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TEXAS INSTRUMENTS INCORPORATED
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[Company Logo]
TEXAS INSTRUMENTS
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 20, 2000
Dear Stockholders:
You are cordially invited to attend the 2000 annual meeting of stockholders
on Thursday, April 20, 2000 at the cafeteria on our property at 12500 TI
Boulevard, Dallas, Texas, at 10:00 a.m. (Dallas time). At the meeting we
will:
o Elect directors for the next year.
o Consider and act upon a proposal to approve an amendment to the
company's Restated Certificate of Incorporation for the purpose of
increasing the authorized shares of common stock of the company from
1,200,000,000 to 2,400,000,000.
o Consider and act upon a board proposal to approve a Texas Instruments
2000 Long-Term Incentive Plan.
o Consider and act upon such other matters as may properly come before
the meeting.
Stockholders of record at the close of business on February 22, 2000 are
entitled to vote at the annual meeting.
We urge you to vote your shares as promptly as possible by: (1) calling the
toll-free number, (2) accessing the Internet web site, or (3) signing, dating
and mailing the enclosed proxy.
Sincerely,
-----------------------------
Richard J. Agnich
Senior Vice President and
Secretary
Dallas, Texas
March ____, 2000
TABLE OF CONTENTS
Page
Voting Procedures.......................................................... 4
Election of Directors...................................................... 4
Nominees for Directorship............................................ 4
Nominees' Ages, Service and Share Ownership.......................... 8
Board Organization......................................................... 8
Board and Committee Meetings......................................... 8
Committees of the Board.............................................. 8
Directors Compensation.....................................................10
Cash Compensation....................................................10
Deferral Election....................................................10
Restricted Stock Units...............................................11
Stock Options........................................................11
Director Award Program...............................................11
Executive Compensation.....................................................11
Compensation Overview................................................11
Summary Compensation Table...........................................12
Table of Option Grants in 1999.......................................14
Table of Option Exercises in 1999 and Year-End Option Values.........15
U.S. Pension Plan Table..............................................16
U.K. Pension Plan Table..............................................17
Compensation Committee Report on Executive Compensation....................18
Comparison of Total Shareholder Return.....................................21
Proposal to Approve Amendment to Restated Certificate of
Incorporation to Increase Authorized Common Stock........................22
Proposal to Approve The Texas Instruments 2000 Long-Term
Incentive Plan...........................................................23
2
TABLE OF CONTENTS (Continued)
Page
Additional Information.....................................................27
Financial Statements.................................................27
Voting Securities....................................................27
Share Ownership of Certain Persons...................................27
Certain Business Relationships.......................................28
Cost of Solicitation.................................................28
Proposals of Stockholders............................................29
Quorum Requirement...................................................29
Vote Required........................................................29
Telephone and Internet Voting........................................30
Independent Auditors.................................................31
Exhibit A - Texas Instruments 2000 Long-Term Incentive Plan...............A-1
Exhibit B - Financial Statements..........................................B-1
3
[Company Logo]
TEXAS INSTRUMENTS
EXECUTIVE OFFICES: 12500 TI BOULEVARD, DALLAS, TEXAS
MAILING ADDRESS: POST OFFICE BOX 660199, DALLAS, TEXAS 75266-0199
PROXY STATEMENT
March ___, 2000
VOTING PROCEDURES
TI's board of directors requests your proxy for the annual meeting of
stockholders on April 20, 2000. If you sign and return the enclosed proxy, or
vote by telephone or on the Internet, you authorize the persons named in the
proxy to represent you and vote your shares for the purposes we mentioned in
the notice of annual meeting.
If you come to the meeting, you can of course vote in person. But, if you
don't come to the meeting, your shares can be voted only if you have returned a
properly executed proxy or followed the telephone or Internet voting
instructions. If you execute and return your proxy but do not give voting
instructions, the shares represented by that proxy will be voted as recommended
by the board of directors. You can revoke your authorization at any time
before the shares are voted at the meeting.
ELECTION OF DIRECTORS
Directors are elected at the annual meeting to hold office until the next
annual meeting and until their successors are elected and qualified. The board
of directors has designated the following persons as nominees. Unless you
withhold authority to vote for directors in your proxy, your shares will be
voted for: JAMES R. ADAMS, DAVID L. BOREN, JAMES B. BUSEY IV, DANIEL A. CARP,
THOMAS J. ENGIBOUS, GERALD W. FRONTERHOUSE, DAVID R. GOODE, WAYNE R. SANDERS,
RUTH J. SIMMONS and CLAYTON K. YEUTTER.
Nominees for Directorship
All of the nominees for directorship are now directors of the company. If
any nominee becomes unable to serve before the meeting, the people named as
proxies may vote for a substitute or the number of directors will be reduced
accordingly.
4
[Photo of J.R. Adams] JAMES R. ADAMS Director
Chair, Board Organization and Nominating
Committee; member, Audit Committee.
Chairman of the board of the company from 1996
to April 1998. Group president, SBC
Communications Inc. from 1992 until retirement
in 1995; president and chief executive officer
of Southwestern Bell Telephone Company,
1988-92. Director, Inet Technologies, Inc.,
Prodigy Communications Corporation and Storage
Technology Corp.
[Photo of D.L. Boren] DAVID L. BOREN Director
Member, Audit and Stockholder Relations and
Public Policy Committees.
President of the University of Oklahoma since
1994. U.S. Senator, 1979-94; Governor of
Oklahoma, 1975-79. Director, AMR Corporation,
Phillips Petroleum Company, Torchmark
Corporation and Waddell & Reed, Inc.; chairman,
Oklahoma Foundation for Excellence.
[Photo of J.B. Busey IV] JAMES B. BUSEY IV Director
Chair, Audit Committee; member, Board
Organization and Nominating Committee.
Retired from U.S. Navy as Admiral in 1989.
President and chief executive officer, Armed
Forces Communications and Electronics
Association, 1992-96; Deputy Secretary,
Department of Transportation, 1991-92;
Administrator, Federal Aviation Administration,
1989-91. Director, Curtiss-Wright Corporation;
trustee and vice-chairman, MITRE Corporation.
5
[Photo of D.A. Carp] DANIEL A. CARP Director
Member, Audit and Board Organization and
Nominating Committees.
Chief executive officer of Eastman Kodak
Company since January 2000; president since
January 1997; also director since December
1997. Executive vice president and assistant
chief operating officer of Eastman Kodak,
1995-97; general manager, European Region,
1991-95. Member, The Business Roundtable.
[Photo of T.J. Engibous] THOMAS J. ENGIBOUS Chairman, President and
Chief Executive Officer
President and chief executive officer of the
company since 1996; also, chairman since April
1998. Joined the company in 1976; elected
executive vice president in 1993. Director,
Catalyst and J.C. Penney Company, Inc.; member,
The Business Council and The Business
Roundtable; trustee, Southern Methodist
University.
[Photo of G.W. Fronterhouse] GERALD W. FRONTERHOUSE Director
Member, Board Organization and Nominating and
Compensation Committees.
Investments. Former chief executive officer
(1985-88) of First RepublicBank Corporation.
President and director, Hoblitzelle Foundation.
6
[Photo of D.R. Goode] DAVID R. GOODE Director
Chair, Compensation Committee; member, Board
Organization and Nominating Committee.
Chairman of the board and chief executive
officer of Norfolk Southern Corporation since
1992; also, president since 1991. Director,
Caterpillar, Inc., Delta Air Lines, Inc.
and Georgia-Pacific Corporation; member, The
Business Council and The Business Roundtable;
trustee, Hollins College.
[Photo of W.R. Sanders] WAYNE R. SANDERS Director
Member, Compensation and Stockholder Relations
and Public Policy Committees.
Chairman of the board of Kimberly-Clark
Corporation since 1992; also, chief executive
officer since 1991. Director, Adolph Coors
Company, Coors Brewing Company and Chase Bank
of Texas, N.A.; trustee, Marquette University.
[Photo of R.J. Simmons] RUTH J. SIMMONS Director
Member, Audit and Stockholder Relations and
Public Policy Committees.
President of Smith College since 1995. Vice
provost of Princeton University, 1992-95;
provost of Spelman College, 1990-91. Director,
Metropolitan Life Insurance Company, Pfizer,
Inc., The Goldman Sachs Group, Inc.; fellow,
American Academy of Arts and Sciences; member,
Council on Foreign Relations; trustee, Carnegie
Corporation of New York.
[Photo of C.K. Yeutter] CLAYTON K. YEUTTER Director
Chair, Stockholder Relations and Public Policy
Committee; member, Compensation Committee.
Of counsel, Hogan & Hartson. Counselor to
President Bush for domestic policy during 1992;
chairman, Republican National Committee,
1991-92; Secretary, Department of Agriculture,
1989-91; U.S. Trade Representative, 1985-89.
Director, Allied Zurich, P.L.C., Caterpillar
Inc., ConAgra, Inc., FMC Corporation,
Oppenheimer Funds and Weyerhaeuser Company.
7
Nominees' Ages, Service and Share Ownership
The table below shows the ages and holdings of common stock of the nominees and
the year they became a director.
<TABLE>
<CAPTION>
Common Stock
Director Ownership at
Nominee Age Since December 31, 1999<F1>*
------- --- -------- ------------------
<S> <C> <C> <C>
James R. Adams 60 1989 300,857
David L. Boren 58 1995 15,140
James B. Busey IV 67 1992 19,790
Daniel A. Carp 51 1997 6,832
Thomas J. Engibous 47 1996 1,232,378
Gerald W. Fronterhouse 63 1986 26,045
David R. Goode 59 1996 9,316
Wayne R. Sanders 52 1997 10,100
Ruth J. Simmons 54 1999 4,000
Clayton K. Yeutter 69 1992 21,140
- ---------------
<FN>
<F1>*Includes (a) shares that can be acquired within 60 days through the
exercise of options by Mr. Adams, 257,500 shares, Mr. Engibous, 1,103,000
shares and Messrs. Boren, Busey, Carp, Fronterhouse, Goode, Sanders and
Yeutter, 2,500 shares; (b) shares credited to profit sharing stock accounts for
Mr. Adams, 1,660 shares, and Mr. Engibous, 8,685 shares; and (c) shares subject
to restricted stock unit awards for Mr. Adams, 9,256 shares, Mr. Boren, 11,440
shares, Mr. Busey, 11,440 shares, Mr. Carp, 4,332 shares, Mr. Engibous, 80,000
shares, Mr. Fronterhouse, 11,440 shares, Mr. Goode, 6,816 shares, Mr. Sanders,
4,800 shares, Ms. Simmons, 4,000 shares and Mr. Yeutter, 11,440 shares.
Excludes shares held by a family member if a director has disclaimed beneficial
ownership. Each director owns less than 1% of the company's common stock.
</TABLE>
BOARD ORGANIZATION
Board and Committee Meetings
During 1999, the board held 12 meetings. The board has four standing
committees described below. Overall attendance at board and committee meetings
was approximately 93%.
Committees of the Board
Audit Committee. The Audit Committee is generally responsible for:
o Making recommendations to the board regarding the appointment of
independent public accountants for the company.
8
o Approving:
o The company's annual report to stockholders required by Securities and
Exchange Commission or stock exchange rules.
o Certain non-audit services of the independent public accountants.
o Reviewing:
o The company's quarterly reports to the SEC.
o Proposed changes in major accounting policies.
o Scope of the annual audit.
o Reports of compliance of management and operating personnel with the
company's code of ethics.
o Adequacy of the company's system of internal accounting controls.
o Other factors affecting the integrity of published financial reports.
The Audit Committee met 6 times in 1999.
Board Organization and Nominating Committee. The Board Organization and
Nominating Committee is generally responsible for:
o Making recommendations to the board regarding:
o Nominees for election as directors.
o Structure, size and composition of the board.
o Compensation of board members.
o Organization and responsibilities of board committees.
o Reviewing:
o General responsibilities and functions of the board.
o A desirable balance of expertise among board members.
o Overall company organizational health, particularly succession plans for
top management positions within TI.
Any stockholder who wishes to recommend a prospective board nominee for the
committee to consider can write to Richard J. Agnich, Secretary, Board
Organization and Nominating Committee, c/o Texas Instruments Incorporated, Post
Office Box 660199, MS 8658, Dallas, Texas 75266-0199.
The Board Organization and Nominating Committee met 6 times in 1999.
Compensation Committee. The Compensation Committee is generally responsible
for:
o Making recommendations to the board regarding:
o Revisions in and actions under benefit plans of the company that the
board must approve.
o Institution of, revisions in, terminations of and actions under pension,
profit sharing or other benefit plans that only benefit officers of the
company or disproportionately benefit officers and plans requiring or
permitting the issuance of the company's stock.
o Reservation of company stock for use as awards or grants under plans or
as contributions or sales to any trustee of a company employee benefit
plan.
o Purchase of company stock in connection with benefit plans.
9
o Taking action as appropriate regarding:
o Changes in compensation of executive officers of the company.
o Actions that are required or permitted to be taken by the committee under
employee benefit plans of the company.
The Compensation Committee met 6 times in 1999.
Stockholder Relations and Public Policy Committee. The Stockholder Relations
and Public Policy Committee is generally responsible for:
o Making recommendations to the board regarding:
o Topics affecting the relationship between management and stockholders and
public issues.
o Responses to proposals submitted by stockholders.
o Declaration of dividends and stock splits.
o Reviewing:
o Contribution policies of the company and of the TI Foundation.
o Revisions to TI's code of ethics.
The Stockholder Relations and Public Policy Committee met 5 times in 1999.
DIRECTORS COMPENSATION
Cash Compensation
Directors who are not employees are paid each year:
o A board retainer of $40,000.
o A committee retainer of $15,000.
o $2,500 for attendance at the company's strategic planning conference.
o $2,500 for attendance at the company's annual planning conference.
Compensation for other activities, like visits to TI facilities and attendance
at certain company events, is $1,000 per day. In 1999, the company made
payments (an aggregate of $7,700) relating to premiums for life, medical,
dental, travel and accident insurance policies covering directors.
Deferral Election
Subject to some limitations, directors can choose to have all or part of their
compensation deferred until they leave the board (or certain other specified
times). The deferred amounts are credited to either a cash account or stock
unit account. Cash accounts earn interest from the company at a rate
(currently based on published interest rates on certain corporate bonds)
determined by the Board Organization and Nominating Committee. Stock unit
accounts fluctuate in value with the underlying shares of company common stock,
which will be issued after the deferral period.
10
Restricted Stock Units
Under the company's restricted stock unit plan for directors, new non-employee
directors are given 2,000 restricted stock units (each representing one share
of company common stock). The restricted stock units provide for issuance of
company common stock at the time of retirement from the board, or upon earlier
termination of service from the board after completing eight years of service
or because of death or disability.
Stock Options
Under the company's stock option plan for non-employee directors, non-employee
directors are annually granted a 10-year option to purchase 5,000 shares of the
company's common stock. The purchase price of the shares is 100% of the fair
market value on the date of grant. These nonqualified options become
exercisable in four equal annual installments beginning on the first
anniversary date of the grant and also may become fully exercisable in the
event of a change in control (as defined in the plan) of the company.
Director Award Program
Each director who has been on the board for five years, and whose board
membership ceases because of the mandatory retirement age or, in the case of
non-employee directors, because of death or disability, can participate in a
director award program. The program was established to promote the company's
interest in supporting charitable institutions. The company may contribute a
total of $500,000 per eligible director to up to three charitable institutions
recommended by the director and approved by the company. The contributions
will be made in five annual installments of $100,000 each following the
director's death. Directors receive no financial benefit from the program, and
all charitable deductions belong to the company.
EXECUTIVE COMPENSATION
Compensation Overview
The company is committed to building shareholder value through improved
performance and growth. To achieve this objective, the company seeks to create
an environment in which employees recognize that they are valued as individuals
and treated with respect, dignity and fairness.
The company uses a merit-based system of compensation to encourage individual
employees to reach their productive and creative potential, and to link
individual financial goals to company performance. The company regularly
compares its compensation system with those of competitors and refines its
system as necessary to encourage a motivated and productive work force.
The following tables provide information regarding the compensation of the
company's chief executive officer and each of the four other most highly
compensated executive officers.
11
Summary Compensation Table
The following table shows the compensation of the company's chief executive
officer and each of the four other most highly compensated executive officers
for services in all capacities to the company in 1997, 1998 and 1999.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
--------------------------------------- ---------------------------------------
Awards Payouts
------------------------- ------------
Stock
Name and Other Annual Restricted Options Long-Term All Other
Principal Compensation Stock Awards (in shares) Incentive Compensation
Position Year Salary Bonus <F1>(1) <F2>(2) <F3>(3) Plan Payouts <F4>(4)
- -------------------- ---- -------- ---------- ------------ ------------ ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
T.J. Engibous 1999 $744,170 $2,200,000 -- 0 500,000 0 $588,731
Chairman, 1998 $677,540 $1,800,000 -- 0 400,000 0 $174,732
President & CEO 1997 $645,870 $1,500,000 -- 0 520,000 0 $ 98,604
R.K. Templeton 1999 $457,670 $1,500,000 -- 0 300,000 0 $402,923
Executive Vice 1998 $407,540 $1,200,000 -- 0 180,000 0 $135,948
President 1997 $358,770 $1,100,000 -- 0 280,000 0 $ 41,248
K.S. Lu<F5>(5) 1999 $321,500 $ 650,000 -- 0 100,000 0 $174,108
Senior Vice 1998 $292,000 $ 500,000 -- 0 80,000 0 $ 53,007
President
J.C. Scaris-<F5>(5) 1999 $359,666 $ 800,000 -- $3,505,000 100,000 0 $258,816
brick Senior 1998 $325,396 $ 595,607 -- 0 80,000 0 $115,538
Vice President
D.A. Whitaker<F5>(5) 1999 $352,340 $ 600,000 -- 0 100,000 0 $211,686
Senior Vice 1998 $332,080 $ 650,000 -- 0 80,000 0 $ 60,753
President
- ------------------
<FN>
<F1>(1) The dollar value of perquisites and other personal benefits for each
of the named executive officers was less than the established reporting
thresholds.
<F2>(2) As of December 31, 1999, the value of restricted stock units awarded
to Messrs. Engibous, Templeton, Lu, Scarisbrick and Whitaker was $7,730,000,
$5,797,500, $7,343,000, $3,865,000 and $2,705,500, respectively. The
restricted stock units for Messrs. Templeton, Lu and Whitaker were awarded
prior to their becoming executive officers. The restricted stock units
awarded to Messrs. Engibous and Scarisbrick are performance-based and will
only be earned if the performance goals are achieved.
<F3>(3) The number of shares granted has been adjusted to give effect to the
1999 two-for-one stock split.
<F4>(4) During 1999, the company made payments in connection with split-dollar
life insurance policies in the following amounts: Mr. Engibous, $56,652 and
Mr. Templeton, $13,951. Also, the company made payments in connection with
travel and accident insurance policies in the amount of $200 for each of the
executive officers named in the summary compensation table.
12
During 1999, the company made matching contributions to 401(k) accounts in
the amount of $3,200 for Messrs. Engibous, Lu and Whitaker and $6,400 for
Mr. Templeton.
For 1999, cash payments and contributions (plus ERISA reductions for which the
company will provide an offsetting supplemental benefit) under the U.S. profit
sharing plan were as follows: Mr. Engibous, $528,679; Mr. Templeton, $344,464;
Mr. Lu, $170,708; and Mr. Whitaker, $208,286. Also, the company made a
contribution of $187,286 under the U.K. profit sharing plan for
Mr. Scarisbrick.
The company made a contribution (plus an ERISA reduction for which the company
will provide an offsetting supplemental benefit) in the amount of $37,908
under the deferred contribution retirement plan for Mr. Templeton.
The amount shown for Mr. Scarisbrick includes $43,629 for special allowances
and $20,701 of tax reimbursement payments relating to his assignment outside
the United States.
<F5>(5) Messrs. Lu, Scarisbrick and Whitaker became executive officers of the
company in 1998.
</TABLE>
13
Table of Option Grants in 1999
The following table shows stock options granted to the named executive
officers in 1999. Additionally, in accordance with the rules of the
Securities and Exchange Commission, the table shows the hypothetical gains or
option spreads that would exist for the respective options. These gains are
based on assumed rates of annual compound stock appreciation of 5% and 10%
from the date the options were granted over the full option term.
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock Price
Appreciation for Option Term (10 Years)
----------------------------------------------------------
5% 10%
---------------------------- ----------------------------
Options % of Total
Granted Options Stock Stock
(in Granted to Exercise Expir- Price (per Price (per
shares) Employees Price(per ation share) share)
Name <F1>(1) in 1999 share) Date <F2>(2) Gain <F2>(2) Gain
- ------------- ------- ---------- -------- ------- ---------- ----------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
T.J. Engibous 500,000 3.04% $49.80 1/20/09 $81.11 $15,656,951 $129.16 $39,680,167
R.K. Templeton 300,000 1.82% $49.80 1/20/09 $81.11 $ 9,394,171 $129.16 $23,808,100
K.S. Lu 100,000 0.61% $49.80 1/20/09 $81.11 $ 3,131,390 $129.16 $ 7,936,033
J.C. Scarisbrick 100,000 0.61% $49.80 1/20/09 $81.11 $ 3,131,390 $129.16 $ 7,936,033
D.A. Whitaker 100,000 0.61% $49.80 1/20/09 $81.11 $ 3,131,390 $129.16 $ 7,936,033
- ---------------
<F1>(1) These nonqualified options become exercisable in four equal annual
installments beginning on January 20, 2000 and also may become fully
exercisable in the event of a change in control (as defined in the options) of
the company. The number of shares granted and the exercise price per share
have been adjusted to give effect to the 1999 two-for-one stock split. In
some cases, the exercise price may be paid by delivery of already-owned shares
and tax withholding obligations related to exercise may be paid in shares.
<F2>(2) The price of TI common stock at the end of the 10-year term of the
stock options granted at a 5% annual appreciation would be $81.11, and at a
10% annual appreciation would be $129.16.
</TABLE>
14
Table of Option Exercises in 1999 and Year-End Option Values
The following table lists the number of shares acquired and the value realized
as the result of option exercises in 1999 by the named executive officers. It
also includes the number and value of the exercisable and unexercisable
options as of December 31, 1999. The table contains values for "in-the-
money" options, meaning a positive spread between the year-end share price of
$96.63 and the exercise price.
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
Shares December 31, 1999 December 31, 1999
Acquired on Value -------------------------- ---------------------------
Name Exercise<F1>(1) Realized Exercisable Unexercisable Exercisable Unexercisable
- ---------------- ----------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
T.J. Engibous 200,000 $7,451,340 748,000 1,060,000 $61,554,820 $66,187,700
R.K. Templeton 152,000 $7,508,550 705,000 575,000 $59,515,875 $35,129,325
K.S. Lu 80,000 $4,179,625 400,000 220,000 $33,962,400 $13,875,100
J.C. Scarisbrick 147,000 $5,177,246 20,000 220,000 $ 1,470,300 $13,875,100
D.A. Whitaker 20,000 $ 868,725 80,000 200,000 $ 6,361,200 $12,281,200
- ---------------
<FN>
<F1>(1) The number of shares acquired upon exercise has been adjusted to give
effect to the 1999 two-for-one stock split.
</TABLE>
15
U.S. Pension Plan Table
The following table shows the approximate annual benefits relating to the
company's U.S. pension plan that would be payable as of December 31, 1999 to
employees in higher salary classifications for the average credited earnings
and years of credited service indicated. It assumes retirement at age 65.
Benefits are based on eligible earnings. Eligible earnings include salary and
bonus as shown in the summary compensation table. Other elements of
compensation shown in the summary compensation table or referred to in the
footnotes to that table are not included in eligible earnings.
In 1997, the company's U.S. employees were given the option of continuing to
participate in the pension plan or to participate in a new defined contribution
retirement plan. Mr. Templeton chose to participate in the new plan.
Accordingly, his benefits under the pension plan (discussed in footnote 1) were
frozen as of December 31, 1997. Contributions to the new plan for
Mr. Templeton's benefit are shown in the summary compensation table.
Mr. Scarisbrick participated in the company's U.K. pension plan which is
described on page 17.
<TABLE>
<CAPTION>
Estimated Annual Benefits Under Pension Plan for
Specified Years of Credited Service <F2>(2)<F3>(3)
---------------------------------------------------------------------------------
Average
Credited
Earnings
<F1>(1) 15 Years 20 Years 25 Years 30 Years 35 Years 40 Years 45 Years
- ---------- -------- -------- -------- -------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 500,000 108,781 145,041 181,301 217,562 253,822 291,322 328,822
$1,000,000 221,281 295,041 368,801 442,562 516,322 591,322 666,322
$1,500,000 333,781 445,041 556,301 667,562 778,822 891,322 1,003,822
$2,000,000 446,281 595,041 743,801 892,562 1,041,322 1,191,322 1,341,322
$2,500,000 558,781 745,041 931,301 1,117,562 1,303,822 1,491,322 1,678,822
$3,000,000 671,281 895,041 1,118,801 1,342,562 1,566,322 1,791,322 2,016,322
- ---------------
<FN>
<F1>(1) The average credited earnings is the average of the five consecutive
years of highest earnings.
At December 31, 1999, the named executive officers were credited with the
following years of credited service and had the following average credited
earnings: Mr. Engibous, 22 years, $1,573,515; Mr. Lu 25 years, $648,417; and
Mr. Whitaker, 31 years, $725,559. Mr. Templeton had 16 years of credited
service and $536,761 in average credited earnings as of December 31, 1997.
16
<F2>(2) If the amount otherwise payable under the pension plan should be
restricted by the applicable provisions of ERISA, the amount in excess of
ERISA's restrictions will be paid by the company.
<F3>(3) The benefits under the plan are computed as a single life annuity
beginning at age 65.
The amounts shown in the table reflect the offset provided in the pension plan
under the pension formula adopted July 1, 1989 to comply with the social
security integration requirements. The integration offset is $3,719 for
15 years of credited service, $4,959 for 20 years of credited service, $6,199
for 25 years of credited service, $7,439 for 30 years of credited service,
$8,678 for 35 years of credited service, $8,678 for 40 years of credited
service and $8,678 for 45 years of credited service.
</TABLE>
U.K. Pension Plan Table
The following table shows the approximate annual benefits relating to the
company's U.K. pension plan that would be payable as of December 31, 1999 to
employees in higher salary classifications for the average credited earnings
and years of service indicated. It assumes retirement at age 65. Benefits are
based on eligible earnings. Eligible earnings are principally salary
shown in the summary compensation table. Other elements of compensation shown
in the summary compensation table or referred to in the footnotes to that table
are not included in eligible earnings.
<TABLE>
<CAPTION>
Estimated Annual Benefits Under Pension Plan for
Specified Years of Credited Service<F2>(2)
---------------------------------------------------------------------------------
Average
Credited
Earnings
<F1>(1) 15 Years 20 Years 25 Years 30 Years 35 Years 40 Years 45 Years
- ---------- -------- -------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 300,000 78,750 105,000 131,250 157,500 183,750 200,000 200,000
$ 500,000 131,250 175,000 218,750 262,500 306,250 333,333 333,333
$1,000,000 262,500 350,000 437,500 525,000 612,500 666,667 666,667
$1,500,000 393,750 525,000 656,250 787,500 918,750 1,000,000 1,000,000
- ------------
<FN>
<F1>(1) At December 31, 1999, Mr. Scarisbrick was credited with 23 years of
service and had $312,255 of average credited earnings for purposes of the U.K.
pension plan.
<F2>(2) The benefits under the plan are computed as a joint life annuity
beginning at age 65.
</TABLE>
17
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation paid or awarded to executive
officers for 1999:
The company's executive compensation program is administered by the
Compensation Committee of the Board of Directors (the Committee), which is
composed of the individuals listed below, all of whom are independent
directors of the company. The program consists of base salaries, annual
performance awards and long-term compensation. At higher management levels,
the mix of compensation is weighted more to the performance-based components -
annual performance awards and long-term compensation.
In determining the compensation of the executive officers, the Committee
considered compensation practices of competitor companies (based on the best
available data from as many competitor companies as practicable) and the
relative performance of TI and competitor companies. The competitor companies
are major high-technology competitors of the company. While many of these
companies are included in the S&P Technology Sector Index appearing in the
graph regarding total shareholder return on page 21, these companies are not
the same as the companies comprising that index. The Committee also considered
the contribution of each executive officer toward achieving the company's
prior year and long-term strategic objectives; in this connection, the
Chairman and CEO made recommendations regarding the components of each
executive officer's compensation package except his own.
In its considerations, the Committee did not assign quantitative relative
weights to different factors or follow mathematical formulae. Rather, the
Committee exercised its discretion and made a judgment after considering the
factors it deemed relevant. The Committee's decisions regarding 1999
executive compensation were designed to: (1) align the interests of executive
officers with the interests of the stockholders by providing performance-based
awards; and (2) allow the company to compete for and retain executive officers
critical to the company's success by providing an opportunity for compensation
that is comparable to the levels offered by competitor companies.
Section 162(m) of the Internal Revenue Code generally denies a deduction to
any publicly held corporation for compensation paid in a taxable year to the
company's CEO and four other highest compensated officers to the extent that
the officer's compensation (other than qualified performance-based
compensation) exceeds $1 million. The company believes the Executive Officer
Performance Plan approved in April 1997 allows performance-based compensation
for the company's executive officers that complies with the requirements for
full deductibility under Section 162(m).
Compensation Components and Determination
Compensation decisions for 1999 were made such that TI executive officers will
receive a level of total annual compensation that, when compared to the total
annual compensation of competitor companies, reflects the company's
performance relative to those competitor companies. In order to weight more
of total compensation to performance-based components, the Committee's base
18
salary decisions are intended to provide salaries somewhat lower than the
median level of salaries for similarly situated executive officers of
competitor companies, or of divisions within competitor companies, of similar
size (in terms of total revenues). Annual performance awards for 1999 were
primarily driven by each individual's contribution to the company's primary
strategic focus on the digital signal processing and analog markets, and its
performance on three measures: profit from operations as a percent of
revenues for the year, change in net revenues from the prior year, and total
shareholder return for the year.
Guidelines for awards granted under TI's long-term incentive program were set
with the intention of providing TI executive officers an opportunity for
financial gain equivalent in present value to the opportunity provided by
similarly performing competitor companies through all their long-term
compensation programs. The Committee, in its discretion, adjusts the awards
considering each executive officer's individual contribution to the
implementation of the strategic plan of the company.
Base Salary
The Committee reviewed base salaries for executive officers of competitor
companies and set base salaries for its executive officers somewhat lower than
competitive levels. Mr. Engibous' annual salary during 1999 was below the
median annual salary of CEOs of competitor companies.
Annual Performance Award
The annual performance award varies significantly based on the company's
profitability, revenue growth, and total shareholder return; the achievement
of the strategic objectives of the company; and each individual's contribution
toward that performance. The Committee considered rankings of estimates of
competitor companies' 1999 performance compared to the company's performance,
and granted annual performance awards to executive officers intended to
approximate total annual compensation of executive officers in similarly
performing competitor companies. As a result, Mr. Engibous received an annual
performance award of $2,200,000.
Long-term Compensation
The Committee made long-term compensation determinations in January 1999 and,
for one executive officer, also in September 1999. Stock options constitute
TI's primary long-term incentive vehicle; restricted stock units, which have a
minimum vesting period of three years, may also be awarded in limited
instances. Stock options granted in 1999 were granted at 100% of fair market
value on the date of grant, have a 10-year term, do not become exercisable
until one year after grant, and then become exercisable in four equal annual
installments. Any value actually realized by an executive officer from an
option grant depends completely upon increases in the price of TI common
stock.
The Committee reviewed each officer's continuing contribution to achieving the
strategic objectives of the company, and followed the guidelines for stock
options by granting each officer options at a price per share of $49.80 (the
market value of TI's common stock on January 20, 1999 (the date of grant)
19
giving effect to the subsequent two-for-one stock split). In the case of two
executive officers, the Committee also granted restricted stock units, one of
which is performance based, in recognition of the particular role they are
expected to have in the execution of the strategic objectives of the company.
The Committee intended for the stock option grants to recognize progress
toward accomplishment of the strategic objectives and, since these stock
options will result in increased compensation to an executive officer only if
TI's stock price increases, focus the executive officers on building value for
stockholders. Considering Mr. Engibous' continuing contribution to execution
of the strategic plan for the company, the Committee granted Mr. Engibous an
option to purchase 500,000 shares, resulting in a total long-term compensation
opportunity comparable to those of CEOs of similarly performing competitor
companies.
The ranking of total compensation (annual plus long-term) for Mr. Engibous as
compared to the total compensation of CEOs of competitor companies was
intended to approximate the estimated ranking of TI performance compared to
the performance of competitor companies.
David R. Goode, Chair Wayne R. Sanders
Gerald W. Fronterhouse Clayton K. Yeutter
20
COMPARISON OF TOTAL SHAREHOLDER RETURN
This graph compares TI's total shareholder return with the S&P 500 Index and
the S&P Technology Sector Index over a five-year period, beginning December 31,
1994, and ending December 31, 1999. The total shareholder return assumes $100
invested at the beginning of the period in TI common stock, the S&P 500 and the
S&P Technology Sector Index. It also assumes reinvestment of all dividends.
[A performance graph showing five year
cumulative total return among the Company,
the S&P 500 Index and the S&P Technology
Sector index appears here. The coordinates
used in the graph appear below.]
<TABLE>
<CAPTION>
Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99
<S> <C> <C> <C> <C> <C> <C>
Texas Instruments $100 $139 $174 $248 $473 $1,071
S&P 500(R) Index $100 $138 $169 $226 $290 $ 351
S&P(R) Technology $100 $144 $202 $255 $441 $ 772
Sector Index
</TABLE>
*Assumes that the value of the investment in TI common stock and each index was
$100 on December 31, 1994, and that all dividends were reinvested.
**Year ending December 31.
21
PROPOSAL TO APPROVE AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
The board of directors believes that it is desirable for the stockholders to
consider and act upon a proposal to amend the company's Restated Certificate
of Incorporation (the Certificate). Pursuant to the proposal, the currently
authorized shares of common stock, $1 par value, will be increased from
1,200,000,000 to 2,400,000,000 shares.
Of the 1,200,000,000 currently authorized shares of common stock, as of
December 31, 1999, 813,926,025 were issued (including 1,034,757 treasury
shares). Of the remaining 386,073,975 authorized shares of common stock,
126,206,739 were reserved for issuance in connection with the company's
incentive plans, stock option plans, stock purchase plan and profit sharing
plans.
Except for shares currently reserved as explained above, the company does not
now have any present plan, understanding or agreement to issue additional
shares of common stock. However, the board believes that the proposed
increase in authorized shares of common stock is desirable to enhance the
company's flexibility in connection with possible future actions, such as
stock splits, stock dividends, corporate mergers and acquisitions, financings,
acquisitions of property, use in employee benefit plans, or other corporate
purposes. The board will determine whether, when, and on what terms the
issuance of shares of common stock may be warranted in connection with any of
the foregoing purposes.
If the proposed amendment is approved, all or any of the authorized shares of
common stock may be issued without further action by the stockholders and
without first offering such shares to the stockholders for subscription. The
issuance of common stock otherwise than on a pro-rata basis to all holders of
such stock would reduce the proportionate interests of such stockholders.
Pursuant to the proposal, the first sentence of Article Fourth of the
Certificate will be amended to read as follows:
"The total number of shares of all classes of stock which the
company shall have authority to issue is Two Billion Four
Hundred and Ten Million (2,410,000,000) shares, of which
Ten Million (10,000,000) shall be Preferred Stock with
a par value of $25.00 per share, and two billion four hundred
million (2,400,000,000) shall be Common Stock with a par value
of $1.00 per share."
Other than increasing the authorized shares of common stock from 1,200,000,000
to 2,400,000,000, the proposed amendment in no way changes the Certificate.
The board has unanimously adopted resolutions setting forth the proposed
amendment to the Certificate, declaring its advisability and directing that
the proposed amendment be submitted to the stockholders for their approval at
the annual meeting on April 20, 2000. If adopted by the stockholders, the
amendment will become effective upon filing as required by the General
Corporation Law of Delaware.
The board of directors recommends a vote "FOR" the above proposal.
22
PROPOSAL TO APPROVE THE TEXAS INSTRUMENTS
2000 LONG-TERM INCENTIVE PLAN
Since 1965 the company has had in effect key employee incentive plans,
currently consisting of the Texas Instruments 1996 Long-Term Incentive Plan
and the Texas Instruments Executive Officer Performance Plan. These plans
were designed to provide an additional incentive for the employees who are key
to the company's success in the technological and highly competitive
businesses in which it operates. The board of directors believes that these
plans have been effective in providing such incentive. The board also
believes that, for the company to continue to attract and retain outstanding
individuals at all levels of the company's organization, it must continue to
have incentive plans of these types in place.
The Texas Instruments 1996 Long-Term Incentive Plan (the "1996 Plan") provides
for the grant by a committee of the board of directors of: (1) stock options,
(2) restricted stock and restricted stock units, (3) performance units and
(4) other awards (including stock appreciation rights) valued in whole or in
part by reference to or otherwise based on common stock of the company.
As of December 31, 1999, there were 27,702,177 shares of the common stock of
the company available for grant under the 1996 Plan. The board of directors
recommends that the stockholders approve the adoption of the Texas Instruments
2000 Long-Term Incentive Plan (the "2000 Plan") to replace the existing 1996
Plan.
It is anticipated that the 27,702,177 shares that were available for grant
under the 1996 Plan at December 31, 1999 will continue to be available for
grant after adoption of the 2000 Plan unless granted before such adoption.
Texas Instruments 2000 Long-Term Incentive Plan
The proposed 2000 Plan is attached as Exhibit A to this proxy statement. The
principal features of the 2000 Plan, which is similar to the existing 1996
Plan, are summarized below.
Shares Available for Awards
Under the 2000 Plan, the number of shares of common stock available for
issuance will be 60,000,000 shares, subject to adjustment by the Committee
(defined below) for stock splits and other events as set forth in the 2000
Plan, plus any shares remaining available for the grant of awards under the
1996 Plan. No more than 6,700,000 shares of common stock may be awarded as
restricted stock, restricted stock units, performance units or other-stock
based awards during the term of the 2000 Plan.
Material Features of the 2000 Plan
The 2000 Plan will be administered by a board committee appointed by the board
of directors consisting of not less than three directors (the "Committee").
The Committee will have, among other powers, the power to interpret and
23
construe any provision of the plan, to adopt rules and regulations for
administering the plan, and to perform other acts relating to the plan,
including, at the Committee's discretion, the delegation of any administrative
responsibilities. Decisions of the Committee are final and binding on all
parties.
The Committee will have the sole discretion to grant to eligible participants
one or more equity awards, including options, restricted stock and restricted
stock units, performance units, or any combination thereof. The Committee will
have the sole discretion to determine the number or amount of any award to be
awarded to any participant. If the Committee determines that a dividend or
other distribution, recapitalization, stock split, or other corporate event or
transaction (more fully described in Section 5(e) of the 2000 Plan) affects the
shares in such a way that an adjustment is appropriate to prevent dilution or
enlargement of the benefits, or potential benefits, intended to be made
available under the 2000 Plan, the Committee may adjust: (i) the number and
type of shares (or other securities or property) which may be made the subject
of awards, (ii) the number and type of shares (or other securities or property)
subject to outstanding awards, and (iii) the grant, purchase or exercise price
with respect to any award. The Committee may not take any other action to
reduce the exercise price of any option as established at the time of grant.
Awards will be granted for no cash consideration, or for minimal cash
consideration if required by applicable law. Awards may provide that upon
their exercise the holder will receive cash, stock, other securities, other
awards, other property or any combination thereof, as the Committee will
determine. Any shares of stock deliverable under the 2000 Plan may consist in
whole or in part of authorized and unissued shares or treasury shares.
Except in the case of awards made through assumption of, or in substitution
for, outstanding awards previously granted by an acquired company, and except
as a result of an adjustment event referred to above, the exercise price of
stock under any stock option, the grant price of any stock appreciation right,
and the purchase price of any security which may be purchased under any other
stock-based award will not be less than 100% of the fair market value of the
stock or other security on the date of the grant of the option, right or award.
The Committee will determine the times at which options and other purchase
rights may be exercised and the methods by which and the forms in which payment
of the purchase price may be made. Determinations of fair market value under
the 2000 Plan will be made in accordance with methods or procedures established
by the Committee.
The Committee may impose restrictions on restricted stock and restricted stock
units at its discretion. These restrictions may lapse as the Committee deems
appropriate. Upon termination of employment during the restriction period, all
restricted stock and restricted stock units will be forfeited, unless the
Committee determines otherwise.
Any performance units granted will vest upon the attainment of performance
goals. The Committee will establish the performance criteria, the length of
the performance period and the form and time of payment of the award. In
addition, the Committee may establish the terms and conditions of other
stock-based awards.
24
Unless otherwise determined by the Committee, no award granted under the 2000
Plan may be transferred or otherwise encumbered by the individual to whom it is
granted, other than by will, by designation of a beneficiary, or by the laws of
descent and distribution. During the individual's lifetime, each award will be
exercisable only by the individual or by the individual's guardian or legal
representative.
No awards may be granted under the 2000 Plan after the tenth anniversary of the
effective date of the 2000 Plan.
Eligibility and Participation
Any employee of the company, including any officer or employee-director, will
be eligible to receive awards under the 2000 Plan. Additionally, any
individual who provides services to the company or to an affiliate of the
company as an independent contractor is eligible to receive awards. The
company had 38,197 employees as of December 31, 1999. Directors who are not
full-time or part-time officers or employees of the company will not be
eligible to participate in the plan.
Amendment and Termination
The board of directors may amend, alter, discontinue or terminate the plan or
any portion of the plan any time. However, stockholder approval must be
obtained for any plan adjustment that would increase the number of shares
available for awards.
Plan Awards for Certain Individuals
Any awards under the 2000 Plan will be at the discretion of the Committee.
Therefore, it is not possible at present to determine the amount or form of any
award that will be available for grant to any individual during the term of the
2000 Plan or that would have been granted during 1999 had the 2000 Plan been in
effect.
Tax Matters
Counsel for the company has advised that, in the case of an incentive stock
option, if an optionee exercises the option during or within three months of
employment and does not dispose of the shares within two years of the date of
grant of the option or one year after the transfer of the shares to the
optionee, the optionee will be entitled for federal income tax purposes to
treat any profit which may be realized upon the disposition of the shares as a
long-term capital gain. In contrast, a person who receives an option under the
plan which is not an incentive stock option or who does not comply with the
conditions noted above will generally realize ordinary income at the time of
exercise in the amount of the excess, if any, of the fair market value of the
stock on the date of exercise over the option price. In the case of incentive
stock options, any excess of the fair market value of the stock at the time of
exercise over the option price would be an item of income for purposes of the
individual's alternative minimum tax.
25
Counsel for the company has also advised that a person who receives a grant of
an option, whether it is an incentive stock option or an option which is not an
incentive stock option, will not be in receipt of taxable income under the
Internal Revenue Code upon the making of the grant. The company will not be
allowed any deduction for federal income tax purposes upon the grant or
exercise of incentive stock options (assuming the optionee complies with the
conditions noted above). The company will be entitled to a deduction for
federal income tax purposes in an amount equal to the ordinary income, if any,
realized by an optionee who (a) exercises an option which is not an incentive
stock option, or (b) disposes of stock which was acquired pursuant to the
exercise of an incentive stock option prior to the end of the required holding
period described in the immediately preceding paragraph.
The board of directors recommends a vote "FOR" the Texas Instruments 2000
Long-Term Incentive Plan.
26
ADDITIONAL INFORMATION
Financial Statements
The consolidated financial statements and auditor's report, the management
discussion and analysis of financial condition and results of operations and
information concerning the quarterly financial data for the fiscal year ended
December 31, 1999 are attached as Exhibit B to this proxy statement.
Voting Securities
As of February 22, 2000, _______________ shares of the company's common stock
were outstanding. This is the only class of capital stock entitled to vote at
the meeting. Each holder of common stock has one vote for each share held. As
stated in the notice of meeting, holders of record of the common stock at the
close of business on February 22, 2000 may vote at the meeting or any
adjournment of the meeting.
Share Ownership of Certain Persons
The following table shows (a) the only persons that have reported beneficial
ownership of more than 5% of the common stock of the company, and (b) the
ownership of the company's common stock by the named executive officers, and
all executive officers and directors as a group. Persons generally
"beneficially own" shares if they have either the right to vote those shares
or dispose of them. More than one person may be considered to beneficially own
the same shares.
<TABLE>
<CAPTION>
Shares Owned At Percent of
Name and Address December 31, 1999 Class
- -------------------------------- ----------------- ----------
<S> <C> <C>
FMR Corp.
82 Devonshire Street <F1>(1) %
Boston, MA 02109
Thomas J. Engibous 1,232,378<F2>(2) *
Richard K. Templeton 969,547<F2>(2) *
Keh-Shew Lu 562,096<F2>(2) *
John C. Scarisbrick 157,004<F2>(2) *
Delbert A. Whitaker 197,108<F2>(2) *
All executive officers and 5,184,693<F2>(2)<F3>(3) *
directors as a group
- ---------------
*Less than 1%.
<FN>
<F1>(1) The company understands that, as of December 31, 1999, (a) FMR Corp.
and its chairman, Edward C. Johnson 3d, had sole dispositive power with respect
to all of the above shares and FMR Corp. had sole voting power with respect to
27
_______________ of the above shares, and (b) the above shares include
_______________ shares beneficially owned by Fidelity Management & Research
Company, a wholly-owned subsidiary of FMR Corp., as a result of acting as
investment advisor to several investment companies, and as a result of acting
as a sub-advisor to Fidelity American Special Situations Trust.
<F2>(2) Includes (a) shares subject to acquisition within 60 days by Messrs.
Engibous, Templeton, Lu, Scarisbrick and Whitaker for 1,103,000,
895,000, 475,000, 95,000 and 145,000 shares, respectively, (b) shares credited
to profit sharing stock accounts for Messrs. Engibous, Templeton, Lu,
Scarisbrick and Whitaker in the amounts of 8,685, 5,311, 8,290, 2,959, and
15,271, respectively, and (c) shares subject to restricted stock unit awards
for Messrs. Engibous, Templeton, Lu, Scarisbrick and Whitaker in the amounts of
80,000, 60,000, 76,000, 40,000 and 28,000, respectively. Excludes shares held
by a family member if a director or officer has disclaimed beneficial
ownership.
<F3>(3) Includes (a) 4,296,700 shares subject to acquisition within 60 days,
(b) 118,439 shares credited to profit sharing stock accounts and (c) 368,964
shares subject to restricted stock unit awards.
As of December 31, 1999, the TI Employees Master Profit Sharing Trust held
39,605,149 shares (4.9%) of the company's common stock. Pursuant to the terms
of the trust, participants have the power to determine the voting and, to the
extent permitted, disposition of shares held by the trust.
</TABLE>
Certain Business Relationships
Mr. Yeutter, a member of the company's board of directors, is of counsel to
the law firm of Hogan and Hartson LLP. Telogy Networks, Inc., a subsidiary of
the company, engaged the services of Hogan and Hartson LLP during 1999.
Joseph F. Hubach, senior vice president and general counsel of the company, is
the brother of Francis P. Hubach, Jr., partner in charge of the Dallas office
of the law firm of Jones, Day, Reavis & Pogue. The company has engaged the
services of Jones, Day, Reavis & Pogue during 1999.
Cost of Solicitation
The solicitation is made on behalf of the board of directors of the company.
The company will pay the cost of soliciting these proxies. We will reimburse
brokerage houses and other custodians, nominees and fiduciaries for reasonable
expenses they incur in sending these proxy materials to you if you are a
beneficial holder of our shares.
Without receiving additional compensation, officials and regular employees of
the company may solicit proxies personally, by telephone, fax or E-mail from
some stockholders if proxies are not promptly received. We have also hired
Georgeson & Company, Inc. to assist in the solicitation of proxies at a cost of
$12,000 plus out-of-pocket expenses.
28
Proposals of Stockholders
If you wish to submit a proposal for possible inclusion in the company's 2001
proxy material, we must receive your notice, in accordance with rules of the
Securities and Exchange Commission, on or before November 3, 2000.
If you wish to submit a proposal at the 2001 annual meeting (but not seek
inclusion of the proposal in the company's proxy material), we must receive
your notice, in accordance with the company's by-laws, on or before January
20, 2001. Otherwise, the proxies named by the board of directors for the
meeting may exercise discretionary voting authority with respect to the
proposal, without any discussion of the proposal in the company's proxy
material.
Suggestions from stockholders concerning the company's business are welcome and
all will be carefully considered by the company's management. So that your
suggestions receive appropriate review, the Stockholder Relations and Public
Policy Committee from time to time reviews correspondence from stockholders and
management's responses. This way, stockholders are given access at the board
level without having to resort to formal stockholder proposals. Generally, the
board prefers you present your views in this manner rather than through the
process of formal stockholder proposals.
Quorum Requirement
A quorum of stockholders is necessary to hold a valid meeting. If at least a
majority of the shares of TI stock issued and outstanding and eligible to vote
are present in person or by proxy, a quorum will exist.
Vote Required
The 10 nominees receiving the greatest number of votes cast by those entitled
to vote will be elected.
A majority vote of the outstanding common stock is necessary for the adoption
of the proposed amendment to the Company's Restated Certificate of
Incorporation.
For all other matters submitted at the meeting (including the proposal to
approve the Texas Instruments 2000 Long-Term Incentive Plan), an affirmative
vote of the majority of the shares present in person or by proxy is necessary
for approval.
We do not expect any matters to be presented for a vote at the annual meeting
other than: (1) the election of directors, (2) the proposal to amend the
Company's Restated Certificate of Incorporation, and (3) the proposal to
approve the Texas Instruments 2000 Long-Term Incentive Plan. If you grant a
proxy, the persons named in the proxy will have the discretion to vote your
shares on any additional matters properly presented for a vote at the meeting.
29
Under Delaware law and the company's Restated Certificate of Incorporation and
By-Laws, the aggregate number of votes entitled to be cast by all stockholders
present in person or represented by proxy at the meeting, whether those
stockholders vote FOR, AGAINST or abstain from voting, will be counted for
purposes of determining the minimum number of affirmative votes required for
approval of such matters. The total number of votes cast FOR each of these
matters will be counted for purposes of determining whether sufficient
affirmative votes have been cast. An abstention from voting on a matter by a
stockholder present in person or represented by proxy at the meeting has the
same legal effect as a vote AGAINST the matter even though the stockholder or
interested parties analyzing the results of the voting may interpret such a
vote differently.
Telephone and Internet Voting
Shares Directly Registered in the Name of the Stockholder. Stockholders with
shares registered directly with Harris Bank may vote telephonically by calling
Harris Bank at (888) ____________ or may vote via the Internet at the following
address on the World Wide Web:
www.harrisbank.com/wproxy
Shares Registered in the Name of a Brokerage Firm or Bank. A number of
brokerage firms and banks offer telephone and Internet voting options. These
programs differ from the program provided by Harris Bank for shares registered
in the name of the stockholder. Check the information forwarded by your bank,
broker or other holder of record to see which options are available to you.
The telephone and Internet voting procedures are designed to authenticate
stockholders' identities, to allow stockholders to give their voting
instructions and to confirm that stockholders' instructions have been recorded
properly. The company has been advised by counsel that the telephone and
Internet voting procedures that have been made available through Harris Bank
are consistent with the requirements of applicable law. Stockholders voting
via the Internet through Harris Bank should understand that there may be costs
associated with electronic access, such as usage charges from telephone
companies and Internet access providers, that must be borne by the stockholder.
30
Independent Auditors
The board has, in accordance with the recommendation of its Audit Committee,
chosen the firm of Ernst & Young LLP as independent auditors for the company.
Representatives of Ernst & Young are expected to be present, and to be
available to respond to appropriate questions, at the annual meeting. They
will have the opportunity to make a statement if they desire to do so; they
have indicated that, as of this date, they do not.
By Order of the Board of Directors,
-----------------------------
Richard J. Agnich
Senior Vice President and
Secretary
Dallas, Texas
March ___, 2000
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DIRECTIONS TO ANNUAL MEETING SITE
From DFW Airport
Take the North Airport exit to 635E. Take 635E to the Greenville Avenue Exit.
Turn right on Greenville. Turn right on Forest Lane. Texas Instruments will
be on your right at the second traffic light. Please use the south entrance
to the building.
Directions from Love Field Airport
Take Mockingbird Lane to 75N (Central Expressway). Travel north on 75 to the
Forest Lane Exit. Turn right on Forest Lane. You will pass two traffic
lights. At the third light, the entrance to Texas Instruments will be on your
left. Please use the south entrance to the building.
EXHIBIT A
TEXAS INSTRUMENTS 2000 LONG-TERM INCENTIVE PLAN
As Adopted April 20, 2000
Section 1. Purpose.
The Texas Instruments 2000 Long-Term Incentive Plan is designed to
enhance the ability of the Company to attract and retain exceptionally
qualified individuals and to encourage them to acquire a proprietary interest
in the growth and performance of the Company.
Section 2. Definitions.
As used in the Plan, the following terms shall have the meanings set
forth below:
(a) "Affiliate" shall mean (i) any entity that, directly or indirectly,
is controlled by the Company or (ii) any entity in which the Company has a
significant equity interest, in either case as determined by the Committee.
(b) "Award" shall mean any Option, award of Restricted Stock, Restricted
Stock Unit, Performance Unit or Other Stock-Based Award granted under the
Plan.
(c) "Award Agreement" shall mean any written agreement, contract or
other instrument or document evidencing any Award granted under the Plan,
which may, but need not, be executed or acknowledged by a Participant.
(d) "Board" shall mean the board of directors of the Company.
(e) "Cash Flow" for a period shall mean net cash provided by operating
activities as determined by the Company's external auditors in accordance with
Generally Accepted Accounting Principles.
(f) "Change of Control" shall mean the first to occur of:
(i) an individual, corporation, partnership, group,
associate or other entity or "person," as such term is defined in
Section 14(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"), other than the Company or any employee benefit
plan(s) sponsored by the Company, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of 30% or more of the combined voting power of the
Company's outstanding securities ordinarily having the right to
vote at elections of directors;
(ii) individuals who constitute the Board of Directors of
the Company on the effective date of the Plan (the "Incumbent
Board") cease for any reason to constitute at least a majority
thereof, provided that any Approved Director, as hereinafter
defined, shall be, for purposes of this subsection (ii),
considered as though such person were a member of the Incumbent
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Board. An "Approved Director," for purposes of this subsection
(ii), shall mean any person becoming a director subsequent to the
effective date of the Plan whose election, or nomination for
election by the Company's shareholders, was approved by a vote of
at least three-quarters of the directors comprising the Incumbent
Board (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a
nominee of the Company for director), but shall not include any
such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of an individual, corporation,
partnership, group, associate or other entity or "person" other
than the Board;
(iii) the approval by the shareholders of the Company of a
plan or agreement providing (A) for a merger or consolidation of
the Company other than with a wholly-owned subsidiary and other
than a merger or consolidation that would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity)
more than 65% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (B) for a sale,
exchange or other disposition of all or substantially all of the
assets of the Company. If any of the events enumerated in this
subsection (iii) occurs, the Committee shall determine the
effective date of the Change of Control resulting therefrom for
purposes of the Plan;
(iv) In addition to the events described in subsections
(i), (ii) and (iii), it shall be a "Change of Control" for
purposes hereof for any Participant principally employed in the
business of a Designated Business Unit, as hereinafter defined, if
an event described in subsections (i), (ii) or (iii) shall occur,
except that for purposes of this subsection (iv), references in
such subsections to the "Company" shall be deemed to refer to the
Designated Business Unit in the business of which the Participant
is principally employed. A Change in Control described in this
subsection (iv) shall apply only to a Participant employed
principally by the affected Designated Business Unit. For
purposes of this subsection (iv), "Designated Business Unit" shall
mean any business down to the SBE minus 2 level sold by the
Company in which the Company does not retain an equity interest
and any other business unit identified as a Designated Business
Unit by the Committee from time to time.
(g) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
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(h) "Committee" shall mean a committee of the Board designated
by the Board to administer the Plan. Unless otherwise determined by the
Board, the Compensation Committee designated by the Board shall be the
Committee under the Plan.
(i) "Company" shall mean Texas Instruments Incorporated, together with
any successor thereto.
(j) "Cycle Time Improvement" shall mean a reduction of the actual time
a specific process relating to a product or service of the Company takes to
accomplish.
(k) "Earnings Before Income Taxes, Depreciation and Amortization
(EBITDA)" shall mean net income from continuing operations plus provision for
income taxes and depreciation and amortization expenses as determined by the
Company's external auditors in accordance with Generally Accepted Accounting
Principles.
(l) "Earnings Per Share" shall mean earnings per share as determined by
the Company's external auditors in accordance with Generally Accepted
Accounting Principles.
(m) "Executive Group" shall mean every person who is expected by the
Committee to be both (i) a "covered employee" as defined in Section 162(m) of
the Code as of the end of the taxable year in which payment of the Award may
be deducted by the Company, and (ii) the recipient of compensation of more
than $1,000,000 for that taxable year.
(n) "Fair Market Value" shall mean, with respect to any property
(including, without limitation, any Shares or other securities) the fair
market value of such property determined by such methods or procedures as
shall be established from time to time by the Committee.
(o) "Incentive Stock Option" shall mean an option granted under Section
6 that is intended to meet the requirements of Section 422 of the Code, or any
successor provision thereto.
(p) "Manufacturing Process Yield" shall mean the good units produced as
a percent of the total units processed.
(q) "Market Share" shall mean the percent of sales of the total
available market in an industry, product line or product attained by the
Company or one of its business units during a time period.
(r) "Net Revenue Per Employee" in a period shall mean net revenue
divided by the average number of employees of the Company, with average
defined as the sum of the number of employees at the beginning and ending of
the period divided by two.
(s) "Non-Qualified Stock Option" shall mean an option granted under
Section 6 that is not intended to be an Incentive Stock Option.
(t) "Option" shall mean an Incentive Stock Option or a Non-Qualified
Stock Option.
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(u) "Other Stock-Based Award" shall mean any right granted under
Section 9.
(v) "Participant" shall mean an individual granted an Award under the
Plan.
(w) "Performance Unit" shall mean any right granted under Section 8.
(x) "Plan" shall mean this Texas Instruments 2000 Long-Term Incentive
Plan.
(y) "Profit from Operations" for a period shall mean the profit from
operations as determined by the Company's external auditors in accordance with
Generally Accepted Accounting Principles. Notwithstanding the foregoing, any
"Qualifying" item shall be excluded from "Profit from Operations" if the
Compensation Committee of the Board of Directors, in its sole discretion,
shall determine that such exclusion is in the best interest of the Company.
For purposes of the preceding sentence, the term "Qualifying" shall mean a
gain/loss which exceeds both (1) three percent (3%) of "Profit from
Operations" excluding employer profit sharing expenses and excluding the
gain/income or loss, and (2) Ten Million Dollars ($10,000,000.00) or more.
(z) "Restricted Stock" shall mean any Share granted under Section 7.
(aa) "Restricted Stock Unit" shall mean a contractual right granted
under Section 7 that is denominated in Shares, each of which represents a
right to receive the value of a Share (or a percentage of such value, which
percentage may be higher than 100%) upon the terms and conditions set forth in
the Plan and the applicable Award Agreement.
(bb) "Return On Capital" for a period shall mean net income divided by
shareholders equity as determined by the Company's external auditors in
accordance with Generally Accepted Accounting Principles.
(cc) "Return On Common Equity" for a period shall mean net income less
preferred stock dividends divided by total shareholders equity, less amounts,
if any, attributable to preferred stock.
(dd) "Return On Net Assets" for a period shall mean net income less
preferred stock dividends divided by the difference of average total assets
less average non-debt liabilities, with average defined as the sum of assets
or liabilities at the beginning and ending of the period divided by two.
(ee) "Revenue Growth" shall mean the percentage change in revenue (as
defined in Statement of Financial Accounting Concepts No. 6, published by the
Financial Accounting Standards Board) from one period to another.
(ff) "Shares" shall mean shares of the common stock of the Company,
$1.00 par value.
(gg) "Substitute Awards" shall mean Awards granted in assumption of, or
in substitution for, outstanding awards previously granted by a company
acquired by the Company or with which the Company combines.
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(hh) "Total Shareholder Return" shall mean the sum of the appreciation
in the Company's stock price and dividends paid on the common stock of the
Company over a given period of time.
Section 3. Eligibility.
(a) Any individual who is employed by the Company or any Affiliate, and
any individual who provides services to the Company or any Affiliate as an
independent contractor, including any officer or employee-director, shall be
eligible to be selected to receive an Award under the Plan.
(b) An individual who has agreed to accept employment by, or to provide
services to, the Company or an Affiliate shall be deemed to be eligible for
Awards hereunder as of the date of such agreement.
(c) Directors who are not full-time or part-time officers or employees
are not eligible to receive Awards hereunder.
(d) Holders of options and other types of Awards granted by a company
acquired by the Company or with which the Company combines are eligible for
grant of Substitute Awards hereunder in connection with such acquisition or
combination transaction.
Section 4. Administration.
(a) The Plan shall be administered by the Committee. The Committee
shall be appointed by the Board and shall consist of not less than three
directors. The Board may designate one or more directors as alternate members
of the Committee who may replace any absent or disqualified member at any
meeting of the Committee. No member or alternate member of the Committee
shall be eligible, while a member or alternate member, for participation in
the Plan. The Committee may issue rules and regulations for administration of
the Plan. It shall meet at such times and places as it may determine. A
majority of the members of the Committee shall constitute a quorum.
(b) Subject to the terms of the Plan and applicable law, the Committee
shall have full power and authority to: (i) designate Participants;
(ii) determine the type or types of Awards (including Substitute Awards) to be
granted to each Participant under the Plan; (iii) determine the number of
Shares to be covered by (or with respect to which payments, rights, or other
matters are to be calculated in connection with) Awards; (iv) determine the
terms and conditions of any Award; (v) determine whether, to what extent, and
under what circumstances Awards may be settled or exercised in cash, Shares,
other securities, other Awards, or other property, or canceled, forfeited or
suspended, and the method or methods by which Awards may be settled,
exercised, canceled, forfeited or suspended; (vi) determine whether, to what
extent, and under what circumstances cash, Shares, other securities, other
Awards, other property, and other amounts payable with respect to an Award
under the Plan shall be deferred either automatically or at the election of
the holder thereof or of the Committee; (vii) interpret and administer the
Plan and any instrument or agreement relating to, or Award made under, the
Plan; (viii) establish, amend, suspend or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration
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of the Plan; (ix) determine whether and to what extent Awards should comply or
continue to comply with any requirement of statute or regulation; and (x) make
any other determination and take any other action that the Committee deems
necessary or desirable for the administration of the Plan.
(c) All decisions of the Committee shall be final, conclusive and
binding upon all parties, including the Company, the stockholders and the
Participants.
Section 5. Shares Available for Awards.
(a) Subject to adjustment as provided below, the number of Shares
available for issuance under the Plan shall be 60,000,000 shares, plus any
Shares remaining available for grant of awards under the Company's 1996 Long-
Term Incentive Plan on the effective date of the Plan. Notwithstanding the
foregoing and subject to adjustment as provided in Section 5(e), (i) no
Participant may receive Options and stock appreciation rights under the Plan
in any calendar year that relate to more than 1,000,000 Shares and (ii) the
maximum number of Shares with respect to which Awards may be made under
Sections 7, 8 and 9 is 6,700,000. Awards may be made under Sections 7 and 9
without regard to such limit if (x) such Awards are made in satisfaction of
Company obligations to employees that would otherwise be paid in cash or
(y) such Awards are issued in connection with the exercise of an Option or
other Award hereunder.
(b) If, after the effective date of the Plan, any Shares covered by an
Award, or to which such an Award relates, are forfeited, or if such an Award
otherwise terminates without the delivery of Shares or of other consideration,
then the Shares covered by such Award, or to which such Award relates, to the
extent of any such forfeiture or termination, shall again be, or shall become,
available for issuance under the Plan. For purposes of this Section 5(b),
awards and options granted under any previous option or long-term incentive
plan of the Company (other than a Substitute Award granted under any such
plan) shall be treated as Awards.
(c) In the event that any Option or other Award granted hereunder
(other than a Substitute Award) is exercised through the delivery of Shares,
or in the event that withholding tax liabilities arising from such Option or
Award are satisfied by the withholding of Shares by the Company, the number of
Shares available for Awards under the Plan shall be increased by the number of
Shares so surrendered or withheld. For purposes of this Section 5(c), awards
and options granted under any previous option or long-term incentive plan of
the Company (other than a Substitute Award granted under any such plan) shall
be treated as Awards.
(d) Any Shares delivered pursuant to an Award may consist, in whole or
in part, of authorized and unissued Shares or of treasury Shares.
(e) In the event that the Committee shall determine that any dividend
or other distribution (whether in the form of cash, Shares, other securities,
or other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Shares or other securities of the Company, issuance
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of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares
such that an adjustment is determined by the Committee to be appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Committee shall, in
such manner as it may deem equitable, adjust any or all of (i) the number and
type of Shares (or other securities or property) which thereafter may be made
the subject of Awards, including the aggregate and individual limits specified
in Section 5(a), (ii) the number and type of Shares (or other securities or
property) subject to outstanding Awards, and (iii) the grant, purchase, or
exercise price with respect to any Award or, if deemed appropriate, make
provision for a cash payment to the holder of an outstanding Award; provided,
however, that the number of Shares subject to any Award denominated in Shares
shall always be a whole number.
Section 6. Options.
The Committee is hereby authorized to grant Options to Participants with
the following terms and conditions and with such additional terms and
conditions, in either case not inconsistent with the provisions of the Plan,
as the Committee shall determine:
(a) The purchase price per Share under an Option shall be determined by
the Committee; provided, however, that, except in the case of Substitute
Awards, such purchase price shall not be less than the Fair Market Value of a
Share on the date of grant of such Option.
(b) The term of each Option shall be fixed by the Committee.
(c) The Committee shall determine the time or times at which an Option
may be exercised in whole or in part, and the method or methods by which, and
the form or forms, including, without limitation, cash, Shares, other Awards,
or other property, or any combination thereof, having a Fair Market Value on
the exercise date equal to the relevant exercise price, in which, payment of
the exercise price with respect thereto may be made or deemed to have been
made.
(d) The terms of any Incentive Stock Option granted under the Plan
shall comply in all respects with the provisions of Section 422 of the Code,
or any successor provision thereto, and any regulations promulgated
thereunder.
Section 7. Restricted Stock and Restricted Stock Units.
(a) The Committee is hereby authorized to grant Awards of Restricted
Stock and Restricted Stock Units to Participants.
(b) Shares of Restricted Stock and Restricted Stock Units shall be
subject to such restrictions as the Committee may impose (including, without
limitation, any limitation on the right to vote a Share of Restricted Stock or
the right to receive any dividend or other right or property), which
restrictions may lapse separately or in combination at such time or times, in
such installments or otherwise, as the Committee may deem appropriate. If the
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vesting conditions applicable to an Award of Restricted Stock or Restricted
Stock Units relate exclusively to the passage of time and continued employment
or provision of services, or refraining therefrom, such time period shall
consist of not less than 36 months, except that the foregoing restriction
shall not apply to such Awards if they meet any of the conditions described in
Section 5(a)(x) or (y).
(c) Any share of Restricted Stock granted under the Plan may be
evidenced in such manner as the Committee may deem appropriate including,
without limitation, book-entry registration or issuance of a stock certificate
or certificates. In the event any stock certificate is issued in respect of
shares of Restricted Stock granted under the Plan, such certificate shall be
registered in the name of the Participant and shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such
Restricted Stock.
(d) Except as otherwise determined by the Committee, upon termination
of employment or cessation of the provision of services (as determined under
criteria established by the Committee) for any reason during the applicable
restriction period, all Shares of Restricted Stock and all Restricted Stock
Units still, in either case, subject to restriction shall be forfeited and
reacquired by the Company; provided, however, that the Committee may, when it
finds that a waiver would be in the best interests of the Company, waive in
whole or in part any or all remaining restrictions with respect to Shares of
Restricted Stock or Restricted Stock Units.
Section 8. Performance Units.
(a) The Committee is hereby authorized to grant Performance Units to
Participants.
(b) Subject to the terms of the Plan, a Performance Unit granted under
the Plan (i) may be denominated or payable in cash, Shares (including,
without limitation, Restricted Stock), other securities, other Awards, or
other property and (ii) shall confer on the holder thereof rights valued as
determined by the Committee and payable to, or exercisable by, the holder of
the Performance Unit, in whole or in part, upon the achievement of such
performance goals during such performance periods as the Committee shall
establish. Subject to the terms of the Plan, the performance goals to be
achieved during any performance period, the length of any performance period,
the amount of any Performance Unit granted and the amount of any payment or
transfer to be made pursuant to any Performance Unit shall be determined by
the Committee.
Section 9. Other Stock-based Awards.
The Committee is hereby authorized to grant to Participants such other
Awards (including, without limitation, stock appreciation rights and rights to
dividends and dividend equivalents) that are denominated or payable in, valued
in whole or in part by reference to, or otherwise based on or related to,
Shares (including, without limitation, securities convertible into Shares) as
are deemed by the Committee to be consistent with the purposes of the Plan.
Subject to the terms of the Plan, the Committee shall determine the terms and
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conditions of such Awards. Shares or other securities delivered pursuant to a
purchase right granted under this Section 9 shall be purchased for such
consideration, which may be paid by such method or methods and in such form or
forms, including, without limitation, cash, Shares, other securities, other
Awards, or other property, or any combination thereof, as the Committee shall
determine, the value of which consideration, as established by the Committee,
shall, except in the case of Substitute Awards, not be less than the Fair
Market Value of such Shares or other securities as of the date such purchase
right is granted.
Section 10. General Provisions Applicable to Awards.
(a) Awards shall be granted for no cash consideration or for such
minimal cash consideration as may be required by applicable law.
(b) Awards may, in the discretion of the Committee, be granted either
alone or in addition to or in tandem with any other Award or any award granted
under any other plan of the Company. Awards granted in addition to or in
tandem with other Awards, or in addition to or in tandem with awards granted
under any other plan of the Company, may be granted either at the same time as
or at a different time from the grant of such other Awards or awards.
(c) Subject to the terms of the Plan, payments or transfers to be made
by the Company upon the grant, exercise or payment of an Award may be made in
such form or forms as the Committee shall determine including, without
limitation, cash, Shares, other securities, other Awards, or other property,
or any combination thereof, and may be made in a single payment or transfer,
in installments, or on a deferred basis, in each case in accordance with rules
and procedures established by the Committee. Such rules and procedures may
include, without limitation, provisions for the payment or crediting of
reasonable interest on installment or deferred payments or the grant or
crediting of dividend equivalents in respect of installment or deferred
payments.
(d) Unless the Committee shall otherwise determine, (i) no Award and no
right under any such Award, shall be assignable, alienable, saleable or
transferable by a Participant otherwise than by will or by the laws of descent
and distribution; provided, however, that, if so determined by the Committee,
a Participant may, in the manner established by the Committee, designate a
beneficiary or beneficiaries to exercise the rights of the Participant, and to
receive any property distributable, with respect to any Award upon the death
of the Participant; (ii) each Award, and each right under any Award, shall be
exercisable during the Participant's lifetime only by the Participant or, if
permissible under applicable law, by the Participant's guardian or legal
representative; and (iii) no Award and no right under any such Award, may be
pledged, alienated, attached, or otherwise encumbered, and any purported
pledge, alienation, attachment or encumbrance thereof shall be void and
unenforceable against the Company. The restrictions imposed by this paragraph
shall not apply to any Award which has been fully exercised, earned or paid,
as the case may be, and shall not preclude forfeiture of an Award in
accordance with the terms thereof.
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(e) All certificates for Shares or other securities delivered under the
Plan pursuant to any Award or the exercise thereof shall be subject to such
stop transfer orders and other restrictions as the Committee may deem
advisable under the Plan or the rules, regulations, and other requirements of
the Securities and Exchange Commission, any stock exchange upon which such
Shares or other securities are then listed, and any applicable Federal or
state securities laws, and the Committee may cause a legend or legends to be
put on any such certificates to make appropriate reference to such
restrictions.
(f) Every Award (other than an option or stock appreciation right) to a
member of the Executive Group shall include a pre-established formula, such
that payment, retention or vesting of the Award is subject to the achievement
by the Company or any unit thereof during a performance period or periods, as
determined by the Committee, of a level or levels, as determined by the
Committee, of one or more of the following performance measures: (i) Cash
Flow, (ii) Cycle Time Improvement, (iii) Earnings Per Share, (iv) EBITDA,
(v) Manufacturing Process Yield, (vi) Market Share, (vii) Net Revenue Per
Employee, (viii) Profit from Operations, (ix) Return on Capital, (x) Return on
Common Equity, (xi) Return on Net Assets, (xii) Revenue Growth or (xiii) Total
Shareholder Return. For any Award (other than an option or stock appreciation
right) subject to any such pre-established formula, no more than $5,000,000
can be paid in satisfaction of such Award to any Participant; provided if such
Award is denominated in shares, the maximum limit shall be 2,000,000 shares in
lieu of such dollar limit.
(g) Unless specifically provided to the contrary in any Award
Agreement, upon a Change in Control, all Awards shall become fully vested and
exercisable, and any restrictions applicable to any Award shall automatically
lapse.
Section 11. Amendment and Termination.
(a) Except to the extent prohibited by applicable law and unless
otherwise expressly provided in an Award Agreement or in the Plan, the Board
may amend, alter, suspend, discontinue, or terminate the Plan or any portion
thereof at any time; provided, however, that no such amendment, alteration,
suspension, discontinuation or termination shall be made without
(i) shareholder approval if such approval is necessary to comply with any tax
or regulatory requirement for which or with which the Board deems it necessary
or desirable to qualify or comply or (ii) the consent of the affected
Participant, if such action would adversely affect the rights of such
Participant under any outstanding Award. Notwithstanding anything to the
contrary herein, the Committee may amend the Plan in such manner as may be
necessary to enable the Plan to achieve its stated purposes in any
jurisdiction outside the United States in a tax-efficient manner and in
compliance with local rules and regulations.
(b) The Committee may waive any conditions or rights under, amend any
terms of, or amend, alter, suspend, discontinue or terminate, any Award
theretofore granted, prospectively or retroactively, without the consent of
any relevant Participant or holder or beneficiary of an Award, provided,
however, that no such action shall impair the rights of any affected
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Participant or holder or beneficiary under any Award theretofore granted under
the Plan; and provided further that, except as provided in Section 5(e), no
such action shall reduce the exercise price of any Option established at the
time of grant thereof.
(c) The Committee shall be authorized to make adjustments in the terms
and conditions of, and the criteria included in, Awards in recognition of
unusual or nonrecurring events (including, without limitation, the events
described in Section 5(e) affecting the Company, or the financial statements
of the Company) or of changes in applicable laws, regulations or accounting
principles, whenever the Committee determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.
(d) Any provision of the Plan or any Award Agreement to the contrary
notwithstanding, the Committee may cause any Award granted hereunder to be
canceled in consideration of a cash payment or alternative Award made to the
holder of such canceled Award equal in value to the Fair Market Value of such
canceled Award.
(e) The Committee may correct any defect, supply any omission, or
reconcile any inconsistency in the Plan or any Award in the manner and to the
extent it shall deem desirable to carry the Plan into effect.
Section 12. Miscellaneous.
(a) No employee, independent contractor, Participant or other person
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of employees, independent contractors,
Participants, or holders or beneficiaries of Awards under the Plan. The terms
and conditions of Awards need not be the same with respect to each recipient.
(b) The Committee may delegate to one or more officers or managers of
the Company, or a committee of such officers or managers, the authority,
subject to such terms and limitations as the Committee shall determine, to
grant Awards to, or to cancel, modify, waive rights with respect to, alter,
discontinue, suspend or terminate Awards held by, employees who are not
officers or directors of the Company for purposes of Section 16 of the
Securities Exchange Act of 1934, as amended; provided, however, that any
delegation to management shall conform with the requirements of the General
Corporation Law of Delaware, as in effect from time to time.
(c) The Company shall be authorized to withhold from any Award granted
or any payment due or transfer made under any Award or under the Plan or from
any compensation or other amount owing to a Participant the amount (in cash,
Shares, other securities, other Awards, or other property) of withholding
taxes due in respect of an Award, its exercise, or any payment or transfer
under such Award or under the Plan and to take such other action (including,
without limitation, providing for elective payment of such amounts in cash,
Shares, other securities, other Awards or other property by the Participant)
as may be necessary in the opinion of the Company to satisfy the required tax
withholding based on the minimum statutory withholding rates.
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(d) Nothing contained in the Plan shall prevent the Company from
adopting or continuing in effect other or additional compensation
arrangements, and such arrangements may be either generally applicable or
applicable only in specific cases.
(e) The grant of an Award shall not be construed as giving a
Participant the right to be retained in the employ or service of the Company
or any Affiliate. Further, the Company or the applicable Affiliate may at any
time dismiss a Participant from employment or terminate the services of an
independent contractor, free from any liability, or any claim under the Plan,
unless otherwise expressly provided in the Plan or in any Award Agreement or
in any other agreement binding the parties.
(f) If any provision of the Plan or any Award is or becomes or is
deemed to be invalid, illegal, or unenforceable in any jurisdiction, or as to
any person or Award, or would disqualify the Plan or any Award under any law
deemed applicable by the Committee, such provision shall be construed or
deemed amended to conform to applicable laws, or if it cannot be so construed
or deemed amended without, in the determination of the Committee, materially
altering the intent of the Plan or the Award, such provision shall be stricken
as to such jurisdiction, person or Award, and the remainder of the Plan and
any such Award shall remain in full force and effect.
(g) Neither the Plan nor any Award shall create or be construed to
create a trust or separate fund of any kind or a fiduciary relationship
between the Company and a Participant or any other person. To the extent that
any person acquires a right to receive payments from the Company pursuant to
an Award, such right shall be no greater than the right of any unsecured
general creditor of the Company.
(h) No fractional Shares shall be issued or delivered pursuant to the
Plan or any Award, and the Committee shall determine whether cash, other
securities or other property shall be paid or transferred in lieu of any
fractional Shares, or whether such fractional Shares or any rights thereto
shall be canceled, terminated or otherwise eliminated.
Section 13. Effective Date of Plan.
The Plan shall be effective as of the date of its approval by the
stockholders of the Company.
Section 14. Term of the Plan.
No Award shall be granted under the Plan after the tenth anniversary of
the effective date. However, unless otherwise expressly provided in the Plan
or in an applicable Award Agreement, any Award theretofore granted may extend
beyond such date, and the authority of the Committee to amend, alter, adjust,
suspend, discontinue, or terminate any such Award, or to waive any conditions
or rights under any such Award, and the authority of the Board to amend the
Plan, shall extend beyond such date.
A-12
EXHIBIT B
FINANCIAL STATEMENTS
[To come]
B-1
Preliminary Copy
PROXY PROXY
PROXY FOR ANNUAL MEETING TO BE HELD APRIL 20, 2000
This Proxy is solicited on behalf of the Board of Directors.
The undersigned hereby appoints JAMES R. ADAMS, THOMAS J. ENGIBOUS, CLAYTON K.
YEUTTER, or any one or more of them, the true and lawful attorneys of the
undersigned with power of substitution, to vote as proxies for the undersigned
at the annual meeting of stockholders of TEXAS INSTRUMENTS INCORPORATED to be
held in Dallas, Texas, on April 20, 2000, at 10:00 a.m. (Dallas time) and at
any or all adjournments thereof, according to the number of shares of common
stock which the undersigned would be entitled to vote if then personally
present, in the election of directors and upon other matters properly coming
before the meeting.
IMPORTANT-This Proxy must be signed and dated on the reverse side.
- ------------------------------------------------------------------------------
Dear Stockholder:
On the reverse side of this card are instructions on how to vote your
shares regarding the election of directors and the board proposals by
telephone or Internet. Please consider voting by telephone or Internet.
Your vote is recorded as though you had mailed in your proxy card.
TEXAS INSTRUMENTS
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [/]
_____________________________________________________________________________
The Board of Directors recommends a vote FOR proposals 1, 2 and 3.
FOR ALL
1. Election of Directors FOR WITHHELD Except Nominee(s)
ALL ALL Written Below
Nominees: 01-J.R. Adams, [ ] [ ] [ ]______________
02-D.L. Boren, 03-J.B. Busey IV,
04-D.A. Carp, 05-T.J. Engibous,
06-G.W. Fronterhouse, 07-D.R. Goode,
08-W.R. Sanders, 09-R.J. Simmons,
and 10-C.K. Yeutter.
FOR AGAINST ABSTAIN
2. Proposal regarding increasing the
company's authorized common stock. [ ] [ ] [ ]
3. Proposal to approve the Texas
Instruments 2000 Long-Term
Incentive Plan. [ ] [ ] [ ]
In their discretion the named proxies are
authorized to vote upon such other matters as may
properly come before the meeting.
If no contrary indication is made, this proxy
will be voted FOR the election of each board
nominee and FOR the two board proposals.
Dated __________________________, 2000
______________________________________________
Signature
______________________________________________
Signature
NOTE: Please sign exactly as your name appears on this document. For joint
accounts both owners should sign. When signing as executor, administrator,
attorney, trustee or guardian, etc., please give your full title.
IF YOU WISH TO VOTE BY TELEPHONE OR INTERNET,
PLEASE SEE THE INSTRUCTIONS BELOW.
- ------------------------------------------------------------------------------
CONTROL NUMBER
______________
| |
|______________|
NOW YOU CAN VOTE YOUR SHARES BY TELEPHONE OR INTERNET!
QUICK * EASY * IMMEDIATE * AVAILABLE 24 HOURS A DAY * 7 DAYS A WEEK
Texas Instruments Incorporated encourages you to take advantage of the
convenient ways to vote your shares. If voting by proxy, you may vote by mail,
or choose one of the two methods described below. Your telephone or Internet
vote authorizes the named proxies to vote your shares in the same manner as if
you marked, signed, and returned your proxy card. To vote by telephone or
Internet, read the accompanying proxy statement and then follow these easy
steps:
TO VOTE BY PHONE
Call toll free 1-888 _____________ any time on a touch tone telephone.
There is NO CHARGE to you for the call.
Enter the Control Number located above.
OPTION #1: To vote as the Board of Directors recommends on ALL proposals,
press 1.
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1 - THANK YOU FOR VOTING.
OPTION #2: If you choose to vote on each proposal separately, press 0. You
will hear these instructions:
Proposal 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL
nominees, press 9.
To WITHHOLD FOR AN INDIVIDUAL nominee, press 0 and listen to the
instructions.
Proposal 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
Proposal 3: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1 - THANK YOU FOR VOTING.
TO VOTE BY INTERNET
Go to the following website: www.harrisbank.com/wproxy
Enter the information requested on your computer screen, including your
Control Number located above.
Follow the simple instructions on the screen.
If you vote by telephone or Internet, DO NOT mail back the proxy card.
THANK YOU FOR VOTING!
Preliminary Copy
Proxy for Annual Meeting to be held April 20, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints James R. Adams, Thomas J. Engibous, Clayton
K. Yeutter, or any one or more of them, the true and lawful attorneys of the
undersigned with power of substitution, to vote as proxies for the
undersigned at the annual meeting of stockholders of Texas Instruments
Incorporated to be held in Dallas, Texas, on April 20, 2000, at 10:00 a.m.
(Dallas time) and at any or all adjournments thereof according to the number
of shares of common stock which the undersigned would be entitled to vote if
then personally present, in the election of directors and upon other matters
properly coming before the meeting.
- -----------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" proposals 1, 2 and 3.
1. Election of directors:
01-J. R. Adams o For o Withhold
02-D. L. Boren o For o Withhold
03-J. B. Busey IV o For o Withhold
04-D. A. Carp o For o Withhold
05-T. J. Engibous o For o Withhold
06-G. W. Fronterhouse o For o Withhold
07-D. R. Goode o For o Withhold
08-W. R. Sanders o For o Withhold
09-R. J. Simmons o For o Withhold
10-C. K. Yeutter o For o Withhold
2. Proposal regarding
increasing the
Company's authorized
common stock. o For o Against o Abstain
3. Proposal to approve
the Texas Instruments
2000 Long-Term
Incentive Plan. o For o Against o Abstain
- -----------------------------------------------------------------------------
In their discretion the named proxies are authorized to vote upon
such other matters as may properly come before the meeting.
- -----------------------------------------------------------------------------
If no contrary indication is made, this proxy will be voted "FOR" the
election of each Board nominee and "FOR" the Board proposals.
----------------
| Submit Votes |
----------------
Preliminary Copy
ANNUAL MEETING OF STOCKHOLDERS
April 20, 2000
March __, 2000
TO: Participants in the TI Universal Profit Sharing Plan (the "Universal
Plan") and the TI U.S. Employees Retirement and Profit Sharing Plan (the
"Retirement and Profit Sharing Plan")
The accompanying Notice of Annual Meeting of Stockholders and Proxy Statement
and Instructions to Trustee on Voting relate to shares of common stock of
Texas Instruments Incorporated held by the Trustee for your profit sharing
accounts.
As noted in the Proxy Statement, the TI board of directors has designated the
following nominees for election to the board for the ensuing year: JAMES R.
ADAMS, DAVID L. BOREN, JAMES B. BUSEY IV, DANIEL A. CARP, THOMAS J. ENGIBOUS,
GERALD W. FRONTERHOUSE, DAVID R. GOODE, RUTH J. SIMMONS, WAYNE R. SANDERS
and CLAYTON K. YEUTTER. Biographies of the nominees appear in the Proxy
Statement. In addition, the board proposals set forth in the Proxy Statement
are expected to be presented at the Annual Meeting. The board of directors of
TI recommends a vote FOR the election of directors and the board proposals.
Under the Universal Plan and the Retirement and Profit Sharing Plan, each
participant is a "named fiduciary" who has the right to direct the voting of
stock credited to his or her accounts. In addition, you and the other
participants are entitled as the "named fiduciaries" who control TI stock
voting for these plans to direct the voting of stock credited to the accounts
of participants who do not give voting instructions.
The Trustee is required to vote the shares held for each of your accounts in
accordance with your instructions. If you wish to instruct the Trustee on the
voting of shares held for your accounts you should complete and sign the
"Instructions to Trustee on Voting" form enclosed and return it in the
addressed, postage-free envelope or use the telephone voting procedures
specified on the voting instructions form by April 18, 2000.
If you are a participant in the Universal Plan and you do not instruct the
Trustee on voting the shares held in your accounts by April 18, 2000 in the
manner specified on the voting instructions form, the Trustee will vote such
shares in the same proportion as the shares for which the Trustee receives
voting instructions from other Universal Plan participants. Similarly, if you
are a participant in the Retirement and Profit Sharing Plan, and do not
instruct the Trustee on voting the shares held for your accounts by April 18,
2000 in the manner specified on the voting instructions form, the Trustee will
vote such shares in the same proportion as the shares for which the Trustee
receives voting instructions from other Retirement and Profit Sharing Plan
participants.
NOTE: If you own TI shares in your own name, a Proxy for those shares will
be sent to you in a separate package. Please sign and date the Proxy, if
applicable, and return it in the envelope provided, or follow the telephone
or Internet voting procedures accompanying the Proxy.
------------------------------------
Steve Leven
Director, World Wide Human Resources
Preliminary Copy
INSTRUCTIONS TO TRUSTEE ON VOTING
TI COMMON STOCK HELD UNDER THE
TI EMPLOYEES UNIVERSAL PROFIT SHARING PLAN
PLEASE VOTE BY SIGNING ON REVERSE SIDE AND RETURNING IN THE ENCLOSED
ENVELOPE OR BY FOLLOWING THE TELEPHONE VOTING PROCEDURES
These voting instructions are requested in conjunction
with a proxy solicitation by the Board of Directors
of Texas Instruments Incorporated.
[participant identifying information]
I hereby instruct Bankers Trust Company as Trustee of the Texas Instruments
Incorporated Defined Contribution Plan Master Trust ("Trust") to vote in
person or by proxy, at the annual meeting of stockholders of Texas Instruments
Incorporated ("TI") on April 20, 2000, or any adjournments thereof, the shares
of TI common stock ("TI stock") held in the TI Stock Fund under the Trust
which are attributable to my Universal Profit Sharing Account, CODA Account
and Tax Credit Employee Stock Ownership Account in the manner indicated on the
reverse side of this form with respect to each item identified thereon.
The Trustee will vote the shares represented by this voting instruction form
if, by April 18, 2000, (a) the form is properly signed and received, or
(b) the telephone voting procedures are followed. Shares for which no voting
instructions have been received will be voted in the same proportion as the
shares for which voting instructions are received.
- -----------------------------------------------------------------------------
On the reverse side of this card are procedures on how to vote your
shares regarding the election of directors and the board proposals
by telephone. Please consider voting by telephone. Your vote is
recorded as though you had mailed in your voting instruction form.
PLEASE MARK YOUR CHOICE IN OVAL IN THE FOLLOWING MANNER USING DARK INK
ONLY: [ / ]
________________________________________________________________________
The board of directors of TI recommends a vote FOR proposals 1, 2 and 3.
FOR ALL
1. Election of Directors - FOR WITHHELD Except Nominee(s)
ALL ALL Written Below
Nominees: 01-J.R. Adams, [ ] [ ] [ ]______________
02-D.L. Boren, 03-J.B. Busey IV,
04-D.A. Carp, 05-T.J. Engibous,
06-G.W. Fronterhouse, 07-D.R. Goode,
08-W.R. Sanders, 09-R.J. Simmons,
and 10-C.K. Yeutter.
FOR AGAINST ABSTAIN
2. Proposal regarding increasing the
company's authorized common stock. [ ] [ ] [ ]
3. Proposal to approve the Texas
Instruments 2000 Long-Term
Incentive Plan. [ ] [ ] [ ]
Dated __________________________, 2000
______________________________________________
Signature
NOTE: Please sign exactly as name appears hereon. When signing as executor,
administrator, attorney, trustee or guardian, etc., please give your full
title.
IF YOU WISH TO VOTE BY TELEPHONE, PLEASE SEE THE PROCEDURES BELOW.
- ----------------------------------------------------------------------------
CONTROL NUMBER
______________
| |
|______________|
NOW YOU CAN VOTE YOUR SHARES BY TELEPHONE!
QUICK * EASY * IMMEDIATE * AVAILABLE 24 HOURS A DAY * 7 DAYS A WEEK
Call toll free 1-888 _____________ any time on a touch tone telephone.
There is NO CHARGE to you for the call.
Enter the Control Number located above.
OPTION #1: To vote as the Board of Directors recommends on ALL proposals,
press 1.
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1 - THANK YOU FOR VOTING.
OPTION #2: If you choose to vote on each proposal separately, press 0. You
will hear these instructions:
Proposal 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL
nominees, press 9.
To WITHHOLD FOR AN INDIVIDUAL nominee, press 0 and listen to the
instructions.
Proposal 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
Proposal 3: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1 - THANK YOU FOR VOTING.
If you vote by telephone, DO NOT mail back the voting instruction form.
THANK YOU FOR VOTING!
Preliminary Copy
INSTRUCTIONS TO TRUSTEE ON VOTING
TI COMMON STOCK HELD UNDER THE
TI U.S. EMPLOYEES RETIREMENT AND PROFIT SHARING PLAN
PLEASE VOTE BY SIGNING ON REVERSE SIDE AND RETURNING IN THE ENCLOSED
ENVELOPE OR BY FOLLOWING THE TELEPHONE VOTING PROCEDURES
These voting instructions are requested in conjunction
with a proxy solicitation by the Board of Directors
of Texas Instruments Incorporated.
[participant identifying information]
I hereby instruct Bankers Trust Company as Trustee of the Texas Instruments
Incorporated Defined Contribution Plan Master Trust ("Trust") to vote in
person or by proxy, at the annual meeting of stockholders of Texas Instruments
Incorporated ("TI") on April 20, 2000, or any adjournments thereof, the shares
of TI common stock ("TI stock") held in the TI Stock Fund under the Trust
which are attributable to my Profit Sharing Account, 401(k) Account and Tax
Credit Employee Stock Ownership Account in the manner indicated on the reverse
side of this form with respect to each item identified thereon.
The Trustee will vote the shares represented by this voting instruction form
if, by April 18, 2000, (a) the form is properly signed and received, or
(b) the telephone voting procedures are followed. Shares for which no voting
instructions have been received will be voted in the same proportion as the
shares for which voting instructions are received.
- -----------------------------------------------------------------------------
On the reverse side of this card are procedures on how to vote your
shares regarding the election of directors and the board proposals
by telephone. Please consider voting by telephone. Your vote is
recorded as though you had mailed in your voting instruction form.
PLEASE MARK YOUR CHOICE IN OVAL IN THE FOLLOWING MANNER USING DARK INK
ONLY: [ / ]
________________________________________________________________________
The board of directors of TI recommends a vote FOR proposals 1, 2 and 3.
FOR ALL
1. Election of Directors - FOR WITHHELD Except Nominee(s)
ALL ALL Written Below
Nominees: 01-J.R. Adams, [ ] [ ] [ ]______________
02-D.L. Boren, 03-J.B. Busey IV,
04-D.A. Carp, 05-T.J. Engibous,
06-G.W. Fronterhouse, 07-D.R. Goode,
08-W.R. Sanders, 09-R.J. Simmons,
and 10-C.K. Yeutter.
FOR AGAINST ABSTAIN
2. Proposal regarding increasing the
company's authorized common stock. [ ] [ ] [ ]
3. Proposal to approve the Texas
Instruments 2000 Long-Term
Incentive Plan. [ ] [ ] [ ]
Dated __________________________, 2000
______________________________________________
Signature
NOTE: Please sign exactly as name appears hereon. When signing as executor,
administrator, attorney, trustee or guardian, etc., please give your full
title.
IF YOU WISH TO VOTE BY TELEPHONE, PLEASE SEE THE PROCEDURES BELOW.
- ------------------------------------------------------------------------------
CONTROL NUMBER
______________
| |
|______________|
NOW YOU CAN VOTE YOUR SHARES BY TELEPHONE!
QUICK * EASY * IMMEDIATE * AVAILABLE 24 HOURS A DAY * 7 DAYS A WEEK
Call toll free 1-888 _____________ any time on a touch tone telephone.
There is NO CHARGE to you for the call.
Enter the Control Number located above.
OPTION #1: To vote as the Board of Directors recommends on ALL proposals,
press 1.
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1 - THANK YOU FOR VOTING.
OPTION #2: If you choose to vote on each proposal separately, press 0. You
will hear these instructions:
Proposal 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL
nominees, press 9.
To WITHHOLD FOR AN INDIVIDUAL nominee, press 0 and listen to the
instructions.
Proposal 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
Proposal 3: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1 - THANK YOU FOR VOTING.
If you vote by telephone, DO NOT mail back the voting instruction form.
THANK YOU FOR VOTING!
