member of the Board.

Dr. Helena S. Wisniewski is 61, is a member of the Technology Development and Innovation Committee, a member of the Audit Committee, and has been a director since 2008.

Dr. Wisniewski is Chairman and Chief Executive Officer of Equinox Toys, LLC, a company she founded in 2009 to develop innovative interactive toys for play and learning using biometrics. From August 2004 until October 2008, she served as Vice President, Research and Enterprise Development at the Stevens Institute of Technology. During that same period, Dr. Wisniewski also was Chief Executive Officer of Castle Point Holdings, Inc., a Stevens Institute-owned company that invested in technology companies. From 2001 through 2004, she was Chief Executive Officer and Chairman of Aurora Biometrics, a company she founded. Prior to that time, Dr. Wisniewski was a senior executive at Lockheed Corporation and a Vice President of Titan Corporation. She is a director of Smart Trax, Inc., an educational media company, and serves on the advisory boards of Soar Technology Inc., a company that develops cognitive software to solve complex problems in training, modeling and simulation, robotics, and medical informatics, and of Kulper and Company, LLC, where she chairs its research committee. Dr. Wisniewski is the former chairman of Attila Technologies, LLC, a provider of continuous broadband on-demand communication systems. She also is a former member of the Naval Research Advisory Committee, the senior scientific advisory group to the Secretary of the Navy.

As Vice President for Research and Enterprise Development at the Stevens Institute of Technology, Dr. Wisniewski led the Institute’s innovative research enterprises and launched technology startup companies. Through her service at Lockheed and Titan, Dr. Wisniewski gained management experience at senior levels. These attributes and her significant experience in leading and managing technology innovation and commercialization provides the Company valuable insight into developing new technologies to support future growth and supports Dr. Wisniewski’s continued service on the Board.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”
THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR

PROPOSAL 2 — Approval of the Adoption of the Greatbatch, Inc. 2011 Stock Incentive Plan

Stockholders are being asked to approve the Greatbatch, Inc. 2011 Stock Incentive Plan (the “2011 Plan”) which was adopted by the Board on February 28, 2011, subject to stockholder approval. If approved by stockholders, the 2011 Plan will supplement the Company’s existing 2005 and 2009 Stock Incentive Plans in providing stock-based incentive compensation to select employees, non-employee directors, consultants and service providers. As of April 15, 2011, 855,161 shares were available for award under the Company’s 2005 and 2009 Stock Incentive Plans, of which only 4,863 shares were available for award in the form of restricted stock, restricted stock units or stock bonuses under the respective plans’ sub-limits. The Company continues to focus on equity awards in the form of restricted stock units, thus no sub-limit for these types of awards was included in the 2011 Plan. The 2011 Plan was designed by the Compensation and Organization Committee (the “Compensation Committee”) with the assistance of management and an outside compensation consultant as part of a comprehensive compensation strategy to provide long-term incentive for employees and non-employees to contribute to the growth of the Company and attain specific performance goals. See the Long-Term Equity Awards section of the Compensation Discussion and Analysis (“CD&A”) in this proxy statement for further discussion.

Approval of the 2011 Plan will allow the Company to continue to award stock options, restricted stock, restricted stock units, stock appreciation rights and stock bonuses to employees and to non-employee directors, consultants and service providers. A stock option is the right to purchase a certain number of shares of stock, at a certain exercise price, in the future. A stock appreciation right is the right to receive the net of the market price of a share of stock and the exercise price of the right, in stock, in the future. Restricted stock is a share award conditioned upon continued employment, the passage of time and/or the achievement of performance objectives. A restricted stock unit is the right to receive a share of the Company’s stock in the future. A stock bonus is a bonus payable in shares of the Company’s stock. The purpose of these awards is to attract and retain talented employees and the services of select non-employees, further align employee and stockholder interests and closely link employee compensation with Company performance. If approved, the 2011 Plan will provide an essential component of the total compensation package offered to employees, reflecting the importance that the Company places on motivating superior results with long-term incentives.

The 2011 Plan also contains several features considered compensation and governance best practices. The 2011 Plan does not permit stock option re-pricing, the use of discounted options, the reloading of option grants, or the adding back of shares used to pay the exercise price of awards or to satisfy tax withholding obligations. Additionally, the 2011 Plan limits the term on options and stock appreciation rights to ten years, has vesting requirements on time and performance based full value awards of three years and one year, respectively, only allows accelerated vesting of awards upon the consummation of a change in control, and does not provide for the grant of dividend equivalents. The 2011 Plan contains no evergreen features that would provide for automatic replenishment of authorized shares and limits the number of stock options and stock appreciation rights that may be issued to any person in any fiscal year, other than those subject to attainment of specified performance criteria.

Key Terms - The following is a summary of the material features of the 2009 Plan, which is qualified by reference to the full text of the 2011 Plan, which is set forth as Exhibit A:

Plan Term:		February 28, 2011 to February 27, 2021.
Eligible Participants:		Employees of the Company (including employees who are also directors and prospective employees conditioned on their becoming employees), non-employee consultants or service providers and non-employee directors of the Company as the Compensation Committee designates from time to time. The Company has approximately 3,000 employees and eight non-employee directors who would be eligible to participate in the 2011 Plan.

Shares Authorized:		1,000,000, subject to adjustment only to reflect stock splits and similar events. Shares underlying awards that are forfeited, expire, cancelled or lapse become available for future grants. Shares used to pay the exercise price of a stock option and shares withheld to satisfy tax withholding obligations will not be available for future grants. When a stock settled stock appreciation right is exercised, the shares subject to a stock appreciation right grant agreement will be counted against the shares available for award as one share for every share subject thereto, regardless of the number of shares used to settle the stock appreciation right upon exercise.
Shares Authorized as a Percent of Outstanding Common Stock:		4.3%
Award Types:		(1)  Non-qualified and incentive stock option — the right to purchase a certain number of shares of stock, at a certain exercise price, in the future.
		(2)  Restricted stock — share award conditioned upon continued employment, the passage of time or the achievement of performance objectives.
		(3)  Restricted stock unit — the right to receive the market price of a share of stock, in stock in the future.
		(4)  Stock appreciation right — the right to receive the net of the market price of a share of stock and the exercise price of the right, in stock, in the future.
		(5)  Stock bonus — a bonus payable in shares of stock.
Award Terms:		Stock options and stock appreciation rights will have a term no longer than ten years. All awards made under the 2011 Plan may be subject to vesting and other contingencies as determined by the Compensation Committee and will be evidenced by agreements which set forth the terms and conditions of each award. The Compensation Committee, in its discretion, may accelerate or extend the period for the exercise or vesting of any awards.
Vesting:		Subject to certain exceptions set forth in the 2011 Plan, at least three years for time based awards of Restricted Stock or Restricted Stock Units and at least one year after grant for performance based awards of Restricted Stock and Restricted Stock Units. As determined by the Compensation Committee for Stock Options and SARs. The vesting of all awards is subject to acceleration upon certain events set forth in the 2011 Plan.
Not Permitted:		(1)  Granting stock options or stock appreciation rights at a price below market price on the date of grant.
		(2)  Repricing of a stock option or stock appreciation right without stockholder approval.
		(3)  Granting time-based stock options or stock appreciation rights to any one employee during any fiscal year in excess of 100,000 shares.

Tax Consequences — Stock option grants under the 2011 Plan may be intended to qualify as incentive stock options under Internal Revenue Code of 1986, as amended (“IRC”) §422 or may be non-qualified stock options governed by IRC §83. Generally, no federal income tax is payable by a participant upon the grant of a stock option and no deduction is taken by the Company. Under current tax laws, if a participant exercises a non-qualified stock option, he or she will have taxable income equal to the difference between the market price of the stock on the exercise date and the stock option grant price. The Company will be entitled to a corresponding deduction on its income tax return. A participant will have no taxable income upon exercising an incentive stock option if the shares received are held for the applicable holding periods (except that alternative minimum tax may apply), and the Company will receive no deduction when an incentive stock option is exercised. The Company may be entitled to a deduction in the case of a disposition of shares acquired under an incentive stock option that occurs before the applicable holding periods have been satisfied.

Restricted stock and restricted stock units are also governed by IRC §83. Generally, no taxes are due when the award is made, but the award becomes taxable when it is no longer subject to a “substantial risk of forfeiture” (i.e., becomes vested or transferable). Income tax is paid on the value of the stock or units at ordinary rates when the restrictions lapse, and then at capital gains rates when the shares are sold.

The grant of a stock appreciation right will not result in income for the participant or in a tax deduction for the Company. Upon the settlement of such a right, the participant will recognize ordinary income equal to the aggregate value of the payment received, and the Company generally will be entitled to a tax deduction in the same amount.

Awards granted under the 2011 Plan may qualify as “performance-based compensation” under IRC §162(m) and thus preserve federal income tax deductions by the Company with respect to annual compensation required to be taken into account under §162(m) that is in excess of $1 million and paid to one of the Company’s most highly compensated executive officers. To qualify, options and other awards must be granted under the 2011 Plan by a committee consisting of two or more “outside directors” (as defined under §162(m)) and time-based options and stock appreciation rights must satisfy the 2011 Plan’s limit on the total number of shares that may be awarded to any one participant during any calendar year. In addition, for awards other than time-based options and stock appreciation rights to qualify, the grant, issuance, vesting or retention of the award must be contingent upon satisfying one or more of the performance criteria, as established and certified by a committee consisting solely of two or more “outside directors.”

The foregoing is only a summary of the effect of federal income taxation on the participant and the Company under the 2011 Plan. It does not purport to be complete and does not discuss the tax consequences arising in the context of a participant’s death or the income tax laws of any municipality, state or foreign country in which the participant’s income may be taxable.

Transferability - Awards granted under the 2011 Plan generally are not transferable except by will or the laws of descent and distribution.

Administration - The Compensation Committee, which consists entirely of outside directors, will administer the 2011 Plan. The Compensation Committee will select the employees and non-employees who receive awards, determine the number of shares covered thereby, and, subject to the terms and limitations expressly set forth in the 2011 Plan, establish the terms, conditions and other provisions of the grants. The Compensation Committee may interpret the 2011 Plan and establish, amend and rescind any of its rules relating to the 2011 Plan, unless expressly prohibited in the 2011 Plan.

Amendments - The Board may, at any time, suspend or terminate the 2011 Plan or revise or amend it in any respect whatsoever; provided, however, that stockholder approval shall be required if and to the extent required by Securities Exchange Act Rule 16b-3 or by any comparable or successor exemption under which the Board believes it is appropriate for the 2011 Plan to qualify, or if and to the extent the Board determines that such approval is appropriate for purposes of satisfying IRC §162(m), §422 or §409A or any applicable rule or listing standard of any stock exchange, automated quotation system or similar organization. Nothing in the 2011 Plan restricts the Compensation Committee’s ability to exercise its discretionary authority to administer the plan, which discretion may be exercised without amendment to the 2011 Plan. No action may, without the consent of a participant, reduce the participant’s rights under any outstanding award.

Plan Awards — The Compensation Committee approved the annual long-term incentive program award of restricted stock units to senior level managers of the Company effective January 1, 2011 (the “2011 Awards”), which included the executive officers who are named in the Summary Compensation Table contained in this proxy statement (the “Named Executive Officers”). Currently, there are not enough shares available under the Company’s existing stock incentive plans to fund the entire 2011 Award. Thus, a portion of the 2011 Awards granted to Thomas J. Hook, President & CEO, as well as Thomas J. Mazza, Senior Vice President & CFO are subject to the approval of the 2011 Plan by the Company’s stockholders. The following table sets forth the number and approximate grant date fair value of the 2011 Awards pending issuance:

		Restricted Stock Units
		Number of				Grant Date Fair
Name		Units (#)				Value ($)
Thomas J. Hook			72,913			$	1,243,896
Thomas J. Mazza			24,352				415,445

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”
THE APPROVAL OF THE ADOPTION OF THE GREATBATCH, INC. 2011 STOCK INCENTIVE PLAN

EQUITY COMPENSATION PLAN INFORMATION

The following table provides information regarding the Company’s equity compensation plans:

Number of securities

remaining available for

future issuance under

Number of securities to

Weighted-average

equity compensation

be issued upon exercise of

exercise price of

plans (excluding

Plan Category

outstanding options,

outstanding options,

securities reflected in

(As of December 31, 2010)

warrants and rights

warrants and rights

column (a))

( a )

( b )

( c )(2)

Equity compensation plans approved by security holders (1)

2,550,234

$

23.53

1,104,956

Equity compensation plan not approved by security holders

—

—

—

Total

2,550,234

$

23.53

1,104,956

PROPOSAL 3 — Ratification of the Appointment of Independent Registered Public Accounting Firm

On the recommendation of the Audit Committee, Deloitte & Touche has been appointed by the Board as the Company’s independent registered public accounting firm for fiscal year 2011, a capacity in which it has served since 2000. Although stockholder approval is not required, the Company has determined that it is desirable to request that the stockholders ratify the appointment of Deloitte & Touche as the Company’s independent registered public accounting firm for fiscal year 2011. In the event the stockholders fail to ratify the appointment, the Board will reconsider this appointment and make such a determination as it believes to be in the Company’s best interests. Even if the appointment is ratified, the Board, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Board determines that such a change would be in the Company’s best interests. Representatives of Deloitte & Touche are expected to be present at the Annual Meeting. The representatives may, if they wish, make a statement and, it is expected, will be available to respond to appropriate questions.

Audit Fees. The following table sets forth the aggregate fees billed by Deloitte & Touche for services provided to the Company during fiscal years 2010 and 2009:

		2010				2009
Audit Fees(1)		$	1,229,250			$	1,309,962
Audit-Related Fees			—				—
Total Audit and Audit-Related Fees			1,229,250				1,309,962
Tax Fees(2)			—				2,000
All Other Fees			—				—
Total Fees		$	1,229,250			$	1,311,962

Audit Committee Pre-Approval Policy on Audit and Non-Audit Services. As described in the Audit Committee charter, the Audit Committee must review and pre-approve both audit and non-audit services to be provided by the Company’s independent registered public accounting firm (other than with respect to de minimis exceptions permitted by Regulation S-X, Rule 2-01(c)(7)(i)(c)). This duty may be delegated to one or more designated members of the Audit Committee with any such pre-approval reported to the Audit Committee at its next regularly scheduled meeting. None of the services described above provided by Deloitte & Touche were approved by the Audit Committee under the de minimis exception rule.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY’S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2011

PROPOSAL 4 — Advisory Vote on Compensation of the Named Executive Officers

In accordance with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and the related rules of the Securities and Exchange Commission (“SEC”), the Company seeks your advisory vote on a resolution to approve the compensation of our Named Executive Officers as disclosed in this proxy statement. Because your vote is advisory it will not be binding on the Board or the Company. However, the Board will review the voting results and take them into consideration when making future decisions regarding executive compensation.

The Company has in the past sought approval from stockholders regarding the incentive plans that we use to motivate, retain, and reward our executives. The Company’s executive compensation programs have played a material role in our ability to drive strong financial results and attract and retain a highly experienced, successful team to manage our Company. We believe that our executive compensation programs are structured in the best manner possible to support the Company and our business objectives. We closely monitor the compensation programs and pay levels of executives from companies of similar size and complexity so that we may ensure that our compensation programs are within the norm of a range of market practices. As discussed below in the CD&A section, the Company’s compensation philosophy for its Named Executive Officers includes the following elements:

•		Long-term equity compensation with multi-year performance based vesting. The most significant element of the Company’s Named Executive Officers equity compensation opportunity is the Long-Term Incentive program, for which vesting depends on the Company’s total stockholder return relative to its peer group over a three-year period.
•		Total cash compensation tied to performance. The total cash compensation opportunity is based on Company and individual performance. The cash compensation of the Company’s Named Executive Officers has fluctuated from year to year, reflecting the Company’s financial results.

The text of the resolution in respect of Proposal 4 is as follows:

“Resolved, that the stockholders approve, on a non-binding basis, the compensation of the Company’s Named Executive Officers as disclosed in this Proxy Statement.”

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” APPROVAL OF
THE COMPANY’S COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

PROPOSAL 5 — Advisory Vote on the Frequency of the Advisory Vote on Compensation of the Named Executive Officers

In accordance with the requirements of the Dodd-Frank Act and the related rules of the SEC, the Company seeks your advisory vote on a resolution to approve the frequency of future stockholder advisory votes on the compensation of our Named Executive Officers. In particular, we are asking whether the advisory vote should occur every one, two or three years, or whether you abstain.

A stockholder advisory vote on executive compensation is very important to the Company. We appreciate the past approval of our incentive pay plans by our stockholders. An annual stockholder vote will enhance stockholder communication by providing a clear, simple means for the Company to obtain information on investor sentiment about our executive compensation programs. The Company believes that an advisory vote every year will be the most effective timeframe for the Company to respond to stockholders’ feedback and provide the Company with an opportunity to engage with stockholders to understand and respond to voting results. The text of the resolution in respect of Proposal 5 is as follows:

“Resolved, that the stockholders approve, on a non-binding basis, whether the frequency with which a non-binding stockholder vote to approve the compensation of the Company’s Named Executive Officers should occur every one, two or three years, or abstain.”

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR A FREQUENCY OF
“ONE YEAR” FOR FUTURE NON-BINDING STOCKHOLDER VOTES TO APPROVE THE COMPENSATION
OF OUR NAMED EXECUTIVE OFFICERS

STOCK OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS

Direct and indirect ownership of Common Stock by each of the directors, each of the Named Executive Officers, and by all directors and executive officers as a group is set forth in the following table as of April 1, 2011, together with the percentage of total shares outstanding represented by such ownership. For purposes of this table, beneficial ownership has been determined in accordance with the provisions of Rule 13d-3 under the Securities Exchange Act, under which, in general, a person is deemed to be the beneficial owner of a security if that person has or shares the power to vote or to direct the voting of the security or the power to dispose or to direct the disposition of the security, or if he or she has the right to acquire the beneficial ownership of the security within 60 days.

Name of Beneficial Owner		Number of Shares				Percent of Class
Pamela G. Bailey(1)			62,982				*
Michael Dinkins(2)			28,661				*
Thomas J. Hook(3)			419,880				1.78	%
Kevin C. Melia(4)			43,452				*
Dr. Joseph A. Miller, Jr.(5)			55,866				*
Bill R. Sanford(6)			109,263				*
Peter H. Soderberg(7)			61,946				*

Name of Beneficial Owner		Number of Shares				Percent of Class
William B. Summers, Jr.(8)			72,524				*
Dr. Helena S. Wisniewski(9)			37,413				*
Thomas J. Mazza(10)			96,538				*
Mauricio Arellano(11)			86,200				*
Susan M. Bratton(12)			150,730				*
Michelle Graham (13)			—				—
All Directors and Executive Officers as a group (14 persons)			1,259,968				5.21	%

Section 16(a) Beneficial Ownership Reporting Compliance. Under Section 16(a) of the Exchange Act, the Company’s directors and officers are required to report their beneficial ownership of the Common Stock and any changes in that beneficial ownership to the SEC and the NYSE. The Company believes that these filing requirements were satisfied by its directors and officers during 2010, except that due to a clerical error, Ms. Bratton was late in reporting the sale of shares in connection with the vesting of an award of restricted stock. In making the foregoing statement, the Company has relied on copies of the reporting forms received by it or on the written representations from such reporting persons.

EXECUTIVE COMPENSATION
Compensation Discussion and Analysis

Overview

The compensation programs for our senior level managers, which includes the Named Executive Officers, are designed to be consistent with our compensation philosophy. Our philosophy is to provide compensation that is competitive, encourages executives to act in the best interest of our stockholders, and strikes a proper balance between risk and our performance. Based upon this philosophy, we designed our compensation programs to include fixed cash and equity-based compensation at the targeted competitive market median rate and performance or “at risk” cash and equity-based compensation at above competitive market median rates if above competitive market median performance is achieved. We believe that paying above competitive market median compensation for above competitive market median performance is important in order to attract, retain and properly incentivize senior level management and should provide value to our stockholders through a higher level of stock price.

Our compensation programs are designed by our Compensation Committee in collaboration with management and input from an independent compensation consultant hired by the Compensation Committee, and approved by our Board. Our compensation programs consist of the following:

	•		Base Salary
	•		Annual Cash Incentives
	•		Long-Term Equity Awards
	•		Retirement and Change of Control Agreements
	•		Other Personal Benefits

As illustrated in the graphs below, we believe that performance and equity-based compensation should increase as a percentage of total direct compensation as salary grade levels and responsibility increases. We target our Named Executive Officer’s total cash and direct compensation to be consistent with our competitive market. By following this philosophy, we believe we can attract and retain executives who have the appropriate skill set to carry out our strategic plans and attain both our short and long term financial and strategic goals.

The following graphs depict the mix of cash versus equity compensation as a percentage of total direct compensation granted to our Named Executive Officers during 2010 assuming maximum performance levels are achieved:

Consistent with our compensation philosophy, we believe that our compensation programs for senior level managers, including the Named Executive Officers, should have a significant amount of compensation that is “at risk,” which serves to better align the interests of management with those of our stockholders. To accomplish this, our compensation programs include both short and long-term performance incentive programs. Our long-term incentive programs cover a three-year performance period.

The following graph depicts total direct compensation received by our Named Executive Officers, who were employed at that time, versus the value granted for fiscal years 2007 to 2009, excluding retention equity awards, and illustrates the significant impact that our performance-based programs can have on the compensation levels of our Named Executive Officers. Fiscal years 2009 and 2010 were the last years of the three-year performance periods for our SALT Program performance-based long-term equity awards granted in 2007 and 2008. The performance metrics for the 2008 SALT Program awards were only achieved at 28% of target and 0% for the 2007 awards. Additionally, we currently expect to only achieve 25% of the 2009 performance metrics (in thousands):

Total Direct Compensation of Named Executive Officers

In 2010, our Board approved a new long-term incentive equity compensation program (“LTI Program”) for senior level managers, including our Named Executive Officers, which replaced existing long-term equity compensation plans. The objective of the LTI Program is to better align our compensation programs with stockholder interests and our competitive market, as well as to adopt a number of current best practices with regards to equity compensation programs. This includes increasing the percentage of performance and equity-based compensation as a percentage of total direct compensation; issuing equity performance-based compensation in performance shares; and tying equity performance-based awards to total stockholder return (“TSR”) relative to our peer group. See further discussion of our competitive market, including our peer group, under “Competitive Market Review” and the LTI Program under “Long-Term Equity Awards.” Additionally, in conjunction with his employment agreement renewal and based upon his performance and strategic accomplishments over the last four years, in 2010, our Board approved an increase to the award percentages under the Company’s annual cash and long-term equity award programs for our President & CEO Thomas J. Hook. These accomplishments include, among other things, developing and making significant progress towards implementing our long-term strategic plan, including transitioning the Company from being an innovative component manufacturer to being an innovative medical device company.

The following graphs depict the mix of time (or fixed) versus performance (or variable) based compensation as a percentage of total direct compensation granted to our Named Executive Officers during 2010 assuming maximum performance levels are achieved:

Other than as discussed, we do not believe the compensation for our Named Executive Officers in 2011 will change materially from 2010.

Compensation Committee Practices and Procedures

The Compensation Committee, in collaboration with management, is responsible for the design and administration of our compensation programs with appropriate approval and general oversight from the Board. This responsibility includes the determination of compensation levels and awards provided to the Named Executive Officers. The Compensation Committee directly engages Ernst & Young LLP to independently advise them on compensation matters and recommendations made by management. A representative of Ernst & Young was present in person or by telephone for all six meetings held by the Compensation Committee during 2010.

The Compensation Committee is also responsible for recommending to the Board for approval the performance and compensation adjustments for Mr. Hook, our President & Chief Executive Officer. For the remaining Named Executive Officers, Mr. Hook makes recommendations regarding performance and merit adjustments to the Compensation Committee for approval. Grants of equity-based compensation are recommended by management and approved by the Compensation Committee in accordance with approved long-term incentive programs established by the Compensation Committee with the assistance of Ernst & Young.

During 2010, Mr. Hook, Thomas J. Mazza, Senior Vice President & Chief Financial Officer, Barbara M. Davis, then Vice President of Human Resources and Timothy G. McEvoy, Vice President, General Counsel & Secretary, attended meetings of the Compensation Committee to provide counsel and assistance to the Compensation Committee. These executives were not present during executive sessions and when items pertaining to their individual compensation were discussed.

Competitive Market Review

When determining compensation levels and programs, the Compensation Committee compares our programs and performance against a peer group of companies. The peer group currently consists of fourteen publicly traded companies that are similar in size and operate in similar industries and with whom we may compete for executive talent. The Compensation Committee typically reevaluates the peer group every two to three years or sooner if an event, such as an acquisition, no longer makes the companies in the peer group comparable to our Company.

The companies comprising our compensation peer group, which was last updated in 2009, are:

Analogic Corporation		ResMed Inc.
CONMED Corporation		SonoSite, Inc.
CTS Corporation		Symmetry Medical, Inc.
Edwards Lifesciences Corp.		Thoratec Corporation
Integra LifeSciences Holdings Corp.		West Pharmaceutical
Merit Medical Systems, Inc.		Wright Medical Group, Inc.
Orthofix International		ZOLL Medical Corporation

In 2010, EV3, Inc. was removed from the peer group because it was acquired during that year.

We believe that this is an appropriate size for a peer group in order to get a representative sample of our market, yet keeping the size of the peer group at a manageable level for analysis purposes. We believe these companies (i) have relevant overlap with our industry, customers and products, (ii) are similar in size and (iii) have key metrics that are consistent with our growth strategy. The key metrics considered included revenue size and growth rate, return on equity, net income, earnings per share (“EPS”) growth, average gross margins and enterprise value.

Our 2010 compensation packages were based in part on a 2009 market study performed by Ernst & Young which utilized compensation peer group data supplemented by market survey data and adjusted for factors such as prior individual performance and expected future contributions, performance of our Company, internal equity within our Company and the degree of difficulty in replacing the individual. Prior to this, the last market study was performed in 2008. The 2009 market study, which provided base salary, total cash compensation and total direct compensation analysis, utilized proxy data of our peer group from 2006 to 2008 and survey data from the following sources:

Title		Publisher		Year
Executive Compensation Assessor		Economic Research Institute		2009
U.S. Executive Survey Report		Mercer HR Consulting		2008
Top Management Compensation		Watson Wyatt Data Services		2008-2009

The proxy and survey data were trended to 2010 levels based upon an annual increase factor of 2.9% as obtained from a WorldatWork survey. In determining recommended compensation levels, the Ernst & Young analysis also utilized various analytical tools, including total remuneration analysis and tally sheets, which provide a summary of the total compensation (cash, equity, benefits and perquisites) provided to the Named Executive Officers, as well as the impact of the Company’s performance on compensation. In 2008, internal pay equity analysis and equity wealth accumulation and sensitivity analysis were also performed. The Compensation Committee has determined that, absent a meaningful change in circumstances, these tools should be utilized on a periodic, as opposed to an annual, basis. In making final compensation decisions, the Compensation Committee considers all of these analyses.

The Compensation Committee sets the performance goals for annual cash incentives and long-term equity programs based upon the current year and long-range plan of our Company. Our current year and long-range plan takes into consideration the performance of our largest customers supplemented by performance information of our peer group, as well as relevant market indices. We believe the performance of our largest customers should be considered since they account for a large percentage of our sales. The market indices considered include the revenue growth rates of our largest markets (Cardiac Rhythm Management, Vascular Access, Orthopaedic and Energy (as a proxy for our Electrochem Solutions segment)).

Base Salary

We provide our senior level managers with a fixed level of cash compensation in the form of base salary that is consistent with their skill level, experience, knowledge, length of service with our Company and the level of responsibility and complexity of their position. The target salary for our senior level managers is based in part on the competitive market median of our compensation peer group, supplemented by published survey data. Our general practice is to be within 90% to 110% of the competitive market median. In addition to the factors listed above, actual base salaries may differ from the competitive market median target as a result of various other factors including prior individual performance and expected future contributions, performance of our Company, internal pay equity within our Company and the degree of difficulty in replacing the individual. Any such differences are approved by the Compensation Committee and in the case of Mr. Hook, by the Board. The base salaries of our Named Executive Officers are reviewed by the Compensation Committee on an annual basis, as well as at the time of promotion or significant changes in responsibility. We expect the base salaries of our Named Executive Officers to generally increase in-line with any increases to the median competitive market rates. The base salaries for our Named Executive Officers were as follows:

														2010 Base
														Salary as a %
		2008				2009				2010				of Competitive				2011
		Base Salary				Base Salary				Base Salary				Market Median				Base Salary
Thomas J. Hook		$	475,000			$	491,600			$	525,000				105	%		$	546,000
Thomas J. Mazza			262,200				271,500				290,000				97	%			301,600
Mauricio Arellano			248,800				267,500				285,000				98	%			325,000	(2)
Susan M. Bratton			241,700				250,200				265,000				91	%			275,600
Michelle Graham(1)		NA				NA					250,000				86	%			250,000
Susan H. Campbell (3)			248,800				267,500				280,000				96	%		NA

2010 base salaries were based in part upon the compensation study performed by Ernst & Young as discussed above. Additionally, these salaries reflect the accomplishments of our Named Executive Officers during 2009, which included the successful consolidation of five facilities; conversion of four facilities onto the Oracle ERP system; 7% increase in CRM and Neuromodulation revenue; achievement of our 12% adjusted operating margin goal; deepening customer relationships; and furthering the Company’s technology initiatives, including the development of “system” level products for our customers. In addition to these accomplishments, the increase for Mr. Hook took into consideration and was determined in conjunction with the negotiations of his new employment agreement in April 2010.

For 2011, base salaries for the Named Executive Officers, except Mauricio Arellano and Michelle Graham, were increased by 4%. We believe this reflects the solid performance of our Company over the past year and is a reasonable market increase for companies with similar performance to ours. The salary increase provided to Mr. Arellano for 2011 took into consideration his promotion to President of our Greatbatch Medical segment.

Annual Cash Incentives

Overview. The payment of annual cash incentives for senior level managers, including our Named Executive Officers, is formula-based and is governed by our Short-Term Incentive Compensation Program (“STIC Program”). The objective of the STIC Program is to provide a target level of cash compensation that is based upon the achievement of internal performance metrics with the opportunity for above median compensation for above median performance.

STIC Program awards for the Named Executive Officers are based upon Company-wide performance goals. For other senior level managers, STIC Program awards are primarily based upon a combination of the achievement of Business Unit goals and Company-wide performance goals ranging from 0% to 100%. As a result, this component of compensation can vary from year to year.

STIC Program awards are calculated based upon the following formulas:

Total Available Award (TAA) = (Base Salary x Individual STIC %) x STIC Funding %

Actual Award = ((TAA x 75%) x Individual Performance %) + (TAA x 25%)

An associate’s Individual Performance % impacts 75% of the STIC Program award. The Named Executive Officers Individual Performance % is based upon the overall Company performance metrics (same as STIC Funding %). For senior level managers other than the Named Executive Officers, the Individual Performance % is based upon the performance of the respective employee’s Business Unit. In general, we believe that the higher the salary grade of an employee, the more the Individual Performance % should be based upon the performance of the overall Company. The remaining 25% of the STIC Program award is based upon the STIC Funding %.

STIC Funding %. Overall funding of the STIC Program is based upon a Company performance measure as recommended by the Compensation Committee and approved by the Board at its first meeting each year. Funding of the STIC Program is calculated in accordance with the following scale:

Achievement of Performance Measure		Funding %
Less than Threshold		0%
Threshold — 100%		50% - 100%
100% — Maximum		100% - 200%

For 2008 and 2009, the STIC Program funding performance measure was adjusted EPS. Adjusted EPS was selected because of its direct correlation with the interests of our stockholders. In establishing this measure, the Compensation Committee considered the respective year’s budget, three-year compound annual growth rate, and how that growth rate compared to our competitive market. Achievement at the 100% target level was deemed to be a “realistic” goal and any amount greater than the target was believed to be a “stretch” goal. For 2008 and 2009, the STIC Program was funded as follows:

		2008		2009
Adjusted EPS Threshold/Target/Maximum		$1.09/$1.46/$1.94		$1.26/$1.68/$2.23
Adjusted EPS Actual		$1.49		$1.52
STIC Funding %		106%		81%

For 2010, the STIC Program funding percentage was based upon two internal financial metrics, total revenue (40%) and adjusted operating income (60%), which are measured independently from each other. Thus, if one metric is not achieved, a portion of the STIC Program may still be funded if the second metric is achieved. The Compensation Committee principally made this change to provide performance metrics that are more controllable by the broad group of managers to which the STIC Program applies. The Compensation Committee also believes that these metrics are more aligned with the Company’s strategic objective of growing revenue and profitability. Achieving a STIC funding percentage of 100% is expected to be more difficult under the new program given that there are two metrics to be achieved.

For 2010, the STIC Program was funded as follows:

		2010
		Revenue (40%)		Adjusted OI (60%)
Threshold/Target/Maximum		$520M/$550M/$580M		$59M/$71M/$83M
Actual		$533.4M		$64.9M
Actual % of Target Achieved		72.3%		74.8%
Weighted Average STIC Funding %		73.8%

Adjusted amounts differ from those calculated under generally accepted accounting principles (“GAAP”) primarily as a result of the exclusion of: (i) acquisition-related charges, (ii) facility consolidation, manufacturing transfer and system integration charges, (iii) asset write-down and disposition charges, (iv) severance charges in connection with corporate realignments or a general reduction in force (v) litigation charges and gains, (vi) the impact of non-cash charges to interest expense due to the accounting change governing convertible debt, (vii) unusual or infrequently occurring items and (viii) the income tax (benefit) related to these adjustments, all of which were not included in the original STIC target measures. All of these adjustments were reviewed and approved by the Compensation Committee. See “Strategic and Financial Overview” in Item 7 of our 2010 Form 10-K for a reconciliation of adjusted amounts to GAAP.

Individual STIC %. Individual cash incentives are calculated by multiplying the funding percentage by the individual’s target payout. The individual target payout was determined by the Compensation Committee in order to provide targeted total cash compensation (base salary + cash incentive) at the median of our competitive market. The target payout as a percentage of base salary for our Named Executive Officers is as follows:

		2008				2009				2010				2011
President & CEO			80	%			80	%			85	%(1)			85	%
CFO			70	%			70	%			70	%			70	%
Mauricio Arellano			65	%			65	%			65	%			70	%(1)
Susan M. Bratton			65	%			65	%			65	%			65	%
Michelle Graham(2)		NA				NA				NA					65	%
Susan H. Campbell(3)			65	%			65	%			65	%		NA

Illustrative Computation of 2010 STIC Award for Thomas J. Hook:

TAA = (Base Salary ($525,000) x Individual STIC % (85%)) x STIC Funding % (73.8%) = $329,288

The STIC Program for our Named Executive Officers was approved by our stockholders in 2007 and meets the requirements for an income tax deduction under IRC §162(m). Under IRC §162(m), a limitation is placed on the tax deductibility of compensation to certain executives of a publicly-held corporation that exceeds $1,000,000 in any taxable year, unless the compensation meets certain requirements. Currently, our STIC Program is designed to meet these requirements. Historically, our deductions for executive compensation were not limited by IRC §162(m), except in isolated circumstances.

For 2011, the weighting of the STIC Program metrics were changed so that funding is based 75% (vs. 60%) on adjusted operating income and 25% (vs. 40%) on total revenue. This change was made to put more emphasis on profitable growth and as the adjusted operating income metric is believed to be more directly controlled by management.

Long-Term Equity Awards

Overview. In addition to cash incentives, we also compensate senior level managers, including our Named Executive Officers, with long-term equity awards. These awards are designed to align management’s performance with the interests of our stockholders. Additionally, they are used as a recruiting and retention tool. Historically, we granted equity awards under various existing equity compensation plans, including the following: (i) the 1997 Stock Option Plan; (ii) the 1998 Stock Option Plan; (iii) the 2002 Restricted Stock Plan; (iv) the 2005 Stock Incentive Plan; and (v) the 2009 Stock Incentive Plan. The 1997 Stock Option Plan, the 1998 Stock Option Plan, and the 2002 Restricted Stock Plan have all been frozen for new stock award issuances.

Currently, there are not enough shares available under our stock incentive plans to completely fund our 2011 long-term equity award programs. Accordingly, a proposal has been submitted to stockholders in this proxy statement to approve the 2011 Stock Incentive Plan which allows for the grant of 1,000,000 stock-based awards. The 2011 Plan was designed by the Compensation Committee, with the assistance of management and reviewed by Ernst & Young. In determining the amount of shares under this plan, we considered the historical burn-rate of the Company’s equity compensation plans, the potential dilution and shareholder value transfer as a result of this plan and the one-year and three-year TSR of the Company. These metrics were compared to our industry and peer group and are often used by institutional investors when analyzing our plans.

Our equity-based compensation plans and awards are designed and administered by the Compensation Committee in collaboration with management and subject to the approval of our Board. Historically, we have granted employees equity-based compensation in the form of non-qualified and incentive stock options, restricted stock and restricted stock units. The LTI Program awards are granted in December of every year. The Board typically meets five times per year based upon a schedule determined several months in advance. Accordingly, the proximity of any awards to earnings announcements or the release of material non-public information would be coincidental. All stock options are issued with strike prices that are equal to the value of our closing stock price on the grant date.

Except as described in the “Employment Agreement” and “Retirement and Change of Control Agreements” sections, all unvested equity awards expire upon termination of employment. Upon termination of employment, other than for cause, all vested stock-based awards expire at various times following the event, up to ninety days, based upon the reason for termination and the terms of the equity plan they were awarded from. Upon termination for cause, all outstanding stock-based awards expire immediately.

Upon termination of employment due to death or disability, all vested stock-based awards expire at various times following the event, up to one year, based upon the terms of the equity plan they were awarded from. Upon termination of employment due to death or disability, the Compensation Committee has discretion on whether or not to vest all unvested stock-based awards. Upon the death of Ms. Campbell in September 2010, the Compensation Committee vested all time-based equity awards and a pro rata share of her unvested performance-based equity awards based upon the expected vesting percentages of those awards at the time of her passing. This decision was made taking into consideration Ms Campbell’s seven years of service to the Company, her accomplishments and contributions to the Company during that time as well as to reduce the hardship of her passing on her family.

In the event of a change of control, all unvested equity awards immediately vest, unless determined otherwise by the Compensation Committee. See further discussion regarding change of control benefits in the “Change of Control Agreements” section.

We believe that majority of our compensation expense arising from stock options granted under the 2005 and 2009 Stock Incentive Plans is deductible for tax purposes and not limited by IRC §162(m). Our deductions for time-based restricted stock and restricted stock units may be limited in the future under IRC §162(m) primarily due to the timing of vesting. The Compensation Committee considers the potential non-deductibility of stock incentive awards under IRC §162(m) when setting award levels. The Compensation Committee believes that our equity programs are properly designed for the retention and incentivizing of senior management, which is in the best interest of stockholders even if IRC §162(m) limits are periodically exceeded and the tax deductions are limited.

In 2010, the Board approved the LTI Program for senior level managers, including our Named Executive Officers, which replaced the Long-Term Incentive Award Program (“LTIP Program”) and Supplemental Annual Long-Term Incentive Award Program (“SALT Program”). The LTI Program has both a time and performance based component similar to the LTIP and SALT Programs and includes a number of current “best” practices with regards to equity compensation programs. In reviewing potential redesign, we looked at both qualitative and quantitative data from our peer group as well as other survey sources including a market study performed by Fred W. Cook & Co. of the 250 largest U.S. companies in the S&P 500, James F. Reda & Associates on the 191 largest companies in the S&P 500, the Corporate Executive Board (2007), and Equilar, Inc. on Fortune 250 companies (2009), among others. See further discussion under the “LTI Program” section.

In addition to the LTI Program awards, all managers and above are eligible for equity award grants at the time of hire, upon promotion and for special recognition or significant changes in responsibility. Equity awards issued for recognition or newly hired or newly promoted employees are typically granted at the next scheduled Board meeting following the event date.

LTI Program. The LTI Program includes both a time and performance based award. The objective of the time-based portion of the LTI Program is to provide total direct compensation, when combined with the executive’s base salary and STIC Program award at target, at the 25^th to 35^th percentile of our competitive market. The objective of the performance-based portion of the LTI Program is to provide a supplemental award that targets total direct compensation at the 60^th percentile of our competitive market and the 75^th percentile if the maximum performance level is achieved.

The Maximum Award that can be earned under the LTI Program is expressed as a percentage of the Named Executive Officers’ salary as follows:

		2010				2011
President & CEO			430	%			430	%
CFO			260	%			260	%
Mauricio Arellano			230	%			260	%(1)
Susan M. Bratton			230	%			230	%
Michelle Graham(2)		NA					230	%
Susan H. Campbell(3)			230	%		NA

The time-based portion of the 2010 LTI Program awards, which was granted one-half in non-qualified stock options and one-half in restricted stock units, was determined based upon the following formula:

Maximum Time Award (MTA) = (Base Salary x Individual Maximum Award %) x 25%

Non-Qualified Stock Option Grant = (MTA x ¹/2) ÷ Grant Date Black-Scholes Value ⁽¹⁾

Restricted Stock Unit Grant = (MTA x ¹/2) ÷ Grant Date Closing Stock Price

The time-based portion of the LTI Program awards vest in three equal annual installments on the last day of each fiscal year, beginning in the year of grant. Beginning in 2011, the time-based portion of the LTI Program awards will be issued in stock options only. This decision was made in order to provide more of a balance between the amount of stock options and full-value awards provided to senior management and to better align their interests with those of shareholders. The maximum performance-based portion of the LTI Program awards, which is granted 100% in restricted stock units, will be determined based upon the following formula:

Maximum Performance Award (MPA) = (Base Salary x Individual Maximum Award %) x 75%

Restricted Stock Unit Grant = MPA ÷ Grant Date Closing Stock Price

The performance metric for these awards is TSR relative to our peer group for a three-year performance period. Relative TSR was selected as that was the metric the Compensation Committee believed most closely aligns the interests of management with those of stockholders without incentivizing excess risk taking and is a key indicator of value creation for investors. LTI performance awards will vest at the end of the three-year performance period as follows:

TSR Performance Rank		Vesting Amount
25th Percentile		5.3% of MPA (Threshold Shares)
25th Percentile — 75th Percentile		Linear calculation between Threshold and Maximum Shares
75th Percentile and above		100% of MPA (Maximum Shares)

Illustrative Computation of 2010 LTI Program Award for Thomas J. Hook:

Maximum Time Award (MTA) = ($525,000 x 430 %) x 25% = $564,375

Non-Qualified Stock Option Grant = ($564,325 x ¹/2) ÷ $8.218 = 34,337 stock options

Restricted Stock Unit Grant = (($564,325 x ¹/2) ÷ $20.84 = 13,540 restricted stock units

Maximum Performance Award (MPA) = (($525,000 x 430 %) x 75% = $1,693,125

Restricted Stock Unit Grant = $1,693,125 ÷ $20.84 = 81,244 restricted stock units

Threshold Performance Award (TPA) = (($525,000 x 430 %) x 4% = $90,300

Restricted Stock Unit Grant = $90,300 ÷ $20.84 = 4,333 restricted stock units

LTIP Program. Prior to 2010, the LTIP Program provided our senior level managers, including our Named Executive Officers, a fixed level of equity-based compensation at the median of our competitive market. The LTIP Program awards were granted in the form of one-half non-qualified stock options and one-half restricted stock units. The target grant of LTIP Program equity awards as a percentage of base salary for our Named Executive Officers who were employed by us at that time is as follows:

		2008				2009
President & CEO			150	%			150	%
CFO			80	%			80	%
Other Named Executive Officers			70	%			70	%

The LTIP Program stock option awards vest over four years, 25% at the end of each year, including the year of grant. The LTIP Program restricted stock unit awards vest 50% at the end of the second year, including the year of grant and 25% at the end of the third and fourth years.

SALT Program. Prior to 2010, the SALT Program provided our senior level managers with a supplemental award that targeted total direct compensation up to the 75^th percentile of our competitive market if 75^th percentile performance goals, set at the beginning of the period, are met. The SALT Program awards were granted in the form of non-qualified stock options. The SALT Program equity awards expressed as a percentage of base salary for our Named Executive Officers who were employed by us at that time is as follows:

		2008				2009
President & CEO			175	%			175	%
CFO			85	%			85	%
Other Named Executive Officers			70	%			70	%

The Compensation Committee set the performance goals for SALT Program awards based upon our long-range financial plan. These performance targets were set with the intent that they would represent stretch goals and would result in upper quartile performance relative to our customers and peers. Achievement of these targets was believed to be a challenging goal. Additionally, even if the targets are achieved they continue to incentivize management since the award were in the form of stock options. The only way an employee receives value from a stock option is if the Company’s stock price, which is heavily dependent on the performance of our Company, remains above the options’ exercise price. Thus, stock options align the goals of management with those of our stockholders.

The SALT Program performance measures are subject to adjustment based upon acquisitions, as well as unusual or extraordinary items that were not contemplated when the performance measures were set. The Compensation Committee approves all adjustments. The adjustments for acquisitions are based upon the projections for the respective acquisition at the time the transaction was approved by the Board. We believe these adjustments provide incentive for senior level managers to ensure acquisitions are successful.

Fiscal year 2010 was the final performance year for the 2008 SALT Program award. During the three year period from 2008 to 2010, we earned cumulative revenues of $1.6 billion, cumulative adjusted operating income of $186 million and cumulative adjusted cash flow provided by operations of $243 million. This compares to the 2008 grant metrics of $1.8 billion, $222 million and $211 million, respectively. Under the SALT Program, each metric is tracked independently and achievement of one or more metric allows for the pro rata vesting of the award depending on how many of the metrics are achieved and the lowest percentage achievement of the metric(s) not achieved. For example, if two of the performance goals are met and the third metric was only 90% of the target, then 2/3 of the award multiplied by 90% will vest. Similarly, if only one of the performance goals is met and the lowest percentage achieved of the other two metrics was 80% of the target, then 1/3 of the award multiplied by 80% will vest. Thus, in 2011 our Board approved the vesting of 28% of the 2008 SALT Program award as only one metric was achieved and the lowest percentage achieved of the other two metrics was 84%.

Adjusted amounts differ from those calculated under generally accepted accounting principles (“GAAP”) primarily as a result of the exclusion of: (i) acquisition-related charges, (ii) facility consolidation, manufacturing transfer and system integration charges, (iii) asset write-down and disposition charges, (iv) severance charges in connection with corporate realignments or a general reduction in force (v) litigation charges and gains, (vi) the impact of non-cash charges to interest expense due to the accounting change governing convertible debt, (vii) unusual or infrequently occurring items and (viii) the income tax (benefit) related to these adjustments, all of which were not included in the original STIC target measures. All of these adjustments were reviewed and approved by the Compensation Committee. See “Strategic and Financial Overview” in Item 7 of our 2010 Form 10-K for a reconciliation of adjusted amounts to GAAP.

Other Equity-Based Compensation. In addition to the LTI Program, senior level managers may receive additional equity-based compensation at the date of hire, upon promotion, for special recognition or upon a significant change in responsibility. These awards are used as a recruiting and retention tool. Historically, these grants were made in the form of incentive stock options or restricted stock and were typically granted as a percentage of the respective employee’s base salary. The amount of incentive stock options granted that become exercisable in any one year by an individual employee is subject to the $100,000 limit imposed by IRC §422(d). Beginning in 2007, these awards were made in the form of non-qualified stock options and/or restricted stock. Also during 2007, the Company’s executive officers, except for the President and CEO who received a similar type grant upon his promotion in 2006, received a one-time restricted stock grant equal to 100% of their base salary. This grant served as an additional retention tool for the executive officers as they vested over four years (50% at the end of the second year and 25% at the end of the third and fourth years), with the last tranche vesting in 2010.

Share Ownership and Holding Period Guidelines

In order to better align the interests of our senior level managers with the interests of our stockholders and to promote our commitment to sound corporate governance, the Compensation Committee designed and the Board approved stock ownership guidelines. These guidelines require non-employee directors to own at least $90,000 in shares of the Company. The ownership requirement for our Named Executive Officers is calculated as a multiple of base salary as follows:

		Multiple of Base Salary
President & CEO			5.0x
CFO			3.0x
Other Named Executive Officers			3.0x

For purposes of measuring compliance with these guidelines, shares owned directly or indirectly by the participant or his or her immediate family members, as well as restricted stock and restricted stock units issued and held as part of a participant’s long-term compensation awards, whether vested or unvested, are considered “owned.” Compliance with these guidelines is required within five years of becoming subject to the policy and meaningful progress must be made and is monitored throughout that time period. Currently, all Named Executive Officers and directors are in compliance with these ownership guidelines.

The ownership guidelines also contain a holding period requirement for equity-based awards. Non-employee directors are expected to hold all equity-based awards, net of applicable taxes, until their tenure as a Board member has ended. Senior level managers are required to hold exercised stock options and vested restricted stock/units, net of applicable taxes, for one year following the exercise or vesting. For purposes of these guidelines, a 50% tax rate is assumed.

Retirement and Change of Control Agreements

Overview. We believe that it is in the best interest of our Company and stockholders to have the unbiased dedication of our senior level managers, without the distraction of personal uncertainties such as retirement or a change of control. We have designed our retirement and other post-employment benefit programs to reduce such distraction. We believe that our programs allow for a smooth transition in the event of retirement or a change of control without providing “windfall” benefits. We also believe that these benefits are competitive with those of other comparable companies.

The components of our retirement and post-employment benefits program are as follows:

•

Executive Retirement Guidelines

•

401(k) Plan

•

Change of Control Agreements

We do not offer our U.S. based employees defined benefit pension, post-retirement or deferred compensation benefits as these plans are more expensive to administer in comparison to the programs that we do offer. When designing our retirement and other post-employment benefit programs we consider IRC §409A and continue to evaluate our programs in light of the guidance issued under that rule.

We currently do not have a formal severance plan for our employees. In the past, we have provided post-employment severance benefits to our employees who are terminated in connection with a reduction-in-force or corporate reorganization. Generally, these benefit amounts are based upon length of service and position level with the Company. Severance payments are at the discretion of management.

Executive Retirement Guidelines. Senior managers who are at least 59¹/2 with a combination of age and length of service equal to at least 69¹/2 are eligible to receive certain benefits under our Executive Retirement Guidelines. These guidelines have been approved by our Board and allow for the following:

•

accelerated vesting of all outstanding time-based stock incentive awards;

•

discretionary vesting of all outstanding performance-based stock incentive awards; and

•

a discretionary extension of the time eligible to exercise outstanding stock options.

In exchange for these benefits, the executives are required to sign a two-year non-compete agreement. In order to be considered for these benefits, executives must submit a voluntary retirement request form at least one year prior to their anticipated retirement date and facilitate the transition of their responsibilities to their successor. All requests for retirement and benefits under our Executive Retirement Guidelines by Named Executive Officers are reviewed and approved by our Board.

401(k) Plan. Nearly all of our U.S. based employees are eligible to participate in our defined contribution 401(k) Plan. This plan provides for the deferral of employee compensation up to the maximum IRC limit and a discretionary Company match. From 2008 to 2010, this match was $0.35 per dollar of participant deferral, up to 6% of the base salary for each participant.

In addition to the discretionary contributions described above, U.S. based employees are eligible to receive an additional discretionary contribution of up to 5% of their base salary to the 401(k) Plan. This discretionary contribution is made in the form of Common Stock and is subject to certain IRC limits. No contributions were made in 2010 or 2009 as a result of our Company not achieving its performance targets for those years. The full 5% award was received by employees in 2008.

Each year we perform standard year-end coverage, nondiscrimination and compliance testing on our 401(k) Plan to ensure compliance with applicable Internal Revenue Service rules and regulations. In the event the plan does not meet the nondiscrimination requirements, a prorated portion of the contributions made by “highly compensated” employees will be returned to the respective employee in order to ensure compliance.

Participants immediately vest in their own contributions and earnings, and in the matching and stock contributions to the 401(k) Plan.

Change of Control Agreements. We have entered into change of control agreements with certain key employees including our Named Executive Officers. These agreements provide for continued employment with the same base salary, annual cash incentive and benefits for two years following a change of control. If the employee is terminated after the change of control, other than for death, disability or cause, or the executive terminates the agreement for good reason, then the executive will be entitled to certain benefits.

The most significant components of those benefits are as follows:

•

two times annual salary;

•

two times the greater of i) average bonus for the three year period prior to the date of termination or ii) current year STIC at the target level;

•

two times the Company’s 5% discretionary contributions to the Company’s 401(k) Plan;

•

$25,000 for outplacement services;

•

continued coverage under the Company’s medical and other benefit plans (i.e. education assistance, financial planning) for a period of two years; and

•

all unvested equity awards immediately vest except SALT Program awards.

Our change of control agreements provide that an executive is entitled to an excise tax gross-up payment to the extent the change of control parachute payment exceeds 110% of the safe harbor threshold. Conversely, an executive is not entitled to a gross-up if the present value of payments does not exceed 110% of the safe harbor threshold. Instead, the payments due to these executives would be reduced to the maximum that could be paid so that the value of the payment would not exceed the safe harbor threshold.

Based upon the hypothetical termination date of December 31, 2010, the change of control termination benefits for our Named Executive Officers would be as follows:

						Acceleration
						of Stock-																				Tax Gross-
		Salary &				Based				Continuance				401(k)				Outplacement								Up/Modified
		Bonus				Awards(1)				of Benefits(2)				Plan				Services				Severance				Cut-Back				Total
Thomas J. Hook		$	1,942,500			$	1,606,301			$	415,683			$	10,290			$	25,000			$	3,464,100			$	2,628,887			$	10,092,761
Thomas J. Mazza			986,000				850,903				201,519				10,290				25,000				—				714,981				2,788,693
Mauricio Arellano			940,500				756,062				179,323				—				25,000				—				662,538				2,563,423
Susan M. Bratton			885,871				688,562				184,300				10,290				25,000				—				(47,675	)			1,746,348
Michelle Graham			875,000				459,309				168,816				10,290				25,000				—				—				1,538,415

In exchange for the above, the terminated executive is required to sign a 36-month confidentiality agreement. In designing these agreements, we considered IRC §280G. IRC §280G denies a tax deduction for any and all excess parachute payments for corporations undergoing a change of control. In addition, the individual recipient of such payment must pay a 20% excise tax on the amount of the payment. IRC §280G provides a safe harbor from this excise tax if the present value of any parachute payments under a change of control does not exceed certain thresholds as defined in the IRC.

Other Personal Benefits

In addition to the elements of compensation discussed above, we also provide senior level managers with various other benefits as follows:

•

Education Assistance

•

Life Insurance

•

Long-Term Disability

•

Executive Financial Planning

•

Executive Physical

We provide these benefits in order to remain competitive with the market and believe that these benefits help us to attract and retain qualified executives. These benefits also reduce the amount of time and attention that senior level managers must spend on personal matters and allow them to dedicate more time to our Company. We believe that these benefits are in-line with the market, are reasonable in nature, are not excessive and are in the best interest of our Company and its stockholders.

Education Assistance. All employees and their dependents are eligible to participate in our Education Assistance Program. This program is provided to support our innovation and commitment to continuous improvement. We believe that education will support the development of our employees for new positions and enhance their contributions to the achievement of our strategic goals. This program was pioneered by our founder, Wilson Greatbatch, who believed as we do that “education is always worth more than it costs in time, money and effort.”

Under our Education Assistance Program we reimburse tuition, textbooks and laboratory fees for all of our employees and their dependents. All full-time employees are eligible for 100% reimbursement upon the successful completion of job related courses or degree program. The dependent children benefit relates to post-secondary education and vests on a straight-line basis over ten years. For employees hired after January 1, 2003, the maximum amount of dependent children reimbursable tuition is the cost of tuition at the recognized local state university. For employees hired prior to January 1, 2003 and for all of the Named Executive Officers, there is no maximum limit for dependent children reimbursement. Minimum academic achievement is required in order to receive reimbursement under all Education Assistance Programs. In 2010, only Mr. Hook received benefits under this program.

Life Insurance. Our executive officers receive term life insurance paid by the Company equal to $5 million for the President & CEO and $1 million for other executive officers. Additionally, the Company reimburses the executive officers for any additional tax burden resulting from this benefit. We believe this benefit is consistent with and will allow us to remain competitive with the market and believe that these benefits help us to attract and retain qualified executives.

Long-Term Disability. Our executive officers receive long-term disability insurance paid by the Company equal to 60% of salary plus STIC at the target level, with no cap. Additionally, the Company reimburses the executive officers for any additional tax burden resulting from this benefit. We believe this benefit is consistent with and will allow us to remain competitive with the market and believe that these benefits help us to attract and retain qualified executives.

Executive Financial Planning. Senior level managers are eligible for reimbursement of financial planning services. Reimbursement is approved for dollar amounts up to $5,000 in the first year of the program and up to $2,500 in all other years ($3,000 for the President & CEO). Qualified expenses include income tax preparation, estate planning and investment planning, among others.

Executive Physicals. We provide senior level managers with annual physicals. We cover 100% of the cost of this program. This program was developed to promote the physical well being and health of our senior level managers. We believe this program is in the best long-term interest of our stockholders.

Other Benefits. Senior level managers also participate in other benefit plans that we fully or partially subsidize. Their participation is on the same terms as other employees of the Company. Some of the more significant of these benefits include medical, dental and vision insurance, as well as relocation reimbursement and vacation.

Employment Agreements

In April 2010, the Company entered into an employment agreement with Mr. Hook in order to secure his continuing services as President & Chief Executive Officer. In addition to the benefits discussed in this section, the agreement provides for the following:

•

Term extends through January 7, 2013 and automatically renews for one year upon consent by Mr. Hook and the Compensation Committee, which must be given one year prior to the expiration date;

•

Grant of 50,000 shares of non-qualified stock options and 25,000 shares of restricted stock, which vest 25% on January 3, 2011, 25% on January 2, 2012 and 50% on January 2, 2013;

•

In the event of death or disability — i) salary and benefits (only health insurance in the event of death) continuation through the term of the employment agreement or one year whichever is longer; and ii) immediate vesting of all non-vested equity awards, except SALT Program awards, including performance awards granted in 2010 or later, which may be reduced by up to 50% at the discretion of the Compensation Committee;

•

In the event of termination without cause or with good reason as defined in the agreement — i) one year salary; ii) severance payment equal to $3 million plus 85% of base salary; and iii) immediate vesting of all equity awards, except SALT Program awards and performance-awards granted in 2010 or later;

•

Right to exercise vested options upon termination is extended to twelve months; and

•

Unless Mr. Hook is terminated without cause, he will be subject to a non-compete agreement during the term of the employment agreement and 24 months from the date of last payment under the contract.

The following table presents the benefits that would be received by Mr. Hook under his new employment agreement in the event of a hypothetical termination as of December 31, 2010 as follows:

						Acceleration of
						Stock-Based				Continuance of
		Salary				Awards(1)				Benefits(2)				Severance				Total
Permanent Disability		$	1,050,000			$	3,568,344			$	415,683			$	—			$	5,034,027
Death			1,050,000				3,568,344				28,757				—				4,647,101
Termination Without Cause			525,000				1,606,301				—				3,446,250				5,577,551
Termination With Good Reason			525,000				1,606,301				—				3,446,250				5,577,551
Termination for Cause			—				—				—				—				—
Termination Without Good Reason			—				—				—				—				—
Retirement			—				1,606,301				—				—				1,606,301

No other Named Executive Officer has an employment agreement with the Company.

In December 2010, the Company hired Michelle Graham as Senior Vice President, Human Resources. In addition to the benefits discussed in this section, her offer letter provided that in the event that the Company terminates her employment for any reason other than cause, as defined in the offer letter, Ms. Graham is entitled to salary, health and medical benefit continuation for a period of one year following the date of termination. In the event of a hypothetical termination by the Company for any reason other than cause as of December 31, 2010, Ms. Graham would be entitled to a payment of approximately $280,000.

Compensation and Organization Committee Report

The Compensation and Organization Committee has reviewed and discussed the Compensation Discussion and Analysis section appearing in this document with management and based upon this review and discussion recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement for filing with the SEC.

		Respectively submitted,
		Pamela G. Bailey
		Michael Dinkins
		Peter H. Soderberg (Chair)
		William B. Summers, Jr.

Compensation Risk Analysis

The preceding CD&A generally describes our compensation policies, plans and practices that are applicable for executives and senior managers of the Company. The Company uses a combination of fixed and variable and short and long term compensation programs across all of its Business Units, with a significant focus on corporate and business financial performance as generally described in this Proxy Statement. The Company does not believe that risks arising from its compensation policies, plans or practices are reasonably likely to have a material adverse effect on the Company.

COMPENSATION TABLES

Summary Compensation Table

The following table summarizes the total compensation paid or earned by each of the Named Executive Officers for fiscal years 2010, 2009 and 2008. During 2010, we entered into a new employment agreement with Mr. Hook, which included a one-time grant of stock options and restricted stock. See the “Employment Agreements” section of the CD&A for further discussion. Total cash compensation, which includes salary and non-equity incentive plan compensation under our STIC Program, is based on individual performance as well as on the overall performance of the Company as more fully described in the “Base Salary” and “Annual Cash Incentives” sections of the CD&A. Generally, the emphasis that is placed on stock-based compensation increases as the level of responsibility of the individual employee increases. During 2010, the Company adopted the LTI Program which replaced the LTIP and SALT Programs. See the “Long-Term Equity Awards” section of the CD&A for further discussion.

																						Non-Equity
																						Incentive
Name and Principal														Stock				Option				Plan				All Other
Position		Year				Salary(1)				Bonus(2)				Awards(3)				Awards(4)				Comp.(5)				Comp.(7)				Total
Thomas J. Hook			2010			$	525,000			$	—			$	1,991,212			$	708,681			$	329,288			$	106,362			$	3,660,543
President &			2009				491,600				—				356,245				904,167				318,557				143,120				2,213,689
Chief Executive Officer			2008				475,000				—				363,829				1,195,082				431,278				50,778				2,515,967
Thomas J. Mazza			2010				290,000				—				486,611				94,244				149,794				28,443				1,049,092
Senior Vice President &			2009				271,500				—				104,873				251,779				153,941				83,628				865,721
Chief Financial Officer			2008				262,200				—				107,105				329,965				208,307				91,019				998,596
Mauricio Arellano			2010				285,000				—				423,033				81,933				136,396				28,303				954,665
President,			2009				267,500				—				87,071				201,878				140,839				37,809				735,097
Greatbatch Medical			2008				248,800				—				88,918				263,054				183,543				30,864				815,179
Susan M. Bratton			2010				265,000				—				393,336				76,181				127,103				34,839				896,459
Senior Vice President,			2009				250,200				—				84,578				196,110				131,730				65,697				728,315
Electrochem			2008				241,700				—				86,380				255,569				178,305				92,694				854,648
Michelle Graham			2010				14,423				150,000				449,990				—				—				—				614,413
Senior Vice President, Human Resources
Susan H. Campbell(6)			2010				183,021				—				1,214,750				193,615				—				24,414				1,615,800
Former Senior Vice			2009				267,500				—				87,071				201,878				140,839				19,790				717,078
President, Orthopaedic			2008				248,800				—				88,918				263,054				183,543				21,788				806,103

														Long-Term
										Term Life				Disability
						401(k)				Insurance				Insurance				Tax								Excess
		Year				Contribution				Premiums				Premiums				Gross-Up				Perquisites				Vacation				Other				Total
Thomas J. Hook			2010			$	5,145			$	13,250			$	17,993			$	18,730			$	26,337			$	24,657			$	250			$	106,362
			2009				5,145				13,250				16,106				26,539				58,239				23,825				16				143,120
			2008				16,225				13,250				7,907				10,802				—				—				2,594				50,778
Thomas J. Mazza			2010				5,876				5,780				4,273				6,206				—				6,308				—				28,443
			2009				5,145				5,780				12,922				11,212				35,417				13,152				—				83,628
			2008				16,225				5,780				1,902				3,922				49,980				13,210				—				91,019
Mauricio Arellano			2010				—				1,740				7,567				5,579				—				13,417				—				28,303
			2009				3,271				1,740				8,828				6,336				—				17,634				—				37,809
			2008				14,483				1,740				3,744				2,800				—				—				8,097				30,864
Susan M. Bratton			2010				5,145				1,420				9,229				5,533				—				13,512				—				34,839
			2009				5,145				1,420				9,021				6,259				35,607				—				8,245				65,697
			2008				16,225				1,420				1,770				1,628				71,651				—				—				92,694
Susan H. Campbell			2010				4,071				—				5,919				3,549				—				10,875				—				24,414
			2009				5,145				980				8,176				5,489				—				—				—				19,790
			2008				16,225				980				2,703				1,880				—				—				—				21,788

Perquisites for the Named Executive Officers are included in “All Other Compensation” if the aggregate value is equal to or greater than $10,000. The perquisites included were comprised of the following. No perquisite exceeded the greater of $25,000 or 10% of the total perquisites provided to the respective executive, except as follows:

Dependent

Service

Personal use of

Financial

Executive

Education

Awards/

Personal

Company Provided

Year

Planning

Physical

Assistance(1)

Gifts

Travel

Cell-Phone

Thomas J. Hook

2010

X

X

X

X

2009

X

X

$

52,300

X

X

2008

Thomas J. Mazza

2010

2009

34,470

X

X

X

2008

X

X

44,370

X

X

X

Susan M. Bratton

2010

2009

X

34,357

X

2008

X

68,469

X

X

X

2010 Grants of Plan-Based Awards

The following table summarizes the grants of plan-based awards to each of the Named Executive Officers during fiscal year 2010. All stock-based awards in 2010 were granted from our 2005 Stock Incentive Plan or our 2009 Stock Incentive Plan. Under these plans, all stock options expire 10 years from the date of grant and acceleration of vesting occurs for time-based awards upon a change of control. Acceleration of vesting upon death, disability or retirement is at the discretion of the Compensation Committee. Prior to vesting, employees who receive a grant of restricted stock are eligible to participate in the rights or privileges of a stockholder of the Company with respect to those shares, including the right to receive dividends and vote. We did not pay any cash dividends in 2010 and currently intend to retain all earnings to further develop and grow our business.

																														All Other				All Other
																														Stock				Option								Grant
																														Awards:				Awards:								Date Fair
						Estimated Future Payouts Under												Estimated Future Payouts												Number				Number of				Exercise				Value of
						Non-Equity Incentive Plan												Under Equity Incentive Plan												of Shares				Securities				Price of				Stock and
						Awards(1)												Awards(2)												of Stock				Underlying				Option				Option
Name		Grant Date				Threshold				Target				Maximum				Threshold				Target				Maximum				or Units(3)				Options(3)				Awards				Awards(4)
																		(#)				(#)				(#)				(#)				(#)				($/Sh)
Thomas J. Hook						$	223,125			$	446,250			$	892,500				—				—				—				—				—			$	—			$	—
			3/10/2010				—				—				—				4,333				40,622				81,244				13,540				34,337				20.84				1,739,143
			4/11/2010	(5)			—				—				—				—				—				—				25,000				50,000				21.37				960,750
Thomas J. Mazza							101,500				203,000				406,000				—				—				—				—				—				—				—
			3/10/2010				—				—				—				1,447				13,567				27,135				4,522				11,468				20.84				580,855
Mauricio Arellano							92,625				185,250				370,500				—				—				—				—				—				—				—
			3/10/2010				—				—				—				1,258				11,795				23,590				3,931				9,970				20.84				504,966
Susan M. Bratton							86,125				172,250				344,500				—				—				—				—				—				—				—
			3/10/2010				—				—				—				1,169				10,967				21,934				3,655				9,270				20.84				469,517
Michelle Graham			12/13/2010	(6)			—				—				—				—				—				—				19,019				—				—				449,990
Susan H. Campbell							91,000				182,000				364,000				—				—				—				—				—				—				—
			3/10/2010				—				—				—				1,236				11,588				23,176				3,862				9,795				20.84				496,103
			9/29/2010	(7)			—				—				—				—				—				—				34,064				35,051				23.23				912,262